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2010 (8) TMI 37 - HC - Income Tax
Interest – Short payment of Advance Tax – Short deduction of TDS by the person making payment - whether interest u/s 234B is mandatory? – AO found that there was short payment of taxes inasmuch as the advance tax was not paid by the assessee on due dates and therefore, the Assessing Officer was of the opinion that the assessee had incurred interest liability under Section 234B of the Act. – In view of AO it was for the assessee to show income from all the projects, compute the tax and take credit of taxes paid either prepaid or otherwise by enclosing the proof of such payment along with return of income. The TDS certificates were to be collected by the assessee even where taxes are borne by the payer. Since the assessee had not disclosed any certificates nor shown proof of payment of taxes, the Assessing Officer held that the assessee was liable to pay interest under Section 234B of the Act. – Held that: held that the assessee was not liable to pay any interest under Section 234B of the Act - judgments of the Uttaranchal and Bombay High Courts in the matters of CIT and Anr. vs. Sedco Forex International Drilling Co. Ltd. [2008 -TMI - 11559 - UTTARANCHAL High Court] and DIT (International Taxation) vs. NGC Network Asia LLC [2009 TMI - 33839 - BOMBAY HIGH COURT] followed
Interest u/s 234D - Tribunal has held that the assessee was not liable to pay the interest under the aforesaid provision which was normally charged from the assessee for the assessment years 2002-03 and 2003-04. – Held that: - any provision made in a statute for charging or levying interest on delayed payment of tax must be construed as a substantive law and not adjectival law. So construed and applying the normal rule of interpretation of statutes if the Revenue's contention is accepted it leads to conflicts and creates certain anomalies which could never have been intended by the legislature. - therefore, of the opinion that the Tribunal was right in deleting the interest under Section 234D of the Act for the period prior to the assessment year 2004-05. As a result, these appeals of the Department are dismissed.