DCIT (INTERNATIONAL TAXATION), DEHRADUN vs. M/S. EXPRESS DRILLING SYSTEM LLC, DEHRADUN

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ITA 6673/DEL/2016Status: DisposedITAT Delhi14 August 2018AY 2008-095 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the CIT(A)'s decision, following the precedent set by the Jurisdictional High Court and the Delhi High Court in similar cases. It was held that interest under Section 234B was not leviable on the assessee for the period concerned.

What were the facts?

The Revenue appealed against the CIT(A)'s decision to waive interest under Section 234B for the assessment year 2008-09. The assessee argued that the issue was covered by previous decisions of the Tribunal and High Court.

What were the issues?

Whether interest under Section 234B is leviable when the payer is primarily liable for tax deduction and the assessee's income is eventually taxed at a higher rate. The finality of a High Court decision for the purpose of levying interest was also questioned.

Which sections of the Income-tax Act were involved?

Section 234B,Section 201

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH: ‘B’ NEW DELHI

Before: SHRI G. D. AGRAWAL & SH. LALIET KUMAR

Hearing: 14.08.2018

PER LALIET KUMAR, JM The present appeal is filed by the Revenue against the order dated 31/10/2016 passed by CIT(A)-2, Noida for Assessment Year 2008-09 on the following grounds:-

1.

“((i) Whether on the facts and in the circumstances of the case, the CIT (A) has erred in holding that the assessee is not liable to pay interest u/s 234B of the Act by ignoring the fact that the assessee cannot escape the liability to pay interest u/s 234B of the I.T. Act where the income is claimed to be taxable at a lower rate but is eventually held to be chargeable to tax at a higher rate in assessment proceedings.

(ii) . Whether on the facts and in the circumstances of the case and in law, the CIT (A) has erred in directing the Assessing Officer not to levy interest u/s 234B of the Income Tax Act, 1961 when the decision of the Hon’ble Delhi High Court in GE Packaged Power Inc has not attained finality as the review application of the Revenue is pending in the Hon’ble Supreme Court.

(iii) The appellant prays for leave to add, amend, modify or alter any grounds of appeal at the time or before the hearing of the appeal.

2.

At the outset, the Ld. AR submitted that the case of the Revenue is covered in favour of the assessee by the decision of the Co-ordinate Bench in the matter of the assessee for the Assessment Year 2010-11 & 2011-12, in wherein identical issue was adjudicated by the Bench after relying upon the decision of the Hon’ble Jurisdiction High Court in the matter of CIT vs. Oil Limited (ITA No. 56 of 2007) and also in the matter of GE Packaged Power Inct. (ITA No. 353/Del/2014).

3.

The Ld. DR on behalf of the Revenue, has not dispute this fact.

4.

We have careful considered the rival contentions of parties and perused the material available on record. The Co-Ordinate Bench in para 6 held as under:-

“6. We have heard Ld. A.R. of the assessee and perused the relevant records, especially the impugned order. We find that the position of law as it stands till the year 2011-12 as interpreted by various Courts support the contention of the Assessee that interest on advance tax was not payable.

Apart from the judgment of Jurisdictional High Court in the case of CIT vs. Oil Limited (ITA No. 56 of 2007), the decision of Hon'ble Delhi High Court in the case of GE Packaged Power Inc. (ITA No. 353/2014) and connected matters - TS-27-HC-2015 (DEL) also is in favour of the assessee in which it has been held that the primary liability of deducting tax (for the period concerned, since the law has undergone a change after the Finance Act, 2012) was that of the payer. The payer would be an assessee in default, on failure to discharge the obligation to deduct tax, under section 201 of the Act and no interest was leviable on the assesses under section 234B of the Act. Therefore, in our considered view, the Ld. CIT(A) has rightly allowed this issue in favour of the assessee by respectfully following the above precedent, which does not need any interference on our part, hence, we uphold the well reasoned order passed by the Ld. CIT(A) on the issue in dispute and accordingly reject the grounds raised by the Revenue. 6.1 Following the consistent view as taken in assessment year 2010-11, as aforesaid, the similar ground raised in assessment year 2011-12 is also decided in favour of the assessee and against the revenue.”

5.

Respectfully following the decision of the Co-Ordinate Bench in the case assessee we here by dismiss the appeal filed by the Revenue, as no distinguishable fact brought to any notice by the parties.

6.

In the result, the appeal filed by the Revenue is dismissed.

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