TDS

Yes, the Co. is required to deduct TDS on the payment of Rs. 120000/- made to an individual

if interest is paid/ payable during the previous year exceeds Rs.10000, there is liability to deduct tax at sourse.

individual / HUF,  not required to deduct tax at source from the interest paid/ payable, provided such individual/ HUF was not liable to get account audited u/s 44AB in the immediate preceding Previous year.

so in this case, the payer is liable to deduct tax at source.

Now in the above case interest is paid to his son and his son has got income below the exemption limit but has not obtained the no tds certificate and also he did not opt for 15G. Whether Income tax officer has got power to waive this ?

Though the son's income is below taxable limit, it is the obligation of the assessee to deduct TDS. The son can later file a return for claiming refund of TDS.