2010 (6) TMI 840

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..... assessee had to remit US$ 1,50,000 to the Japanese company. It remitted the aforesaid amount after deducting the tax of ₹ 7,90,824/- from the remittance under section 195 of the Income Tax Act, 1961. There is no dispute that the aforesaid tax was paid to the Government of India. 3. On 20.04.2007 the assessee filed an appeal before the CIT(A) under section 248 of the Income Tax Act, for declaration that it was not liable to deduct tax from the remittance. The CIT(A), relying on an order of the Mumbai Bench of the Tribunal in the case of Mahindra Mahindra Ltd. vs. Additional Director of Income Tax (2007) 106 ITD 521 (Mum), held that the assessee did not approach the Assessing Officer for a certificate under section 195(2) for remit .....

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..... other sum (except salaries) chargeable under the provisions of the Income Tax Act shall, at the time of credit of such income to the account of the payee or at the time of actual payment thereof in cash, cheque or any other mode, whichever is earlier, deduct income-tax thereon at the rates in force. This sub-section is declaratory of the liability of the person who pays to a non-resident any sum chargeable to tax under the Income Tax Act. The liability of the payer does not depend upon the passing of an order by the Assessing Officer or by any Income Tax authority. The subsection itself fastens the liability upon the payer to deduct the tax. Consistent with this position, section 248 as it existed before 01.06.2007 says that any person who .....

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..... Tribunal in the case of Mahindra Mahindra Ltd. (supra) does not cover the present controversy. There the question was whether an appeal to the CIT(A) was maintainable against the certificate issued by a Chartered Accountant under CBDT Circular No. 759. In fact the order itself recognizes that the CIT(A) should have given the liberty to the assessee to approach the Assessing Officer for seeking determination of withholding tax liability. This implies that the assessee in that case had not deducted the tax under section 195(1). The controversy was whether it was open to the CIT(A) to entertain an appeal under section 248 against a Chartered Accountant s certificate holding that tax at a particular rate is required to be deducted by an asses .....

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