9911796707
TMI Blog2012 (11) TMI 184X X X X Extracts X X X X X X X X Extracts X X X X ..... the year 1998, the petitioner desired to update its computer system and to replace its existing computer system with a new one. For such purpose, the petitioner took technical assistance of a German company called M/s. IBB Information System (hereinafter referred to as "the foreign company"). Towards such assistance, the petitioner agreed to pay Deutsche Mark 9 lakhs equivalent to Rs.1,94,94,000/. A provision in this respect was made in the books of accounts as on 31.3.1998 at the prevailing exchange rate. 2.2 On such provision made, the petitioner deducted tax at source under section 195 of the Income Tax Act, 1961("the Act" for short), of a sum of Rs. 19,49,400/. Such amount of Rs. 19,49,400/was also deposited with the Income Tax depart ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the respondents committed a grave error in rejecting the request of the petitioner. He pointed out that tax was deducted twice and also deposited with the Government of India. To the extent the same was in excess of the petitioner's liability, the same must be refunded. He submitted that the respondents cannot retain the amount which was deposited under mistake since such deposit cannot partake the character of tax. Such retention of amount would be without authority of law. 3.1 Counsel submitted that under circular dated 6.8.1998, the authorities had to consider the refund claim of the petitioner. He submitted that any subsequent change in the position by virtue of circular dated 20.4.2000, would not justify rejection of the petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ars dated 6.8.1998 and 20.4.2000, the petitioner cannot claim any interest on such refund claim. 5. Having thus heard learned advocates for the parties, we find that material facts are not in dispute. The petitioner at the time of making the provision for technical assessment fees, payable to the foreign company deducted an amount of Rs. 19,49,400/as TDS and also deposited such sum with the Government of India on 1.6.1998. When the fees for technical assistance were actually remitted, the petitioner once again deducted a sum of Rs. 21,82,500/- towards tax at source and also deposited the sum with the Government of India on 18.8.1998. When the petitioner realized such a mistake, an application was filed with the respondents on 2.11.1998. Su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... source from payments to the nonresident, after taking the prior approval of the Chief Commissioner concerned." 7. It is not in dispute that subsequently in the circular no.790 dated 20.4.2000, the third category mentioned in clause(c) of para.(1) of circular dated 6.8.1998 came to be deleted and only two categories mentioned in clause(a) and (b) were retained. In para (9) of the circular dated 20.4.2000, it was clarified that the refund was not to be issued to the deductor of tax in the cases referred to in clause(i)(c) of para.(1) of circular no.769 dated 6.8.1998. 8. In the case on hand, we fail to see how the case of the petitioner was not covered under clause(i)(c) of para.(1) of circular no.769 dated 6.8.1998. Said provision was suf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... must be rejected. Simply because the contract was completed did not mean that the petitioner was liable to deduct tax twice. It was a pure mistake. 9. The opposition in respect of both the counts therefore, must fail. Firstly, as already noted, we are unable to see how as contended by the respondents case of the petitioner did not fall under clause(i)(c) of para.(1) of circular no.769 dated 6.8.1998. Subsequent deletion of such provision by virtue of circular dated 20.4.2000 could not have been applied to the petitioner. Quite independent of both the circulars, we are of the opinion that deduction of tax at source and depositing with Government twice was a pure mistake. The respondents cannot retain any amount that the petitioner paid und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0, it is clarified that on such refund, no interest under section 244A of the Act would be payable since such amount is not a tax. However, such provision cannot be applied in the present case. Firstly, we are of the opinion that present is not a case of tax deducted at source which was later on found to be in excess of the petitioner's liability. Present is a case where out of sheer mistake, an amount was deducted twice and also deposited with the Government. As per the counsel for the Revenue himself, the deduction of Rs. 19,49,400/and depositing with the Government at the time of making provision for payment was not a tax at all. If that be the position, such amount which was deposited with the Government under mistaken belief ought to h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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