GANESH CHHABABHAI VAALABHAI PATEL FAMILY TRUST Vs. INCOME TAX OFFICER
INCOME TAX APPELLATE TRIBUNAL
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B.L. Chhibber, Accountant Member -
(1.) THESE appeals by the assessee are directed against the consolidated order of CIT(A) dated 21-9-1993 relating to assessment years 1983-84 to 1990-91 and his order relating to assessment year 1991-92 dated 22-10-1993 where he has followed his earlier order dated 21-9-1993.
(2.) The common grievance projected by the assessee is that the learned CIT(A) has failed to appreciate that the provisions of Section 194A are not applicable to the case of the assessee.
The assessee is a Trust created by the Settlor Shri Rambhai S. Patel by an Indenture dated 23-4-1979. There are 25 beneficiaries as mentioned in Schedule I and 23 beneficiaries as mentioned in Schedule II attached to the Trust Deed. All the beneficiaries are either Individuals or HUFs. 50% of the income of the assessee-trust is to be distributed amongst the beneficiaries in Schedule I as per share specified therein and the remaining 50% of the income is to be divided and accumulated for and on behalf of the beneficiaries in Schedule II for a period of 19 years as per share specified against each of the beneficiaries. Thus it is evident that the assessee is a specific trust having definite share and the assessee is to be assessed as provided under Section 161 of the Act. As a matter of fact, the assessee has been so assessed by the ITO having jurisdiction over the assessee for the years under appeal.
(3.) THE assessee paid income by way of interest to certain parties but did not deduct income-tax thereon at the time of payment. Section 194A of the Act lays down that any person, not being an individual or a Hindu Undivided Family, who is responsible for paying any income by way of interest shall, at the time of credit of such income to the account of payee or at the time of payment thereof, whichever is earlier, deduct the income tax thereon at the rates in force. If the assessee trust came in the category of "individual" or "HUF" within the meaning of those expressions in Section 194A, the assessee trust would not be under any legal obligation to deduct the income-tax under said provision. On the other hand, if the assessee trust did not come in the category of "individual" or "HUF" within the meaning of those expressions in the said section, the assessee trust would be under legal obligation to deduct the income-tax under the said provision and on failure to do so, the Assessing Officer would be entitled to direct deposit of amount along with penal interest under Section 201(1A) of the Act. THE Assessing Officer held that the assessee trust did not come in the category of "individual" or "HUF" within the meaning of the said section and as such, on its failure to deduct income-tax at the time of payment of income by way of interest, it had made itself liable to pay interest under Section 201(1A) of the Act. THE Assessing Officer accordingly levied penal interest (as per details given in the order of CIT(A) and directed the assessee to deposit T.D.S. amount along with penal interest.;
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