ORDER 13.12.2004 — Heard Mr. B.K.Mohanty, learned counsel for petitioner and Mr. A.K.Mohapatra, learned Standing Counsel for the Income Tax Department. The petitioner, Larsen & Toubro Limited has its registered office at Mumbai and Regional Office at Calcutta. The petitioner also has a project office at Balasore where the petitioner has undertaken some project works through Sub-Contractors. Under Section 192 of the Income Tax Act, the Officers of the petition¬er’s Company are required to deduct income tax from the salaries payable to its employees and deposit the same in the Income Tax Department. Under Section 194-C of the said Act, the Officers of the petitioner’s Company are required to deduct income tax payable to Sub-Contractors and deposit the same with the Income Tax Department. Since in respect of the employees and the Sub-Contractors engaged in the project undertaken by the petitioner at Balasore, deductions as provided in Section 192 and Section 194-C of the Income Tax Act, 1964 were not made and deposited within the Income Tax Office at Balasore, the Income Tax Officer (T.D.S.)-cum-Tax Recovery Officer, Balasore, passed an order under Section 201 of the said Act on 25.2.2004 which is extracted herein below : “ORDER UNDER SECTION 201 OF THE I.T. ACT, 1961. In this case TDS verification was made on 23.12.2003 and you are requested to produce the evidence in support of deposit of the tax deducted at source under Sections 194C/192 of the I.T.Act, 1961 from payments made to contractors/sub-contrac¬tors and employees for the financial year 2003-04 till date, to the credit of Central Government. Section 201 enacts payment of simple interest, for you as company bound to deduct tax at source and defaulting to so deduct tax or, after having deducted, defaulting in making pay¬ments thereof to the credit of the Central Government as pre¬scribed in Section 200 read with Rule 30 of the I.T.Rules, 1962. During the course of verification, it is ascertained that you are making all such payments here at Balasore and accordingly, you are supposed to deposit such amount of tax in the local prescribed bank of Balasore. As you have failed to deposit the tax deducted at source amounting to Rs. 22,74,470/-, on payment of Rs. 19,94,83,095/- during this current financial year 2003-04 till November, 2003, you were asked to explain as to why interest under Section 201 (1A) of the I.T.Act, 1961 should not be charged on you. As you have failed to deposit the tax deducted at source amounting to Rs. 22,74,470/-, on payment of Rs. 19,94,83,095/- during this current financial year 2003-04 till November, 2003, you were asked to explain as to why interest under Section 201 (1A) of the I.T.Act, 1961 should not be charged on you. As no convincing reply is received so far, you are treat¬ed as assessee in default within the meaning of Section 201 of I.T.Act, 1961. Hence you are hereby directed to deposit the amount of tax along with interest @ 15% per annum for the period of default as under. TDS made during this year till November, 2003 as furnished ... Rs. 22,74,170/- Interest @ 15% P.A. for the period default works out to ... Rs. 3,41,170/- Total amount comes to ... Rs. 26,15,640/- In case of failure in depositing the said amount of tax and interest within 27 February, 2004, you will be liable for penalty proceeding as per the I.T.Act, 1961. Issue demand notice, challan and a copy of this order. Sd/- K. Naik, Income Tax Officer (T.D.S.)-cum- Tax Recovery Officer, Balasore Aggrieved by the aforesaid order dated 25.2.2004 passed by the Income Tax Officer (T.D.S.)-cum-Tax Recovery Officer, Bala¬sore, the petitioner has filed this writ petition under Article 226 of the Constitution with a prayer to quash the same. The petitioner’s case in the writ petition is that such deductions under Sections 192 and 194-C of the Income Tax Act, 1961 were being made by the Officers of the petitioner’s Company in respect of salary payable to employees and amounts payable to sub-contractors engaged in the project at Balasore at the Regional Office of the petitioner’s Company at Kolkata and the amounts so deducted have been deposited with the Assistant Commissioner of Income Tax, Circle-58 (T.D.S.), Kolkata. In view of the said contention raised by the petitioner in this writ petition, this Court passed an order on 15.3.2004 calling upon Mr. A.K.Mohapatra, learned Standing Counsel, Income Tax Department, to obtain instruction as to whether any deduc¬tions under Sections 192 and 194-C of the Income Tax Act have been made by the Regional Office of the petitioner’s Company at Kolkata and the amounts so deducted have been deposited with the Income Tax Department at Kolkata. Thereafter, on 28.6.2004, this Court again called upon Mr. Thereafter, on 28.6.2004, this Court again called upon Mr. A.K.Mohapatra, to appraise this Court with an affidavit with all correspondences with regard to such deduction and deposit under Sections 192 and 194-C of the Income Tax Act at Kolkata. Pursuant to the aforesaid order passed by this Court, an affidavit has been filed before us today by one Sri C.Deepak Singh, holding the charge of Assistant Commissioner of Income Tax, Circle-58 (TDS), Kolkata, which is to the following effect. “AFFIDAVIT I, Sri C.Deepak Singh, s/o. Sri C.Amuba Singh holding the charge of Assistant Commissioner of Income Tax, Circle-58 (TDS) Kolkata, Assessing Officer of Larsen & Toubro Ltd. having Kolkata Regional Office at Park Plaza, 71, Part Street, Kolkata-16, solemnly affirm and declare 1. That Larsen & Toubro Ltd. has deducted and deposited tax at source at Kolkata on salary and sub-contractor payments made at Balasore, Orissa during the period 01-04-2003 to 30-11-2003, the TDS amount being as under : Section under I.T.Act Amounts deducted and deposited 192 Rs. 4,52,316/- 194-C Rs. 24,74,470/- 2. That Larsen & Toubro Ltd. is having TAN at CALL00263E ob¬tained from Kolkata for depositing TDS. 3. That in view of the circular No. 719 dated 22.8.1995 and Circular No. 744 dated 06.05.1996 issued by CBDT, New Delhi, the above deposits of TDS made at Kolkata are in order. The above statement is true to the best of my knowledge and belief. Sd/- (C. DEEPAK SINGH) ACIT CIRCLE-58 TDS KOLKATA” It is clear from the aforesaid affidavit that deductions both under Sections 192 and 194-C in respect of the salary and sub-contractors payment made at Balasore, Orissa within the period from 1.4.2003 to 30.11.2003 have been made by Officers of the petitioner’s Company in the Kolkata Regional Office and have been deposited with the Assistant Commissioner of Income Tax, Circle-58 (TDS), Kolkata. It is also clear from the aforesaid affidavit that the deductions and the deposits are in accordance with the Circular No. 719 dated 22.8.1995 and Circular No. 744 dated 6.5.1996 issued by the CBDT, New Delhi. Obviously, deductions under Sections 192 and 194-C in respect of salary and sub-contractors payments can be made and deposited with one Officer and not with two Officers. Obviously, deductions under Sections 192 and 194-C in respect of salary and sub-contractors payments can be made and deposited with one Officer and not with two Officers. It appears from the aforesaid affidavit filed by the Officer holding charge of As¬sistant Commissioner of Income Tax, Circle-58 (TDS), Kolkata that as per the two circulars of the Central Board of Direct Taxes, New Delhi, the deductions and deposits under Sections 192 and 194-C with the aforesaid Officers at Kolkata out of salary and sub-contractors payments made at Balasore, Orissa, are in order. Hence, such deductions and deposits under Sections 192 and 194-C from salary and sub-contractors, deductions made at Balasore, Orissa, were not required to be made at Balasore and deposited within the Income Tax Office, TDS, at Balasore. For this reason, the impugned order dated 25.2.2004 passed by the Income Tax Officer (TDS)-cum-Tax Recovery Officer, Balasore, is quashed and the amount realised by the Income Tax Officer (TDS)-cum-Tax Recovery Officer, Balasore pursuant to the said order dated 25.2.2004 will be refunded to the petitioner together with the interest as payable under the Act by 31.3.2005. The writ petition is accordingly disposed of. Urgent certified copy of this order be granted as per rules. Petition disposed of.