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Case Law Details

Case Name : NGC Network Asia LLC Vs DDIT- International Tax (ITAT Mumbai)
Appeal Number : ITA No. 8671/Mum/2004
Date of Judgement/Order : 30/12/2020
Related Assessment Year : 2000-01
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NGC Network Asia LLC Vs DDIT- International Tax (ITAT Mumbai)

One of The ground raised by the assessee is with regard to charging of interest u/s.234B of the Act. We find that assessee is a non-resident whose entire income is subject to deduction of tax at source u/s.195 of the Act. Accordingly, the assessee had pleaded that it is not liable to pay advance tax and consequently not liable to pay any interest u/s.234B of the Act which was not appreciated by the ld. AO and the ld. CIT(A). We find that the issue in dispute is squarely addressed by the decision of the Hon’ble Jurisdictional High Court in the case of DCIT vs. NGC Network Asia LLC reported in 313 ITR 187 (Bom) wherein the Hon’ble Court had held that when the duty is cast on the payer to deduct and pay the tax at source and on payer’s failure to do so, interest u/s.234B of the Act cannot be imposed on the payee assessee. Moreover, we also find that the proviso to Section 209(1) of the Act, which has been heavily relied upon by the ld. DR at the time of hearing was inserted in the statute only w.e.f. A.Y.2013-14 onwards and the same is not applicable for the year under consideration. Accordingly, we hold that no interest u/s.234B of the Act could be charged in the hands of the assessee as the entire income is subject to deduction of tax at source. Accordingly, the ground No.4 raised by the assessee is allowed.

FULL TEXT OF THE ORDER OF ITAT MUMBAI

This appeal in ITA No.8671/Mum/2004 for A.Y.2000-01 arises out of the order by the ld. Commissioner of Income Tax (Appeals)-XXXIII, Mumbai in appeal No.CIT(A)XXXIII/Intl.Tax Rg 3/1-N/03-4 dated 12/08/2004 (ld. CIT(A) in short) against the order of assessment passed u/s.143(3)of the Income Tax Act, 1961 (hereinafter referred to as Act) dated 26/02/2003 by the ld. Asst. Director of Income Tax (International Taxation)-2(2), Mumbai (hereinafter referred to as ld. AO).

ITA No.3834/Mum/2007 A.Y.2001-02 (Assessee Appeal)

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