DCIT (IT) 3(3)(1), MUMBAI V. QUINTILES INC., MUMBAI

ITA 1497/MUM/2016

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 8193 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 17-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R P MEENA
• Assessee Lawyers: URVI A ME HTA
• Section: 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D, MUMBAI BEFORE SHRI P K BANSAL, VICE PRESIDENT & SHRI AMARJIT SINGH, JUDICIAL MEMBER ITA NO.1497/MUM/2016 ASSESSMENT YEAR : 2012-13 DCIT (IT) - 3(3)(1) MUMBAI VS. QUINTILES INC.. C/O DELOITTE HASKINS & SELLS,CA, TOWER 3, 27 TH -32 ND FLOOR, INDIA BULLS FINANCE CENTRE, ELPHINSTONE MILL COMPOUND, MUMBAI 400 013 PAN AAACQ2008D (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI R P MEENA RESPONDENT BY : MS URVI A MEHTA DATE OF HEARING : 13. 11 .2017 DATE OF PRONOUNCEMENT : 27 . 11 .2017 O R D E R PER P K BANSAL, VICE-PRESIDENT: THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST T HE ORDER OF THE DRP-2, MUMBAI, DATED 14.12.2015, FOR A.Y. 2012-13 I N WHICH DIRECTIONS WERE ISSUED U/S. 144C(5) OF THE INCOME TAX ACT, 1961, BY TAKING THE FOLLOWING EFFECTIVE GROUNDS OF APPEAL: 1 WHETHER ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. DRP WAS JUSTIFIED IN HOLDING THAT THE A SSESSEE COMPANY IS NOT LIABLE TO INTEREST U/S. 234B OF THE ACT, DES PITE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF ALKATEL LUC ENT USA INC. VS. DCIT ITA NO.1497/MUM/2016 QUINTILES INC. 2 2. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y CONSIDERED THE SAME ALONG WITH THE ORDERS OF THE AUTHORITIES BELOW. TH E ONLY ISSUE INVOLVED IN THIS APPEAL RELATES TO LEVY OF INTEREST U/S. 234B OF THE ACT. AFTER HEARING BOTH THE PARTIES, WE NOTED THAT THIS ISSUE IS NO MORE RES IN TEGRA IN VIEW OF THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF DIR ECTOR OF INCOME-TAX (INTERNATIONAL TAXATION) VS. NGC NETWORK ASIA LLC 3 13 ITR 187 (BOM), IN WHICH THE HIGH COURT HAS CLEARLY HELD THAT WHEN A D UTY WAS CAST ON THE PAYER TO DEDUCT THE TAX AT SOURCE, ON FAILURE OF THE PAYE R TO DO SO, NO INTEREST COULD BE IMPOSED ON THE ASSESSEE U/S. 234B. IT IS NOT DE NIED THAT PAYER IN THE IMPUGNED CASE WAS UNDER AN OBLIGATION TO DEDUCT THE TAX AT SOURCE BUT HE HAS NOT DEDUCTED THE TAX AT SOURCE ON THE INCOME ON WHICH ASSESSMENT HAS BEEN MADE IN THE HANDS OF THE ASSESSEE. THE ASSESS ING OFFICER LEVIED INTEREST U/S. 234B AS THE ADVANCE TAX PAID BY THE A SSESSEE INCLUDING THE TDS WAS LESS THAN THE AMOUNT THE ASSESSEE WAS UNDER AN OBLIGATION TO PAY. THE FACT REMAINS THAT THERE WAS FAILURE ON THE PART OF THE ASSESSEE TO PAY ADVANCE TAX ONLY IN RESPECT OF THE INCOME WHICH IS SUBJECT TO DEDUCTION OF TAX AT SOURCE. THUS, INTEREST WAS LEVIED ON THE ASSESS EE TO THE FAILURE OF THE PAYER TO DEDUCT TAX AT SOURCE. 3 THE DECISION OF THE JURISDICTIONAL HIGH COURT IS BINDING ON US. WE, THEREFORE, DO NOT FIND ANY ILLEGALITY OR INFIRMITY IN THE ORDER OF THE DRP ON THE ISSUE. ITA NO.1497/MUM/2016 QUINTILES INC. 3 4. IN THE RESULT, THE APPEAL FILED BY THE REVENUE S TANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH DAY OF NOVEMBER, 2017. SD/- SD/- (AMARJIT SINGH) (P K BANSAL) JUDICIAL MEMBER VICE-PRESIDENT MUMBAI; DATED: 27 TH NOVEMBER, 2017 SA COPY OF THE ORDER FORWARDED TO : 1. THE APP ELL ANT. 2. THE RESPONDENT. 3. T HE CIT(A), MUMBAI 4. THE CIT 5. DR, E BENCH, ITAT, MUMBAI BY ORDER, #TRUE COPY # ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, MUMBAI