TMI Blog2020 (9) TMI 873X X X X Extracts X X X X X X X X Extracts X X X X ..... company any other sum chargeable under the provisions of the Act at the time of credit of such income to the account of the payee. It is axiomatic that assessee was entitled to, in its computation of its advance tax liability to take a tax credit of the amount, which was deductible or collectible irrespective of fact whether the amount was actually deducted or collected. Under the aforesaid provision, the assessee was entitled to tax credit of an amount that was deductible even if it was not actually deducted. Therefore, in order to remove the anomaly in law, the parliament inserted a proviso to Section 209(1) by Finance Act, 2012 with effect from 01.04.2012. In the light of legal position as it existed for the relevant Assessment Yea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in CIT VS.L ANJUM MH GHASWALA (2001) 252 ITR 1 (SC) where it was held that Section 234B of the Act is mandatory? (ii) Whether the Tribunal was correct in reading down Section 234B of the Act by holding that the same is applicable to Indian residents and not to non residents when the validity has been upheld by this Hon'ble court by holding that the provisions is only compensatory in nature for depriving the revenue in payment of advance tax? 2. I.T.A.No.34/2012 was admitted by a bench of this court, vide order dated 05.07.2012 on the following substantial questions of law: (i) Whether the Tribunal was correct in holding that the assessee being a non resident is not liable to pay advance tax and consequently no interest un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t ₹ 4,51,65,006/-. The TDS amount of ₹ 14,27,92,521/- was deducted and in respect of short fall in payment of advance tax, the Assessing Officer levied a sum of ₹ 1,38,98,565/- as interest under Section 234B of the Act. Thereafter, an order of rectification was passed under Section 154 of the Act on 12.05.2009 as there was a mistake regarding the returned income and computation of TDS and consequential interest. The assessee thereupon approached the Commissioner of Income Tax (Appeals), who by an order dated 30.03.2010 inter alia held that computation of interest under Section 234B is required to be re computed and the matter was remitted. The assessee thereupon filed an appeal before the Income Tax Appellate Tribunal (her ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ory. In this connection, reliance has been placed decision of the Supreme Court in 'COMMISSIONER OF INCOME-TAX VS. ANJUM M.H.GHASWALA', (2001) 119 TAXMAN 352 (SC). It is also urged that the finding recorded by the Tribunal is contrary to law laid down by Supreme Court in PALAM GAS SERVICE supra. 6. On the other hand, learned counsel for the assesses submitted that the proposition laid down in by the Supreme Court in PALAM GAS SERVICE supra does not apply to Section 209 of the Act and the word 'deductible' cannot be read as 'deducted'. It is also pointed out that there is no charge of levy for interest and therefore, the proviso to Section 209(1)(d) was inserted with effect from 01.04.2012, which is prospective in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 as so reduced shall be the advance tax payable. 8. From perusal of aforesaid provision, it is axiomatic that assessee was entitled to, in its computation of its advance tax liability to take a tax credit of the amount, which was deductible or collectible irrespective of fact whether the amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at source from such payments, the non resident is not absolved from payment of taxes thereupon and non resident is liable to pay tax and the question of payment of advance tax would not arise. Therefore, it would not be permissible for the revenue to charge any interest under Section 243B of the Act. 10. The Supreme Court in PALAM GAS SERVICE supra was dealing with Section 40(a)(ia) of the Act and was dealing with the question as to whether the provisions of Section 40(a)(ia) of the Act would be attracted when the amount was not payable to a contractor or sub contractor but had been actually paid. In the aforesaid context, the Supreme Court held that the word 'payable' used in Section 40(a)(ia) of the Act would include the wor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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