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2016 (2) TMI 342 - ITAT MUMBAI

2016 (2) TMI 342 - ITAT MUMBAI - TMI - Rectification 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 requi .....

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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 Comm .....

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e 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. - I.T.A. No. 4689/Mum/2010 - Dated:- 8-1-2016 - PRAMOD KUMAR AM AND PAWAN SINGH JM For the Petitioner : P J Pardiwalla For the Respondent : Harshad Vengurlekar ORDER PER PRAMOD KUMAR, AM: 1. By way of this appeal, the assessee has challenged correctness of the order dated 29th March 2010, passed by the CIT(A) in the matter of order under section 154 r.w.s. .....

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sident and its assessment under section 143(3) was completed on 28th March 2005 at an assessed income of ₹ 24,18,54,060. Subsequently, however, the revenue audit party pointed out certain mistakes said to have crept in this assessment order. The mistakes so pointed out, on the basis of which the impugned rectification of mistakes under section 154 is said to have been carried out- as is started in the impugned order itself, were as follows: It was observed by the audit as under: 1. In cycl .....

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ot in order on account of delayed claim of ₹ 2,50,65,962 under section 10(23G). Accordingly, notice under section 154 was issued on 10/01/2008 followed by letter dated 13/5/2008 intimating the assessee with respect to the above. 4. As for the first point, while the Assessing Office noted that the correct figure of interest payment is ₹ 7,827 but as no deduction of tax at source was made from this payment, he proceeded with disallowing the same under section 40(a)(i). As for the secon .....

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ion of ₹ 7,827 and reducing the interest claim under section 244A by ₹ 30,10,338), the assessee carried the matter in appeal before the CIT(A) but without any success. As for the first point, learned CIT(A) noted the assessee s reliance on a special bench decision of this Tribunal in the case of ABN Amro Bank NV Vs ADIT [(2005) 97 ITD SB 89 (Kol)], but simply brushed it aside and upheld the stand of the Assessing Officer. He did refer to the CBDT circular 740 and relied upon the same .....

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he date of receipt of refund, the CIT(A) declined the same by holding that there is no such enabling provision under the Act. The assessee is aggrieved and is in appeal before us. 5. We have heard the rival contentions, perused the material on record and duly considered facts of the case in the light of the applicable legal position. 6. While dealing with rectification of mistakes under section 154, it is necessary to bear in mind inherently limited scope of this provision. This aspect of the ma .....

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was not justified in going into that question.......an error which has to be established by a long-drawn process of reasoning on points where there may conceivably be two opinions cannot be said to be an error apparent on the face of the record. A decision on debatable point of law is not a mistake apparent from the record........ 7. Let us, in this light, revert to the facts of this case. 8. As for the point as to whether the tax is required to be deducted tax at source from payments made by a .....

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ection 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. 9. As for the second point on which the impugned rectification order .....

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ed rectification order, thus is that since the claim itself was made on 20.1.2005, the period of delay in issuing refund from the period 1/4/2002 to 20/01/2005, being attributable to the assessee, is required to be excluded . The Assessing Officer has proceeded on the basis that mere making of belated claim under section 10(23G), even if that be so, is reason enough to hold that the delay in issuance of refund, to that extent, is attributable to the assessee. Section 244A(2) as it then stood, ho .....

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hing more the fact of delayed claim under section 10(23G) which has been put against the assessee to deny the interest under section 244A, for the period of the beginning of the relevant assessment year till the date of making the claim by way of a letter, but then it is not the delay in claim but the delay in the proceedings resulting in refund which are crucial factor in declining in the interest under section 244A. There is nothing on record to suggest that the proceedings leading to the refu .....

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asons, not in the control of the assessee, which could result in or trigger the delay in admissibility of claim. The delay in making of the claim by itself , without anything else, cannot lead to the conclusion that the delay is attributed to the assessee. Let us not forget that it is not a case of declining interest levy under section 244A on merits but it is a case in which not declining the interest under section 244A for this period has been treated as a mistake apparent on record, which, by .....

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