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2016 (2) TMI 342 - AT - Income TaxRectification of mistake - whether the tax is required to be deducted tax at source from payments made by a foreign bank’s Indian branch to its overseas head office? - Held that:- The payment is made by the non resident to himself, there is no obligation to deduct tax at source from such payments. Hon’ble Calcutta High Court, in the case of ABN Amro Bank NV Vs CIT [2010 (12) TMI 340 - CALCUTTA HIGH COURT] has held that there is tax deduction at source requirement, under section 195, from the payment of interest made by the Indian branch of a foreign bank to its offices abroad. It is thus clear that the impugned disallowance, even on merits, is unsustainable in law. Accordingly, the impugned disallowance, by way of rectification of mistake under section 154, is wholly unsustainable in law. The CIT(A) was indeed in error in upholding the impugned rectification order on this aspect of the matter. Interest under section 244A not admissible in respect of delay in making claim of exemption under section 10(23G) - Held that:- The law is quite unambiguous on this aspect as it provides that “where any question arises as to the period to be excluded, it shall be decided by Chief Commissioner or Commissioner whose decision thereon shall be final”. Undoubtedly, such a decision by the Commissioner of the Chief Commissioner cannot be a subject matter of then the call about the period for exclusion of interest is to be determined by the Commissioner or the Chief Commissioner. Obviously, no such exercise was carried out at the assessment stage or even at the stage of the rectification proceedings, and it was, therefore, not open to the Assessing Officer, on his own, to decide the period for which interest under section 244A was to be declined. For this reason also, not declining the interest under section 244A for the period of 1.4.2002 to 20.1.2005, was not a mistake apparent on record. In view of the above discussions, and for more reasons than one, the Assessing Officer was in error in passing the impugned order under section 154 on this aspect of the matter as well.
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