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TMI Blog2018 (1) TMI 812X X X X Extracts X X X X X X X X Extracts X X X X ..... the respondent, namely, the Chief Commissioner of Income Tax-I, rejecting the petitioner's application for waiver of interest levied under Sections 234B and 234C of the Income Tax Act, 1961 (hereinafter referred to as the Act ). 3.The facts of the case being the petitioner is a non-resident Company, filed its return of income for the assessment year 2000-2001 within the time limit prescribed under Section 139(1) of the Act. The return was processed under Section 143(1) of the Act and interest of ₹ 23,53,882/- was charged under Section 234B and ₹ 12,17,545/- was charged under Section 234C of the Act. The petitioner filed an application before the respondent seeking waiver of the interest. The sum and substance of the contention raised by the assessee before the respondent was that the assessee could not pay any tax unless the case was decided by the Advance Ruling Authority (AAR) and assuming that even before the decision of AAR, the petitioner is required to pay taxes on its income, the petitioner's book results were a loss and hence, there was no requirement to pay advance tax and consequently, there would be no liability or interest under Section 234B or 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the Income Tax Authorities at Mumbai. One of the ground which was canvassed before the Tribunal is with regard to levy of interest under Sections 234B and 234C of the Act and the decision was rendered in favour of the Group Company, sister concern which was affirmed by the decision of Division Bench of High Court of Bombay in ITA.No.3172 of 2010 dated 23.06.2011 and the appeal filed against the said order before the Hon'ble Supreme Court in SLP No.7409 of 2010 is dismissed. 6.The learned Senior Standing Counsel for the revenue vehemently contended that the Court should examine the conduct of the assessee which has been rightly noted by the respondent while rejecting the application for waiver. Further, at the time, when the petitioner insisted upon the Chennai Port Trust to deduct 7% as tax at source, they have conveyed their inability to do so by restricting the recovery only to 2.2% and at that point of time, the ruling in the case of NV Jan De Nul (236 ITR 489 AAR) was holding the field and therefore, the petitioner assessee ought to have paid advance tax. Furthermore, it was submitted that merely because the petitioner assessee had moved the Advance Ruling Authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ginal order, the present assessee sought for recalling of the order that there was a misrepresentation. The Advance Ruling Authority passed an order on 29.04.2009 and rejected the assessee's petition that the order passed by the Advance Ruling Authority could not be said to have been obtained by fraud or misrepresentation. It observed that the document brought on record by the Port Trust showed its stand that the joint venture consisting of HCC and VOA was an AOP, resident in India. It also pointed out that the foreign company filed a return of income for 1998-99 on 25.11.1998 as a non-resident company and for 1999-2000, on 29.12.2000. It also filed a return showing the status of joint venture as an AOP on 02.11.1998 before the Income Tax Officer, Ward-34, Mumbai, along with a return for claim of refund. The Authorised Representative for the foreign company also clarified that such application had to be filed to avoid the practical difficulty involved in the foreign company obtaining refund as a separate entity. The Advance Ruling Authority further pointed out that the return filed in the name of the joint venture as Association of Persons was invalid, it not being in the Saral ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 194C, treating the joint venture as Association of Persons. In the background of these circumstances, we hold that the reliance placed on the decision of the Apex Court in CIT v. British Airways [2010] 190 Taxman 304 in almost similar circumstances, comes to the aid of the assessee herein. 12. The Supreme Court observed that till the decision of the Apex Court in CIT v. Eli Lilly Co. (India) (P.) Ltd. [2009] 312 ITR 225 / 178 Taxman 505, there was a debate on the question as to whether TDS was deductible on foreign salary payment as a component of total salary paid to an expatriate working in India. In the face of such debatable issue, the assessee could not be declared as an assessee in default under Section 192 read with Section 201 of the Income Tax Act. Further, the Apex Court pointed out that since the foreign company-assessees therein had paid the differntial tax and the interest and had further undertook not to claim refund for the amount paid, the Supreme Court held that the orders passed under Section 201(1) and 201(1A) could not be upheld. Applying the decision of the Apex Court to the case on hand, which we had already narrated in the preceding parag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilar dredging contracts and registered with the Income Tax authorities and assessed on the file of the Income Tax Authority at Mumbai, an appeal was preferred by the Revenue before the ITAT, Mumbai against the order passed by the Commissioner of Income Tax (A) for assessment year 1999-2000. One of the grounds raised in the appeal was with regard to the levy of interest under Sections 234B and 234C of the Act. The Income Tax Appellate Tribunal took note of the decision in the case of DIT (International Taxation) vs. NGC Network Asia reported in (2009) 18 DTR (Bom) 203 and dismissed the revenue's appeal. The revenue filed an appeal before the High Court of Bombay in ITA No.3172 of 2010 which was dismissed and this order was affirmed by the Hon'ble Supreme Court. 9.In the case of DIT (International Taxation) NGC Network Asia (supra), the Hon'ble Division Bench of High Court of Mumbai agreed with the view taken by the Uttaranchal HighCourt in the case of CIT Anr. vs. Sedco Forex International Drilling Co. Ltd. Ots reported in (2003) 264 ITR 230 (U) and held that when a duty is cast on the payer to pay the tax at source, on failure, no interest can be imposed on the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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