TaxTMI 
TaxTMI 
TaxTMI 
2018 (1) TMI 941
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....us dates and after making payment, the Stock Broker had credited the net proceeds into his bank account, which was held outside India. For the assessment years 1996-1997 to 2005-2006, the petitioner had filed his Income Tax Returns disclosing only the amount, he had earned in India as his income which he earned abroad, was not disclosed in the Income Tax Returns for the said assessment years. The petitioner approached the first respondent viz., the Income Tax Settlement Commission and filed an application for the relevant years, wherein, he had offered all income, which were earned abroad during the assessment years 1996-1997 to 2005-2006, which includes the salary income and the income through Employees Stock Option. According to the petitioner, the aggregate income offered for various years works out to Rs. 9,45,27,328/-. The Settlement Commission admitted the application by order dated 16.06.2006 and ultimately, by order dated 05.02.2008, the case was settled accepting the additional income offered by the petitioner by passing an order under Section 245 D (4) of the Act and granting immunity from penalty and prosecution. In the said order, the Settlement Commission charged inter....
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...., tax became payable by the petitioner. Therefore, the tax payable by the petitioner cannot exceed the tax deductible at source and in such a situation, the petitioner is not required to pay any advance tax. Therefore, the petitioner contended that interest under Section 234 B is not chargeable as Section 191 only requires that if the tax is not deducted at source, such income tax shall be payable by the assessee directly. Thus, the liability, which extends to the payment of tax under Section 191 do not extend to payment of interest under Section 234 D. In support of his contention, the petitioner placed reliance upon the two decisions of the Income Tax Appellate Tribunal reported in (79 ITD 481) Mitsui Engineering & Ship Building Company Ltd., dated 28.11.2000 and SNC Lavalin International Incorporated (2008-TIOL-576-ITAIT-Delhi) dated 29.08.2008. 5. The petitioner further stated that his employer viz., M/s.Columbia Sportswear Company, abroad has paid the interest for the default for not deducting TDS under Section 201(1A) till the tax payment of the assessee/ petitioner to the Office of the Income Tax Officer, TDS Ward No.1 (1), Chennai and the charge of the interest under Secti....
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....se items were not liable for TDS and hence, the assessee could not have excluded tax on these, in working out the advance tax liability. 10. Further, with regard to the contention raised by the petitioner that they have paid interest under Section 201(1A) of the Act on the defaulted TDS before the concerned Income Tax Officer in charge of TDS matters and therefore, charging interest under Section 234B on the shortfall in advance tax would amount to subject to double levy, the Commission pointed out that the interest under Section 234(B) and interest under Section 201(1A) are two types of defaults and by different entities and the operation of these provisions are in two different spheres and on different subjects and it cannot be held that there is any double levy on the same subject for the same default. Though, the petitioner referred to two decisions of the Tribunal, the Commission did not consider the effect of those two decisions but observed that there are no such rulings by the jurisdictional High Court or the Hon'ble Supreme Court of India and accordingly, dismissed the miscellaneous petition. 11. We need not labour much to find a solution to the controversy raised in....
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....ery of the tax alleged to be in default once again from the assessee considering that M/s.Pradeep Oil Corporation had already been taxed on the amount received from the asssessee. The Department conceded before the Tribunal that recovery could not once again be made from the tax deductor, where the payee included the income on which the tax alleged to have been short deducted in its taxable income and paid taxes thereon. 14. The High Court interfered with the order passed by the Tribunal on the ground that on account of the earlier order dated 12.07.2002, the Tribunal has attained finality and the order got merged with the order of the High Court and the Tribunal could not have re-opened the matter. 15. While examining the correctness of the said order, the Hon'ble Supreme Court pointed out that the assessee had paid interest under Section 201(1A) of the Act, and there is no dispute that the tax due had been paid by deductee M/s.Pradeep Oil Corporation and the Circular issued by the CBDT in Circular No.275/201/95-IT(B), dated 29.01.1997 would be applicable to the facts situation before it. 16.Thus, the Hon'ble Supreme Court held that the Tribunal came to the right conclu....
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....ax, the payer should deduct tax thereon at the rates in force. The said TDS provisions are meant for tentative deduction of income-tax subject to regular assessment. 20. After rendering the above finding, the Court proceeded to examine the consequences of failure to deduct advance tax in whole or part and held as follows: The said section 200 creates an obligation on the person deducting tax to pay the same within prescribed time to the credit of Central Government or as the Board may direct. Sec.201 provides for consequences of failure to deduct or to pay tax, whereas sub-section (1A) of section 201 provides for liability to pay interest. Now, liability topay interest as stated under Section 201 is on the person who fails to deduct advance tax. As against this, if one turns to the Chapter XVII of the Act, it provides for chargeability of interest in certain cases. Section 234A provides for payment of interest for defaults in furnishing return of income, whereas section 234B provides for payment of interest for defaults in payment of advance tax and section 234C provides for payment of interest for deferment of advance tax. All these three sections create liability on the assess....
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....hat section were satisfied, the liability to pay the interest would arise. This contention was negative on the following terms: We are not persuaded by this submission of Mr. Sabharwal. It is stated at the cost of repetition that the liability to deduct or collect the tax at source is that of the payer. Therefore, for the purposes of Section 234B of the Act, the question would be as to whether the payee, i.e. The assessee in this case, had any role in deducting or collecting the tax. Once that is in the negative, and it was not duty of the payee/assessee, the question of payment of any interest would not arise as it cnnot be said, in such circumstances, that the assessee is in default for the purposes of Section 234B of the Act. No doubt, as per the judgment in the case of Anjuum Ghaswala (supra), if there is a default in making the payment of advance tax, the consequence which is to follow is that the interest becomes payable under Section 234B of the Act. But in the instant case, the provisions of Section 234B of the Act would not be attracted at all. 24. The Division Bench of Delhi High Court went on to examine the definition of the advance tax as defined under Section 2 (1) o....