AI Drafter 
TaxTMI 
TaxTMI 
2023 (9) TMI 1612
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.... of the interest under sections 234B and 234C of the Act was raised by the assessee in such rectification application?" 2 Facts in brief are as under: 2.1 The assessee belongs to Royal Dutch Shell Group, which is one of the largest groups in the world engaged in oil exploration, production and refinery management having about 50 refineries in the world. The assessee has accumulated a large pool of commercial and technical expertise required for the operation and maintenance of oil refineries and provides consultancy services and assistance in various commercial and technical aspects related to operation of refineries. 2.2 During the financial year ending on 31 March 2009, relevant to AY 2009-10, the assessee rendered services to the several Indian entities. The revenue earned from rendering services to the Indian entities were offered to tax at the rate of 10% on a gross basis as Royalty / Fees for technical services as per Article 12 of the India - Netherlands tax treaty. Further under its contract with Center for High Technology ('CHT'), the assessee, inter alia was requested to render certain supervisory services to CHT. For the purpose of rendering these supervisory se....
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....ed in a case where the tax is deductible under Sec.195 of the Act on the payments made and no advance tax is payable by the assessee. 4 The issue is covered by a decision of the Hon'ble Supreme Court in the case of Director of Income Tax, New-Delhi vs. Mitsubishi Corporation., reported in (2021) 130 taxmann.com 276 (SC). Paras 11 to 22 of the decision read as under: "11. The relevant provision of the Act which falls for consideration in this case are in Chapter XVII, which pertains to collection and recovery of tax. In accordance with section 190 of the Act, tax on income shall be payable by deduction or collection at source or by advance payment, notwithstanding that the regular assessment in respect of any income is to be made in a later assessment year. Any person responsible for paying to a non-resident or to a foreign company shall, at the time of the credit of such income, deduct income-tax thereon at the rate in force, according to section 195. Section 200 provides that a person deducting any sum in accordance with the provisions of Chapter XVII shall pay within the prescribed time, the sum so deducted to the credit of the Central Government. The consequences of ....
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....ect to the other provisions of this section, where, in any financial year, an assessee who is liable to pay advance tax under section 208 has failed to pay such tax or, where the advance tax paid by such assessee under the provisions of section 210 is less than ninety per cent of the assessed tax, the assessee shall be liable to pay simple interest at the rate of one per cent. for every month or part of a month comprised in the period from the 1st day of April next following such financial year to the date of determination of total income under sub-section (1) of section 143 and where a regular assessment is made, to the date of such regular assessment, on an amount equal to the assessed tax or, as the case may be, on the amount by which the advance tax paid as aforesaid falls short of the assessed tax. Explanation I.- In this section, "assessed tax" means the tax on the total income determined under sub- section (1) of section 143 and where a regular assessment is made, the tax on the total income determined under such regular assessment as reduced by the amount of- (i) any tax deducted or collected at source in accordance with the provisions of Chapter XVII on a....
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....mounts without deduction of taxes at source, they should not be allowed to then rely on section 201 of the Act to reduce their advance tax lability. In this connection, it was submitted by the Revenue that the expression "would be deductible or collectible" would not include amounts, which had not been deducted at the time of payment and, in fact, were paid to the assessee by the payer. 14. The primary issue before us pertains to the interpretation of section 209(1)(d). A proviso was inserted to section 209(1)(d) by the Finance Act, 2012, which reads as under:- "Provided that for computing liability for advance tax, income-tax calculated under clause (a) or clause (b) or clause (c) shall not, in each case, be reduced by the aforesaid amount of income-tax which would be deductible or collectible at source during the said financial year under any provision of this Act from any income, if the person responsible for deducting tax has paid or credited such income without deduction of tax or it has been received or debited by the person responsible for collecting tax without collection of such tax." 15. Notes to the memorandum explaining the provisions in the F....
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....v. SK Roy (1966) Supp. SCR 259 had upheld the well-recognised principle that in dealing with matters of construction, subsequent legislation may be looked at in order to see what is the proper interpretation to be put upon the earlier Act, where the earlier Act is obscure or ambiguous or readily capable of more than one interpretation. While construing sub- section 2(b) of section 80-HHC of the Act, as it stood prior to its amendment and thereafter, this Court in Gem Granites v. CIT [2004] 141 Taxman 528/271 ITR 322 held as follows: 13. The introduction of the phrase "other than" in clause (b) of sub-section (2) of section 80- HHC in 1991, in our opinion, indicates the carving out of a specific class from the generic class of "minerals and ores". This means that were it not for the exception, the specified processed minerals and ores would have been covered by the words "minerals and ores". It also indicates that only the minerals and ores subjected to the process of cutting and polishing would be entitled to the benefit of section 80-HHC meaning thereby that all other species of processed minerals and ores would continue to be covered by the general exclusion applicable t....
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....e other provisions of Chapter XVII. The liability for payment of interest as provided in section 234B is for default in payment of advance tax. While the definition of "assessed tax" under section 234B pertains to tax deducted or collected at source, the pre-conditions of Section 234B, viz. liability to pay advance tax and non- payment or short payment of such tax, have to be satisfied, after which interest can be levied taking into account the assessed tax. Therefore, section 209 the Act which relates to the computation of advance tax payable by the assessee cannot be ignored while construing the contents of section 234B. As we have already held that prior to the financial year 2012-13, the amount of income-tax which is deductible or collectible at source can be reduced by the assessee while calculating advance tax, the respondent cannot be held to have defaulted in payment of its advance tax liability. We uphold the view adopted in the imped judgement of the Delhi High Court in Civil Appeal No: 1263 of 2016 as well by the Madras High Court in the Madras Fertilizers Ltd. case (supra), that the Revenue is not remediless and there are provisions in the Act enabling the Revenue to pr....