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Levy of interest under section 234B of the Income-tax Act. Analysis: The appeal was filed by the revenue against the order of CIT(A) for the assessment year 2005-06, specifically disputing the levy of interest under section 234B of the Income-tax Act. The assessee had initially declared a total income, but the AO made adjustments resulting in a higher total income assessment. The AO also imposed interest under section 234B due to a shortfall in advance tax payment. However, the assessee contended that they were not liable for interest under section 234B, citing that the entire income of the non-resident was tax deductible at source as per section 195 of the Income-tax Act. The CIT(A) accepted the assessee's explanation and deleted the interest levy, prompting the revenue to appeal. The Tribunal, after hearing both parties, referred to a judgment of the Hon'ble High Court of Mumbai in a similar case, which held that failure on the part of the payer to deduct tax at source could not be a basis for levying interest under section 234B when the entire tax was deductible at source. The Tribunal noted that the Learned DR did not contest that the entire income of the assessee was indeed tax deductible at source. Consequently, in line with the High Court's decision, the Tribunal found no fault in the CIT(A)'s order deleting the interest charged under section 234B. Therefore, the Tribunal upheld the CIT(A)'s decision, resulting in the dismissal of the revenue's appeal. In conclusion, the Tribunal dismissed the revenue's appeal, affirming the CIT(A)'s order to delete the interest charged under section 234B based on the specific circumstances of the case and the legal interpretation provided by the Hon'ble High Court of Mumbai.
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