(i) ABC Bank, accepted a Fixed Deposit (FD) for a sum of 20 lakhs in the name of Registrar General of the Court and issued a Fixed Deposit Receipt…

(i) The same issue came before the Delhi High Court in the case of UCO Bank v. Dy. CIT (2014) 369 ITR 335, wherein the High Court noted that the expression "payee” u/s 194A would mean the recipient of income whose account is maintained by the person paying interest. The Registrar General is neither recipient of the amount credited to his account nor to interest accruing thereon. Therefore, he cannot be considered as a 'payee' for the purposes of section 194A. In the absence of a payee, the machinery provisions for deduction of tax to his credit are ineffective. The credit by the bank in the name of the Registrar General would, thus, not attract the provisions of section 194A. Note - The CBDT has accepted the aforesaid judgment and accordingly, vide Circular No. 23/2015 dated 28.12.2015, clarified that interest on FDR made in the name of Registrar General of the Court or the depositor of the fund on the directions of the Court, will not be subject to TDS till the matter is decided by the Court. However, once the Court decides the ownership of the money lying in the fixed deposit, the provisions of section 194A will apply to the recipient of the income. (ii) Under section 206C (1) , a seller is required to collect tax at source (TCS) at the time of debit to the buyer's account or receipt of consideration, whichever is earlier, on sale of specified goods. (i) Sale of timber obtained under a forest lease Timber obtained under a forest lease is a specified good under section 206C (1) . Accordingly, M/s GreenEarth Resources Ltd. is liable to collect TCS at 2% on the sale value of timber at the time of debit or receipt, whichever is earlier. (ii) Sale of scrap Scrap is also a specified good under section 206C (1) . Hence, TCS is required to be collected by M/s GreenEarth Resources Ltd. @1% at the time of debit or receipt of sale consideration, whichever is earlier. (iii) Sale of coal for power generation Coal is a specified mineral under section 206C (1) , liable to TCS @ 1%. However, since the buyer furnished a declaration stating that coal would be used for generation of power and not for trading purposes, no TCS is required to be collected in view of section 206C(1A). (iv) Licence to operate toll plaza to a public sector company Section 206C(1C) applies to collection of TCS at 2% on grant of licence for operating a toll plaza, except where the licensee is a public sector company. Since the licence is granted to M/s National Highways Authority Ltd., a public sector company, TCS is not applicable in this case.