TMI Blog2008 (5) TMI 448X X X X Extracts X X X X X X X X Extracts X X X X ..... in India. These technicians were residents of various foreign countries. The Assessing Officer noted that these technicians had been paid salary in excess of the exemption limit under the Income-tax Act. The Assessing Officer therefore, passed an order under section 163(1) read with section 149(3) treating M/s. Pride Foramer SAS as agents of these technicians and issued notice under section 148 to the said concern as a representative assessee of the foreign technicians. In the assessments made, the Assessing Officer assessed the salary as well as the perquisite received by the technicians in the name of M/s. Pride Foramer SAS as representative assessee and since no tax had been deducted at source and no advance tax had been paid, he charged interest under section 234B in each case. In appeal, CIT(A) observed that the entire income of the foreign technicians was liable to deduction of tax at source and therefore, as per the provisions of section 209(1)( d ) the tax payable for the purpose of advance tax was required to be reduced by the tax deductible. Since the entire tax payable was tax deductible, there was no advance tax payable by the assessee. Accordingly he directed the Asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the Ld. CIT DR pointed out that in the earlier decisions in case of Motorola Inc. ( supra ) and other cases, provisions of section 191 had not been considered. In view of the judgment of Hon ble High Court of Uttaranchal in case of Halliburton Offshore Inc. ( supra ) in which it was clearly held that the provisions of section 191 were not overridden by the provisions of sections 192, 208 and 209, the tax not deducted at source was payable as advance tax and in case of default, interest under section 234B was chargeable. The relevant portion of the judgment in case of Halliburton Offshore Inc. ( supra ) referred to by the ld. DR were as under : "It is important to note that section 234B imposes interest, which is compensatory in nature and not as a penalty ( see Union Home Products Ltd. v. Union of India [1995] 215 ITR 758 (Kar.) at page 766). Secondly, although section 191 of the Act is not overridden by sections 192, 208 and 209(1)( a )( d ) of the Act, the scheme of sections 208 and 209 of the Act indicates that in order to compute advance tax the assessee has to, inter alia, estimate his current income and calculate the tax on such income by applying the rates ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch are relevant in this case are reproduced below as a ready reference : "209. (1) The amount of advance lax payable by an assessee in the financial year shall, subject to provisions of sub-sections (2) and (3), be computed as follows, namely : ( a )........... ( b )........... ( c )........... ( d )The Income-tax calculated under clause ( a ) or clause ( b ) or clause ( c ) shall, in each case, be reduced by the amount of Income-tax which would be deductible (or collectible) at source during the said financial year under any provision of this Act from any income (as computed before allowing any deductions admissible under this Act) which has been taken into account in computing the current income or, as the case may be, the total income aforesaid; and the amount of income-tax so reduced shall be the advance lax payable." 4.2 Further, section 191 of the Act provides that in cases of income in respect of which there is no provision for deducting tax at source or in cases where the income-tax had not been deducted at source, the income-tax shall be payable by the assessee direct. The said section is reproduced below as a ready reference. "191. Direct payment. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance tax has to be computed under the provisions of section 209, which is a specific provision for this purpose. Under clause ( d ) of sub-section (1) of section 209, the tax deductible at source has to be excluded while computing the advance tax payable. Had the Legislature wanted that only the tax actually deducted at source or collected at source, should be excluded, they would not have used the words tax deductible at source or collectible at source . The phrase deductible at source has not been used casually or without any purpose. There is a reasoning for excluding the tax deductible at source because in cases where tax has not been deducted at source by the person responsible, the said person is deemed to be an assessee in default under section 201 in respect of whole or any part of tax which had not been deducted at source and he is also liable for payment of interest and penalty under the said section. Since the tax deductible at source in case not deducted, could be recovered with interest from the person responsible for deducting the same at source, the tax deductible has been excluded from the advance tax liability of the assessee. The provisions of section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e". Therefore, when tax is deductible or collectible at source from salary which is the only source of income, no advance tax would be payable by such an employee.............." 4.6 Thus, the issue had also been considered by the decision of coordinate bench in case of Western Geco International Ltd. ( supra ) in which provisions of section 191 had been specifically dealt with. The Tribunal following the decision of the Special Bench in the case of Motorola Inc ( supra ) held that tax deductible at source had to be excluded while computing the advance tax liability. The argument of Ld. CIT DR is that these cases require reconsideration in view of the specific observation of Hon ble High Court of Uttaranchal in case of Halliburton Offshore Services Inc. ( supra ) that the provisions of section 191 are not overridden by the section 209. We have dealt with this argument of Ld. CIT DR in earlier part of this order and for the reasons given therein we are unable to accept these arguments. There is no judgment of any High Court or the Apex Court brought to our notice in which it has been specifically held that the amount of tax payable direct by the assessee under the provision ..... X X X X Extracts X X X X X X X X Extracts X X X X
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