DCIT (INTERNATIONAL TAXATION), DEHRADUN vs. M/S WELL FLOW DRILLING SERVICES WLL, MUMBAI

This appeal has been filed by the revenue against the order of the ld. CIT(A)-2, Noida, dated 30.11.2016.

The only dispute taken up by the revenue is that the Ld. CIT(A) erred in dismissing the interest charge u/s 234B of the Income Tax Act.

The AO charge interest u/s 234B of the Act for failure to pay the advance tax. .Del.2017 Well Flow Drilling Services WLL. 4. The appellant is a foreign company and was in receipt of contract income from ONGC during the year under consideration. For making such contractual payments to the appellant, ONGC was under an obligation to deduct tax at source at the rates in force, which was duly deducted by ONGC. 5. It was submitted before the Ld. CIT(A)that since the entire income of the appellant was subject to deduction of tax at source, there was no liability on the appellant to pay advance tax under section 208 of the Act. Therefore, in the absence of any such liability on the appellant, the levy of interest u/s 234B is not justified. Ld. CIT(A) allowed the grounds of the assessee on this issue.

We have gone to the record before us. The provisions of section 234B of the Act are attracted in a case where, in any financial year, an assessee, who is liable to pay advance tax under the provisions of 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 90% of the assessed tax.