9911796707
TMI Blog2024 (2) TMI 889X X X X Extracts X X X X X X X X Extracts X X X X ..... and trading of molded plastic items, which includes import on lease basis from overseas group companies. It is seen that the petitioner imported molds during the concerned AY from Dart Industries Inc. USA ["Dart USA"] and the payments were made according to the rental agreement between the petitioner and Dart USA. As per the agreement, the mold lease rent was agreed to be paid by the petitioner on the basis of actual production days. 3. Contemporaneously, due to the change in method for charging rent on mold lease, certain deliberations were made between the petitioner and Dart USA to increase the said rent. However, before the negotiations could be finalized, the petitioner made a provision for higher rental in its books of accounts, as the estimated mold lease rent came out to be Rs. 7,19,96,529/-. Pursuant to the revised estimate, the petitioner made a deduction of Rs. 71,99,653/- as TDS on higher side and deposited the same. Later, the increase in mold lease rent did not happen and the rent was recognized to be Rs. 45,80,337/-, which resulted in excess deposit of TDS amounting to Rs. 67,41,620/-, as the actual TDS amounted to Rs. 4,58,035/- only in the given circumstances. 4. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . She submits that as per the CBDT circular dated 26.04.2016, the refund of excess TDS must be initiated along with the interest under Section 244A of the Act, from the date of the payment of such tax. 8. Per contra, learned counsel for the respondents vehemently opposes the submissions advanced by the learned counsel for the petitioner. He submits that under the provisions of the Act, the petitioner/deductor is not entitled to the refund of excess TDS deposited by it and only the payee will get the refund. 9. He further submits that the entire reliance of the petitioner on the CBDT circular dated 23.10.2017 is misplaced and devoid of any merit. He submits that the case of the petitioner does not fall in the category of cases stipulated in Clause 2 of the said circular. According to him, there is no material on record to suggest that the contract was either cancelled wholly or partially, or the existing agreement was replaced by a new understanding to make the petitioner eligible for claiming the refund of excess TDS. He submits that the petitioner has created such an enhanced provision merely on the basis of oral discussions and no intricate details are known to the respondents. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to Government account of the tax deducted at source under section 195, a) the contract is cancelled and no remittance is made to the non-resident; b) the remittance is duly made to the non-resident, but the contract is cancelled. In such cases, the remitted amount has been returned to the person responsible for deducting tax at source; c) the contract is cancelled after partial execution and no remittance is made to the non-resident for the non-executed part; d) the contract is cancelled after partial execution and remittance related to non-executed part is made to the non-resident. In such cases, the remitted amount has been returned to the person responsible for deducting the tax at source or no remittance is made but tax was deducted and deposited when the amount was credited to the account of the non-resident; e) there occurs exemption of the remitted amount from tax either by amendment in law or by notification under the provisions of Income-tax Act, 1961; f) an order is passed under section 154 or 248 or 264 of the Income-tax Act, 1961 reducing the tax deduction liability of a deductor under section 195; g) there occurs deduction of tax twice from the sam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Constitution and lays down legal principles, which we feel are equally applicable to the arguments raised. The Supreme Court in the said case has held that article 265 mandates that no tax can be levied or collected except by authority of law, which means that tax collected contrary to law has to be refunded; but the question is-when a tax is considered to have been levied and collected without authority of law." [Emphasis supplied] 17. With regards to the contention raised by learned counsel for the respondents regarding the refund of the disputed amount only to the payee, reliance can be placed on the decision of the Hon'ble Supreme Court in case of Union of India v. Tata Chemicals Ltd. [(2014) 6 SCC 335], wherein, while refunding the excess TDS along with the interest, the court held as under:- "37. A "tax refund" is a refund of taxes when the tax liability is less than the tax paid. As per the old section an assessee was entitled for payment of interest on the amount of taxes refunded pursuant to an order passed under the Act, including the order passed in an appeal. In the present fact scenario, the deductor/assessee had paid taxes pursuant to a special order pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed] 18. Reference can also be made to the decision of the Division Bench of the Bombay High Court in the case of Sunflag Iron and Steel Co. Ltd. v. CBDT [2016 SCC OnLine Bom 195], wherein in a similar set of circumstances, whereby, the resident/deductor has paid the tax in lieu of anticipated liability, the Court held as under:- "25. At the cost of repetition, we have no hesitation in holding that the refund made by the respondents would squarely fall within the ambit of section 240 of the said Act, inasmuch as their lordships in the case of Tata Chemicals (cited supra) have clearly held that the provisions of section 240 are wide enough and they include all sorts of proceedings. Undisputedly, the tax which was deducted and paid by the assessee was under the provisions of sections 195 and 201 of the said Act. Undisputedly, the advance tax which was paid was more than the liability to pay the tax. The tax was deducted and paid on an anticipation that the third instalment was to be paid to the non-resident German company. However, after the agreement with the non-resident German company, whereby it had waived the third instalment, the tax deducted at source on account of the paym ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
