2018 (1) TMI 812

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....d under Section 234B and Rs. 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 234C of the Act. Further, it is stated that the interest under Section 234B or 234C of the Act is chargeable provided the assessee who is liable to pay advance tax under Section 208 of the Act has failed to pay such tax. Further, it is submitted that the petitioner qualifies the conditions specified in the CBDT circulars dated 02.05.1994, 23.05.1996, 30.01.1997 and 26.06.2006 and due to unavoidable circumstances which prevented the petitioner from remitting advance tax. Therefore, the petitioner seeks to bring their case under Clause 2(e)....

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....ntly 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 cannot be a reason to wipe away the tax liability. In fact, the very same contention was advanced before the Advance Ruling Authority by the revenue when the petitioner had approached for necessary advance ruling which was negatived and it was held that the status of the joint venture is not that of association of person. One more contention was advanced stating that the petitioner had obtained the Advance Ruling from the authority by misrepresentation and fraud. All these contentions were considered by the Division Bench in the case of Chennai....

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....n 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 form and it was wrongly filed in the status of Association of Persons. In order to clear the conflicts thus arising from the positions taken by the assessee on the one hand and the Department's stands on the other, the foreign company thus went before the Advance Ruling Authority for a decision. In the background of these facts, the Advance Ruling Authority held that these was no deliberate suppression of material facts as regards the non-filing of the return before the Department. In that context, the Advance Ruling Authority held that th....

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....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 paragraph, with the debate on the status of the assessee existing at least till 2000 and the assessee not having any information as regards the order passed by the Advance Ruling Authority, we have no hesitation in accepting the plea of the assessee that the assessee herein could not be declared as an assessee in default for the purpose of interest under Section 201(1A) of the income Tax Act. It may be of relevance to note herein that the assessee had deducted tax at 2%. The foreign company had paid tax under Section 44BBB at 4.8% and sought....