TaxTMI 
TaxTMI 
2011 (1) TMI 64
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....sting sports events taking place outside India on Ten Sports channel. For some events, the rights acquired were for live telecasting while for some events the same were for delayed telecasting in India. The assessee contended that both, the events and parties with whom assessee has entered into agreements for telecasting sports events were outside India. The assessee considered the residential status in India of the parties with whom the assessee entered into agreement under the Act as "non-resident". 3.3 The AO held that the payments made by the assessee to the non-residents were in the nature of "Royalty" and attracts the provisions of Explanation 2 to section 9(1)(vi) of the Act, which were deemed to arise in India and hence taxable in India. Therefore, the AO was of the view that the assessee failed to deduct the tax u/s 195 and was thus deemed to be a assessee in default u/s 201(1). The AO initiated the proceedings u/s 201 against the assessee for non-deduction of tax at source from the payments made to the non-residents and passed an order u/s 201(1)/201(1A) of the Act dated 17.3.2004. Accordingly, the AO issued notice of demand on the assessee u/s 156 of the Act for Rs. 3....
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....ent providers in respect of whom TRC's have not been submitted ' For the year ended 31.3.2003 213,028 7,404 220,433 Refund due 33,584,669 3.8 The AO has issued refund order dated 22.8.2005 with income tax computation form. However the DDIT did not grant interest u/s 244A while computing the amount of final refund to be issued to the assessee and granted only the refund of Rs. 33,584,669 after giving effect to the order of the CIT(A). 3.9 Aggrieved by the order of the AO for non-granting the interest u/s 244A, the assessee filed an appeal before the CIT(A), who allowed the claim of the assessee by following the decision of the Hon. Supreme Court in the case of ITO v. Delhi Development Authority reported in 252 ITR 772 and the order of this Tribunal in the case of TATA Chemicals Ltd. v. DCIT reported in 16 SOT 481 (Mum.) and held that the assessee is entitled for interest u/s 244A in respect of the excess payment of tax in response to the order passed under section 201 r.w.ss. 195, 201(1A) and 250 of the Act. 3.10 Before us, the learned DR has submitted that the assessee is not the payer of the tax and therefore, the provisions of section 244A are not a....
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....t in excess of demand issued under section 156. Moreover, there was no assessment on the assessee resulting the demand u/s 156 and payment of tax. The learned DR has forcefully contended that the legislature their wisdom has provided under the explanation that the interest is payable on the refund of the amount which is excess of the demand u/s 156 and only in respect of the assessment for the assessment commencing on 1.4.1989 and subsequent years. 3.11 On the other hand, the learned AR has submitted that the Explanation to clause (b) to sub-section (1) of section 244A is not for determining the amount on which the interest is payable but clarifies the date from which the interest is payable. Further, the term used in the explanation as excess of such demand refers to the amount which becomes excess in pursuance to the subsequent orders. The learned AR has referred the clause (b) as well as explanation and submitted that clause (b) and explanation is only regarding the period for which the interest is payable on refund. 3.12 The learned AR has tried to explain that if the assessee paid the demand in instalments then only that part of the payment of the tax which is found as e....
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....erned the Board has clarified the refund to be made to the person responsible for deducting the tax at source in the cases where (a) after the deposit of tax deducted at source under section 195, the contract is cancelled and no remittance is required to be made to the foreign collaborator, (b) the remittance is duly made to the foreign collaborator, but the contract is cancelled and the foreign collaborator returns the remitted amount to the person responsible for deduction tax at sources, (c) the tax deducted at source is found to be in excess of tax deductible for any other reason; and (d) in the cases where the tax is deducted at sources u/s 195 and paid in one assessment year and remittance to the foreign collaborator is made and/or refunded to the Indian company following cancellation of the contract in another assessment year. Thus, in the cases where the income does not accrued to the non-resident the amount deducted as tax under section 195 and paid to the credit of the government belongs to the deductor. Under these circumstances, the Board has found that since the refund was to be given only on a claim being made by the non-residence whereas the income were not income as....
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....ion in our view has no force. It would not be necessary that in all cases, before payment is made, there must always be an actual order of assessment. Tax is payable in advance as well" "In the case in hand, as indicated earlier, the direction to refund the amount has been made in appellate proceedings before the Tribunal. The amount is to be refunded to the assessee. It cannot be said that the 'refundee' will not be an assessee only for the reason that actually no assessment proceeding had taken place. It would be pertinent to refer to the provision contained under section 201 of the Income-tax Act which clearly provides that if the principal officer or the company liable to deduct the income-tax at source fails to do so, he shall be deemed to be assessee in default in respect of the tax. The definition of the word 'assessee' as contained under clause (7) of section 2 of the Act reads as under: "2(7) 'assessee' means a person by whom any tax or any other sum of money is payable under this Act, and includes- (a) every person in respect of whom any proceeding under this Act has been taken for the assessment of his income or of the income of any other pers....
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....p; in any other case, such interest shall be calculated at the rate of one-half per cent for every month or part of a month comprised in the period or periods from the date or, as the case may be, dates of payment of the tax or penalty to the date on which the refund is granted. Explanation.-For the purposes of this clause, "date of payment of tax or penalty" means the date on and from which the amount of tax or penalty specified in the notice of demand issued under section 156 is paid in excess of such demand. Clause (b) provides that the interest on the excess payment of tax in the case which are not covered under (a). In other words clause (b) deals with the cases where refund does not becomes due out of any collected under section 206C or paid by way of Advance Tax u/s 199 but the cases where the tax is paid as per the order of the revenue authority and demand raised accordingly. Thus, if the contention of the learned DR is accepted and interpretation to explanation to clause (b) is given in the manner as contended by the learned DR then no interest shall be payable in any of the cases falling under clause (b) sub-section (1) because in the cases where the tax is pa....
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....will lead to absurdity. 3.17 As regards the assessment referred in sub-section (4) of section 244A is concerned, the hon'ble Supreme Court in the case of ITO v. DDA (supra) held that It cannot be said that the "refundee" will not be an assessee only for the reason that actually no assessment proceeding had taken place. It would be pertinent to refer to the provision contained under section 201 of the Income-tax Act which clearly provides that if the principal officer or the company liable to deduct the income-tax at source fails to do so, he shall be deemed to be assessee in default in respect of the tax. The term "assessee" includes actual assessees as well as deemed assessees under the provision of the Act. It is therefore not correct to contend that unless there are actual assessment proceedings pertaining to any person, he cannot be considered to be an assessee. Thus once the order section 201 has been passed against the assessee, the department cannot take the plea of no assessment. Accordingly, we do not find any merit in the contention of Ld. D.R. 3.18 In the case of TATA Chemicals Ltd. v. DCIT reported in (2007) 16 SOT 481 (Mum.) in paragraphs from 20 to 26 the Mumbai....
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....Act passed by the AO. Section 156 of the Act talks of service of a notice of demand in the prescribed form, where any tax, interest, penalty, fine or any other sum is payable in consequence of any order passed under this Act. The order in the present case has been passed under section 195(2) of the Act for which notice of demand is to be issued under section 156 of the Act, which very categorically provides that where any tax, interest, penalty or any other sum is payable, because of 'any order passed under the Act'. The order under section 195(2) of the Act has been passed under the provisions of the Act and any notice of demand for the said amount due pursuant to order passed under section 195(2) is bound to be issued under section 156 of the IT Act. 23. The provisions of cl. (b) of section 244A(1) of the Act very categorically provides that interest on any refund arising because of payment of tax ' in any other case', which shall include the payment made by the assessee pursuant to order under section 195(2) of the IT Act by which the AO requisitioned the assessee to deduct the tax and deposit the same in treasury before remitting the amounts due to the recipients outside Ind....