2015 (10) TMI 1466 - AT - Income Tax

Credit for foreign tax paid in Mauritius - whether should not be excluded while computing interest under section 234C? - whether the payment made by the assessee on 10.09.2004 in Mauritius can be considered as advance tax as was done by the assessee or can it be a self-assessment tax as was considered by the Assessing Officer? - Held that - The Commissioner of Income Tax (Appeals) has considered the submissions of the assessee and the averments of the Assessing Officer elaborately and held that amount paid by the assessee has to be considered as selfassessment tax for the purpose of computing interest under section 234C of the Act and not as advance tax and further held that the issue cannot be considered as debatable. The payment of taxes in Mauritius (Rs. 1,60,31,359/-) on 10.9.2004 i.e. after the end of the financial year 2003-04 cannot be considered as advance tax. It makes no difference, under what circumstances the taxes were paid. Since the taxes were paid after 31st March of the relevant financial year (F.Y. 2003-04) the said payment can only constitute the self assessment taxes. When the statute clearly provides that all the payments made after the 31st March of the financial year are self assessment taxes, and therefore the issue cannot be considered as debatable. Mere argument for the sake of argument cannot make the clear and unambiguous provisions into debatable ones. AO rightly treated the tax payments made after the end of the financial year (paid on 10.9.2004) as self assessment taxes and re determined the levy of interest u/s 234C of the Act. The action of the AO by rectifying the assessment u/s 154 of the Act is very well justified and therefore the appellant s contentions are hereby rejected. - Decided against assessee.

Summary

Issues:
1. Whether credit for foreign tax paid in Mauritius should be excluded while computing interest under section 234C of the Act.

Analysis:
The appellant filed an appeal against the order of the Commissioner of Income Tax (Appeals) related to the assessment year 2004-05. The main issue was the treatment of credit for foreign tax paid in Mauritius while calculating interest under section 234C of the Income Tax Act. The appellant argued that the tax paid in Mauritius should be considered as advance tax, not self-assessment tax, for the purpose of interest calculation. The Assessing Officer treated the tax payment as self-assessment tax, leading to the levy of interest under section 234C. The Commissioner of Income Tax (Appeals) upheld the Assessing Officer's decision, stating that the tax liabilities in India are determined by the Indian Income Tax Act and relevant Double Taxation Avoidance Agreement (DTAA) with Mauritius. The Commissioner emphasized that payments made after the end of the financial year cannot be considered as advance tax, as per the provisions of section 234C.

The appellant contended that the Assessing Officer's rectification under section 154 of the Act was debatable and should not have been carried out in that order. However, the Departmental Representative supported the lower authorities' decisions. The Tribunal analyzed the submissions and orders of the lower authorities and concluded that the payment made in Mauritius on 10.09.2004 should be treated as self-assessment tax, not advance tax, for the purpose of interest calculation under section 234C. The Tribunal agreed with the Commissioner of Income Tax (Appeals) that the tax payments in Mauritius cannot be considered as advance tax as they were made after the end of the financial year. The Tribunal found no valid reason to interfere with the Commissioner's findings and upheld the order, ultimately dismissing the appeal of the assessee.

In summary, the judgment focused on the treatment of tax paid in Mauritius for the purpose of interest calculation under section 234C of the Income Tax Act. The Tribunal agreed with the lower authorities that the payment made in Mauritius should be considered as self-assessment tax, not advance tax, as it was made after the financial year. The Tribunal rejected the appellant's arguments and upheld the Commissioner of Income Tax (Appeals) order, ultimately dismissing the appeal.