RAJ & COMPANY Vs. UNION OF INDIA

JUDGEMENT

(1.) THE petitioner had transactions with the ITC (Indian Tobacco Company). In course of transactions the petitioner was liable to pay interest component to the ITC. In view of the provisions contained in s. 194A of the IT Act, the petitioner has effected TDS from the interest portion payable, and remitted to the Revenue on various dates. It is submitted that the ITC when filed its returns did not seek deduction of the TDS effected by the petitioner nor claim refund of the same. TDS amounts remitted by the petitioner to the Department were admitted to be an excess payment of tax liability of the ITC. The ITC is demanding TDS certificates from the petitioner. Petitioner is in turn requesting the Department to refund the TDS amounts remitted to the account of the ITC, since the ITC had already paid the tax liability in making the TDS amounts remitted by the petitioner.

(2.) THE Department has refunded TDS amounts to the petitioner; however, the petitioner has claimed interest on TDS amounts from the date of remittance till refund. It is the contention of the Department that the petitioner is not an assessee and that the liability to pay interest on the refund arises only in respect of an assessee, and in these transactions the petitioner is not an assessee and hence is not entitled to interest. The counsel for the Revenue has relied on a decision rendered by the Madhya Pradesh High Court in Universal Cables Ltd. vs. CIT : (2009) 26 DTR (MP) 98.