In absence of liability to pay advance tax, Interest U/s. 234B not applicable

DCIT Vs. M/s Master card International Inc (ITAT Delhi)

Solitary issue raised by the Revenue is against the decision of the Ld. CIT(A) in holding that interest u/s.234B is not leviable in respect of payments to the non-resident assessee, being subject to tax deduction at source u/s. 195 of the Act. We find that the issue has been decided in favour of the assessee by the Hon’ble Delhi High Court, in earlier assessment years, in assesee’s own case. Further, the Ld. CIT(A) in assessee’s own case for AY 2005-06 and 2008-09 in Appeal nos. 160 and 162/10-11 vide order dated 14.2.2013, decided the issue in favour of the assessee by adjudicating the issue in dispute, vide para no. 4 of his order as under:-

“Ground of Appeal No. 5 is regarding levying of interest u/s. 234B of the Act.

The appellant has submitted that since tax is deductible u/s. 195 on all payments made to it, there is no advance tax payable u/s. 208 r.w.s. 209(1)9d) of the Act. In the absence of any liability to pay advance tax, the provisions of section 234B are not applicable. The appellant has relied upon following case laws:

– DIT vs. Jacobs Civil Incorporated, 330 ITR 578 (Del).

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