TMI Blog2008 (3) TMI 509X X X X Extracts X X X X X X X X Extracts X X X X ..... etween Hatch Associates Pty. Limited (formerly known as BHPE Engineering Pty. Limited) and Brown Root Services Asia Pacific Pty. Limited (formerly known as Kinhil Engineers Pty. Limited). During the previous year relevant to the assessment year 2001-02, the appellant was engaged in the execution of a contract with Paradip Port Trust ( PPT ) to provide project management services, which included review of designs, construction, supervision, procurement and commissioning. The appellant filed its return of income for the assessment year 2001-02 on 31-10-2001 declaring a taxable income of Rs. 17,025,980 from the above mentioned activities and claiming a refund of Rs. 5,72,332. While completing the assessment under section 143(3) of the Act th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arned CIT(A) holding that interest under section 234B is not chargeable. The Assessing Officer after calculating the tax payable levied interest under section 234B. Before the learned CIT(A) the assessee denied his liability to pay advance tax and correspondingly any interest under section 234B. It was submitted that since the entire income received by the assessee is subject to deduction of tax at source under section 195, the assessee is not required to pay any advance tax as per the provisions of section 208 read with section 209(1)( a ) and section 209(1)( d ) of the Act. Since the assessee is not liable to pay any advance tax, the assessee cannot be held liable to pay interest under section 234B. Reliance was placed on the decision o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his backdrop it has to be seen that sections 207 and 208 cast a liability on the assessee to pay advance tax on such tax payable (on income on which tax is deductible at source but has in actual not been deducted) in accordance with section 208 of the Income-tax Act. Thus, in absence of deduction of tax at source if advance tax is not paid the liability to pay interest under section 234B will arise. When read harmoniously in this light it will become clear why the Legislature has used the word Tax Deducted at Source in Explanation to sub-section (1) in section 234B but has used words Tax which would be deductible at source in clause ( d ) of sub-section (1) of section 209, dealing with computation of advance tax. The view expressed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... XVII is Rs. 5,000 or more. Under section 209(1) the amount of advance tax payable is to be computed by firstly estimating his current income and income-tax thereon shall be calculated at the rate in force in the financial year. The income-tax calculated shall be reduced by the amount of income-tax which would be deductible at source during the said financial year. Thus the liability to pay advance tax will arise only where there is tax liability payable under section 209 read with section 208 of the Act. If the assessee estimates his current income but the tax payable on such current income is to be reduced by the tax if any deductible at source. The wordings used herein are deductible and not actually deducted. Accordingly, while estimati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of CIT v. Sedco Forex International Drilling Co. Ltd. [2003] 264 ITR 320 . No contradiction has been cited. The argument of the learned DR is also considered. However, the argument does not appeal to us. If the argument is accepted, it will amount to rewriting the provision of section 209(1)( d ) namely instead of words Income-tax which would be deductible at source will be replaced by the words Income-tax deducted at source . It is settled law that the words are to be interpreted as appearing in the section itself and the court cannot rewrite the law or even supply causus omissus. Since the pre-condition for levy of interest under section 234B is liability to pay advance tax and since there was no liability to pay advance ..... X X X X Extracts X X X X X X X X Extracts X X X X
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