TaxTMI 
TaxTMI 
TaxTMI 
2013 (5) TMI 71
X X X X Extracts X X X X
X X X X Extracts X X X X
....atches consequently does not entitle any broadcasting right to assessee and therefore no income is being accrued or arisen in India to the payee as the agreement has been signed outside India and matches will be played outside India. AO did not agree with the contention and directed assessee to deduct the tax at 11.72% (inclusive of surcharges) on the payment being made to M/s Nimbus Sports International Pte Ltd. The matter was carried in appeal before the CIT (A), who decided in favour of assessee vide the order dated 29.09.2008 wherein it was held that no taxes are deductible on account of amounts remitted to the recipient outside India as the same was not taxable in India. Consequent to that a refund of Rs. 2,65,11,410 was issued by AO to the assessee company without any interest under section 244A. Assessee filed an application under section 154 of the Act on 10.10.2009 requesting AO to rectify and grant interest under section 244A of the I.T. Act on the amount of TDS deposited under section 195(2) of the I.T. Act. AO held that there is no provision in the Income Tax Act for allowing the interest on the TDS deducted. Assessee preferred appeal before the CIT (A) for grant of int....
X X X X Extracts X X X X
X X X X Extracts X X X X
....claim placing reliance on the Board Circular and the circumstances stated therein. Had assessee deducted the tax on its own voluntarily and claimed the benefit of the Circular for issuance of the refund, then the Circular may be applicable. In the Circular it was clarified that the amount deducted cannot be considered as 'tax' and no interest under section 244A is admissible on refunds to be granted in accordance with this Circular (007 of 2007) or on the refunds already granted in accordance with the Circular Nos. 769 or 790. Since the refund was granted consequent to the order of the CIT (A), relying on the above Circular where claim of direct refund was considered by the CBDT is not correct. 6. The learned DR relied on the decision of the Godrej Industries Ltd. (supra), wherein assessee voluntarily deducted the tax and sought interest on refund under section 244A, it was held that refund of interest under section 244A can be allowed in those cases where notice of demand has been issued under section 156 and tax was paid in excess of such demand. In that case since no notice of demand under section 156 was issued, it was held that no interest could be allowed. However, in the ve....
X X X X Extracts X X X X
X X X X Extracts X X X X
....one-half per cent] for every month or part of a month comprised in the period from the 1st day of April of the assessment year to the-date on which the refund is granted: Provided that no interest shall be payable if the amount of refund is less than ten per cent of the tax as determined [under [sub-section (1) of section 115WE or] sub-section (1) of section 143 or] on regular assessment. (b) in any other case, such interest shall be calculated at the rate of 79 [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. (2) If the' proceedings resulting in the refund are delayed for reasons attributable to -the- assessee, whether wholly or in part, the period of the delay so attributable to him shall be excluded from the period for which interest is payable, and where any question arises as to the period to be excluded, it shall be decided by the Chief Commissioner or Commissioner whose decision thereon shall be final. (3) Where, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....- "Under the 'provisions of section 195(2), the assessee is empowered to make an application to the AO for non-deduction tax on such sums remitted to a non-resident which according to the assessee are not subject to tax .at source. In view of the provisions of DTAA between the two countries under the said sub-section (2) of section 195, the AO is empowered to determine such sums which are deductible out of remittance to be sent to the recipient and only 'after deduction and payment of such sums, the balance amount is to be remitted to the non-resident. In the instant case, in compliance of the order of the AO, the assessee had deducted the tax at source before remitting the amounts to Germany and Denmark. The order u/s 195(2) is appealable under the provisions of section 248. Section 248. Section 248 clearly provides that after deduction and payment of tax in accordance with the provisions of sections 195 and 200, if the assessee denies his liability to make such deduction, he is empowered to file an appeal before the CIT(A) in order to get a declaration that he is no liable to make such deduction. In the instant case, CIT(A) gran....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n. Section 156 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 u/s 195(2) had been passed under the provisions of the Act and any notice of demand, for the said amount due pursuant to order passed u/s 195(2) was bound to be issued u/s 156. The provisions of clause(b) of section 244A(1) very categorically provide interest, on any refund, arising because of payment of tax 'in any other case' which shall include the payment made by assessee pursuant to order u/s 195(2), 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 India. Accordingly, the assessee was entitled to receive interest u/s 244A(1)(b) on amount deposited pursuant to order passed u/s 195(2), which in turn had become due to the assessee because of the order passed in appeal against the said order u/s 195(2). The Board by way of Circular No. 769 dated 6.8.98 and Circular no. 790 dated 2.0.42.000 provided that the assessee shall be entitled to refund of such....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... to be contrary to law and assessee was held not to be treated an assessee in default. It was as a result of the order of the CIT (A), assessee was entitled to refund. The payment made by assessee was on demand under the provisions of the Act and refund also because due to assessee under the provisions of the Act. Therefore, it cannot be said that the refund was not granted to assessee under the Act. The decisions of the CIT (A) to this effect in our view, does not warrant any interference. The appeals of the Revenue are accordingly dismissed". 8. As can be seen from the above, the decision in the case of Tata Chemicals Ltd. and the decision of the Godrej Industries Ltd. were also considered. Similar view was also taken by the Coordinate Bench in the case of Taj TV Ltd. (supra) wherein on similar facts it was held as under: "3.19. In view of the decision of the Hon'ble Supreme Court in the case of ITO vs. Delhi Development Authority (Supra) and the decision of a Coordinate Bench of this Tribunal in the case of Tata Chemicals (supra), we hold that once the refund becomes due as per the provisions of this Act, the interest is payable as per the provisions o....