Decided on October 17,2008



B.P. Jain, A.M. - (1.) THIS is an appeal filed by the assessee against the order of the learned CIT(A), dt. 14th Aug., 2008 for the asst. yr. 2005-06.
(2.) During the course of hearing, the learned Authorised Representative of the assessee has not pressed the ground Nos. 1, 4 and 5. Hence, the same are dismissed being not pressed. The ground No. 6 of the assessee is general in nature which needs no adjudication by us. Ground No. 2 : The learned CIT(A) has erred in confirming the action of the AO in treating the assessee company as assessee in default under Section 201(1) for the sum of Rs. 10,45,500 being alleged TDS on deemed dividend. Ground No. 3 : The learned CIT(A) has erred in confirming the levy of interest of Rs. 3,86,835 under Section 201(1A)/194 of the IT Act 1961.
(3.) WE have heard the parties. The brief facts of the case are that a survey under Section 133A of the Act was conducted on 21st Feb., 2008, wherein it was noticed that the assessee had made payments on which TDS under Section 194 of the Act was not deduced and also the TDS deducted was not deposited in Government account within the time allowed as per provisions of Section 200(3) of the Act. The assessee deductor was asked to show cause reason for non-deduction of TDS/late deposit of TDS in Government account. The assessee was also asked to show cause as to why TDS amount should not be recovered from it under Section 201(1) and interest under Section 201(1A) should not be charged. In response, the assessee deductor filed its reply and details. The reply filed by the assessee was considered by the AO. However, the reply of the assessee was not found acceptable by the AO and accordingly as per detailed discussion contained in pp. 1 to 5 of the order dt. 11th April, 2008. passed under Sections 201(1) and 201(1A) of the IT Act, the AO determined the tax liability of the assessee amounting to Rs. 10,45,500 under Section 201(1) for non-deduction of TDS under Section 194 of the Act and also determined the interest payable by the assessee at Rs. 3,86,835 under Section 201(1A)/194 and at Rs. 9,097 under Section 201(1A)/194C of the Act.;

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