NO INTEREST ON UNEVEN DEDUCTION OF TDS

The Bangalore Income Tax Tribunal has held that where an assessee has deducted the tax at source (TDS) on salary every month and adjusted the shortfall of tax in the last month of that year in view of change in structure of salary payment, it cannot be considered as short-fall in deduction of TDS on a month-to-month basis. The tribunal held that Section 192(3) of the IT Act provides liberty to the employer at the time of making of deduction, to increase or reduce the amount to be deducted for the purpose of adjusting any excess or deficiency in the deduction in the financial year. The assessee having exercised this liberty has adjusted the shortfall in the last month of the year and so there was no case of shortfall. Hence, it was held that interest for short deduction of TDS was not leviable.