TMI Blog2011 (11) TMI 505X X X X Extracts X X X X X X X X Extracts X X X X ..... Reopening of assessment - Held that:- There is no material to indicate as to how the inclusion of interest on income tax refund under Article 11 was incorrect which led the AO to issue notice u/s 148. It is an obvious case of change of opinion on the same set of facts which were available before the AO during the course of original assessment proceedings also - the interest on income-tax refund is liable to be taxed under Article 11 at the reduced rate - Decided in favor of the assessee. Interest u/s 234B for non-deposit of Advance tax - Held that:- Assessee in the instant case is a non-resident and by virtue of section 195 all the payments made to the assessee are subjected to deduction of tax at source. Under these circumstances, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Tribunal in Asstt. CIT v. Clough Engg. Ltd. [2011] 130 ITD 137/11 taxmann.com 70 (Delhi) holding that the interest on income tax refund is liable to be considered under Article 11(2) of DTAA with Australia. Similar view has been taken by the Mumbai Bench of the Tribunal in Hapag Lloyd Container Linie GmbH v. Asstt. DIT [2011] 9 Taxmann.com 126 in which case it has been held that interest on income-tax refund is chargeable to tax under Article 11 of Indo-Germany DTAA. In view of these precedents it becomes apparent that the interest on income-tax refund cannot be considered as business profit but has to be covered under Article 11. The ld. DR has not shown any difference in the language of the relevant DTAA vis- -vis that consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tisement income not offered by the assessee was brought to tax by the Department. In para 3 of the assessment order, it was stated (by the Assessing Officer) that the income of the assessee in the current year is also being earned through the PE (permanent establishment) in India. Since, the assessee has a PE in India, the total assessable income should have been taxed at 41%. However, tax levied @ 10% on Rs. 3,94,33,643/-. The short levy of tax involved amounted to Rs. 1,22,24,429/-. In view of the above, there is reason to believe that the income chargeable to tax has escaped assessment within the meaning of Sec. 147 explanation 2(C) of the IT Act and it is a fit case to reopen the assessment." 5. The assessee objected to the initia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the assessee's contention in the order passed by him u/s 143(3) of the Act. There is no material to indicate as to how the inclusion of interest on income tax refund under Article 11 was incorrect which led the Assessing Officer to issue notice u/s 148. It is an obvious case of change of opinion on the same set of facts which were available before the Assessing Officer during the course of original assessment proceedings also. The Hon'ble Supreme Court in CIT v. Kelvinator of India Ltd . [2010] 320 ITR 561/187 Taxman 312 has held that no reassessment can be done on mere change of opinion of AO even after 01.04.1989. The contention of the learned Departmental Representative that the insertion of Explanation 2 to section 147, deeming ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee in India be not decided, as having become academic. In view of our decision on the above grounds, we are not inclined to decide the issue raised in this ground. The same is therefore, dismissed as infructuous. 8. Ground no.4 is about the levy of interest u/s 234B. 9. We have heard the rival submissions and perused the relevant material on record. The assessee is a non-resident whose income was determined by the Assessing Officer inter alia charging interest u/s.234B. The learned CIT(A) upheld the action of the A.O. Section 195 provides that any person responsible for paying to a non-resident, any sum chargeable under the provisions of this Act, shall at the time of credit of such income to the account of the payee or at t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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