2025 (6) TMI 1310 - AT - Income Tax

Revenue's challenge fails as tribunal correctly distinguishes sections 234B and 234C for TDS interest calculations

DCIT, International Tax Circle 4 (2) (2) Versus Standard Chartered Bank (Singapore) Ltd., Delhi

ITAT Mumbai dismissed Revenue's miscellaneous application challenging tribunal's order for A.Y. 2021-22. Revenue contested tribunal's reliance on Bombay ... Rectification u/s 154 - interest u/s 234C - assessee claims that it has discharged tax liability on said interest income by way of advance tax - sum and substance of the grievance is that the Tribunal has followed the order of the Hon’ble Bombay High Court, whereas the decision of the Hon’ble Supreme Court, followed by the CIT(A), has been ignored. HELD THAT:- At the very outset, we have to draw attention to the decision of the Hon’ble Supreme Court in [1992 (9) TMI 1 - SUPREME COURT wherein the Hon’ble Supreme Court has laid down the ratio that a judgment should be read as a whole and has to be considered in the context in which it is delivered. The decision of the Hon’ble Supreme Court referred by the revenue is in the context of charging of interest u/s 234B of the Act, whereas the decision of the Hon’ble Bombay High Court, followed by the coordinate bench, deals with the charging of interest u/s 234C of the Act. Therefore, we do not find any merit in this MA of the revenue, and the same is accordingly dismissed. MA of the revenue is dismissed. The Appellate Tribunal (ITAT Mumbai) dismissed the Revenue's miscellaneous application challenging the Tribunal's order in ITA No. 2505/Mum/2025 for A.Y. 2021-22. The Revenue contested the Tribunal's reliance on the Bombay High Court decision in Director of Income Tax (International Taxation) Vs Nge Network Asia LLC, which allowed the assessee's appeal against interest levied under section 234C of the Income Tax Act for alleged short deduction of TDS on interest income.The Revenue argued that the Tribunal ignored the Supreme Court's ruling in Director of International Tax, New Delhi Vs Mitsubishi Corporation ([2021] 130 taxmann.com 276 (SC)), which was upheld by the CIT(A) and concerned interest under section 234B, not 234C. The Tribunal noted that the Supreme Court's decision must be read in context and distinguished the section 234B issue from the section 234C issue before it.Consequently, the Tribunal held that the Revenue's reliance on the Supreme Court decision was misplaced as it dealt with a different provision. The Tribunal affirmed the coordinate bench's order following the Bombay High Court precedent and dismissed the Revenue's application. The key holding states that 'a judgment should be read as a whole and has to be considered in the context in which it is delivered,' underscoring the distinction between sections 234B and 234C.