NEO SPORTS BROADCAST P. LTD, MUMBAI V. DDIT (IT) RG 4(2), MUMBAI

ITA 7649/MUM/2010

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1852 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 2 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: L
• Next Hearing Date: 21-01-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 04-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ALOK BAIRAGRA
• Keywords: Double taxation relief
• Section: 244A; 5(2); 147; 263; 144; 154; 11

Judgement Text

ITA NO.7649 OF 2010 NEO SPORTS BROADCAST P LTD MUMB AI PAGE 1 OF 10 IN THE INCOME TAX APPELLATE TRIBUNAL 'L' BENCH, MUMBAI BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA, JUDICIAL MEM BER ITA NO. 7649/MUM/2010 (ASSESSMENT YEAR: 2008-09) NEO SPORTS BROADCAST PVT. LTD NIMBUS CENTRE, OBEROI COMPLEX, ANDHERI (W) MUMBAI 400053 PAN: AACCN 2854 Q VS. DDIT (IT) RANGE 4(2) GROUND FLOOR, SCINDIA HOUSE, BALLAARD ESTATE MUMBAI (APPELLANT) (RESPONDENT) ASSESSEE BY: SHRI ALOK BAIRAGRA DEPARTMENT BY: MS. NEERAJA PRADHAN, DR DATE OF HEARING: 21/01/2013 DATE OF PRONOUNCEMENT: 30/01/2013 O R D E R PER B. RAMAKOTAIAH, A.M. THIS IS AN APPEAL BY ASSESSEE AGAINST THE ORDE R OF THE CIT(A)11, MUMBAI, DATED 06-09-2010. THE ONLY ISSUE IN THIS APPEAL IS WITH REFERENCE TO NON GRANTING OF INTEREST UNDER SECTION 244A CONSEQUENT TO THE REFUND RECEIVED GIVING EFFECT TO THE ORDER OF THE CIT(A), PURSUANT TO THE ORDER UNDER SECTION 251/195 OF THE I.T. ACT. 2. ASSESSEE FILED AN APPLICATION ON 12.03. 2008 UNDER SECTION 195(2) FOR LOWER OR NIL DEDUCTION OF INCOME TAX ON PAYMENTS TO BE MADE TO M/S NIMBUS SPORTS INTERNATIONAL PTE. LTD WH O IS HAVING THE RIGHTS OVER THE TELECAST OF CRICKET MATCHES. IT WAS THE CONTENTION OF ASSESSEE THAT THE PAYMENTS TO BE MADE ON ACCOUNT OF LIVE MATCHES ARE NOT IN THE NATURE OF ROYALTY AND THER EFORE, THE SAME IS NOT TAXABLE IN INDIA. IT WAS CONTENDED THAT BROADCA ST OF LIVE MATCHES CONSEQUENTLY DOES NOT ENTITLE ANY BROADCAST ING RIGHT TO ASSESSEE AND THEREFORE NO INCOME IS BEING ACCRUED O R ARISEN IN INDIA TO THE PAYEE AS THE AGREEMENT HAS BEEN SIGNED OUTS IDE INDIA AND ITA NO.7649 OF 2010 NEO SPORTS BROADCAST P LTD MUMB AI PAGE 2 OF 10 MATCHES WILL BE PLAYED OUTSIDE INDIA. AO DID NOT AG REE WITH THE CONTENTION AND DIRECTED ASSESSEE TO DEDUCT THE TAX AT 11.72% (INCLUSIVE OF SURCHARGES) ON THE PAYMENT BEING MADE TO M/S NIMBUS SPORTS INTERNATIONAL PTE LTD. THE MATTER WAS CARRIED IN APPEAL BEFORE THE CIT (A), WHO DECIDED IN FAVOUR OF ASSESSEE VIDE THE ORDER DATED 29.09.2008 WHEREIN IT WAS HELD THAT NO TAXES ARE DEDUCTIBLE ON ACCOUNT OF AMOUNTS REMITTED TO THE RE CIPIENT OUTSIDE INDIA AS THE SAME WAS NOT TAXABLE IN INDIA. CONSEQU ENT TO THAT A REFUND OF ` 2,65,11,410 WAS ISSUED BY AO TO THE ASSESSEE COMPAN Y WITHOUT ANY INTEREST UNDER SECTION 244A. ASSESSEE F ILED AN APPLICATION UNDER SECTION 154 OF THE ACT ON 10.10.2 009 REQUESTING AO TO RECTIFY AND GRANT INTEREST UNDER SECTION 244A OF THE I.T. ACT ON THE AMOUNT OF TDS DEPOSITED UNDER SECTION 195(2) OF THE I.T. ACT. AO HELD THAT THERE IS NO PROVISION IN THE INCOME TA X ACT FOR ALLOWING THE INTEREST ON THE TDS DEDUCTED. ASSESSEE PREFERRED APPEAL BEFORE THE CIT (A) FOR GRANT OF INTEREST UND ER SECTION 244A FROM 31.03.2008 I.E. ON THE DATE OF DEDUCTION/PAYME NT TO THE GOVERNMENT TILL THE DATE OF GRANTING OF REFUND I.E. 30.07.2009. THE LEARNED CIT (A) RELYING ON THE BOARD CIRCULAR NO.00 7 OF 2007 DATED 23.10.2007 HELD THAT THE AMOUNT OF TDS CANNOT BE CO NSIDERED AS TAX AND IN VIEW OF THAT NO INTEREST UNDER SECTION 244A IS ADMISSIBLE IN ACCORDANCE WITH THE CIRCULAR. THE CIT (A) FURTHER OPINED THAT THE ASSESSEE COMPANY COULD NOT SHOW WHE THER THE TDS WAS DEPOSITED VOLUNTARILY OR UNDER PROTEST WHEN THE ORDER UNDER SECTION 195(2) WAS PASSED. IN THE RESULT THE CLAIM OF ASSESSEE WAS REJECTED BY THE CIT (A). 3. THE LEARNED COUNSEL SUBMITTED THAT INTERES T UNDER SECTION 244A WAS ELIGIBLE TO ASSESSEE AS THE REFUND WAS GRA NTED CONSEQUENT TO THE ORDER OF THE CIT (A) AND AO RAISED THE DEMAN D BY THE ORDER UNDER SECTION 195(2). HE PLACED THE ORDER OF AO DAT ED 28.03.2008 ON RECORD. FURTHER, HE SUBMITTED THAT SIMILAR ISSUE WAS DECIDED IN FAVOUR OF ASSESSEE BY THE COORDINATE BENCHES IN THE CASE OF DDIT ITA NO.7649 OF 2010 NEO SPORTS BROADCAST P LTD MUMB AI PAGE 3 OF 10 (INTERNATIONAL TAXATION) VS. STAR CRUISES (INDIA) T RAVEL SERVICES PVT LTD (MUM) IN ITA NO.6498 & 6500/MUM/06 2009-TIOL-3 51. HE ALSO FURTHER PLACED RELIANCE ON THE DECISION OF THE TATA CHEMICALS LTD VS. DCIT (ITAT MUMBAI) 16 SOT 481 AND IN THE CA SE OF ADIT (IT) VS. TAJ TV LTD IN ITA NO.413/MUM/2008 DATED28.01.20 11. 4. IN REPLY, THE LEARNED DR RELIED ON THE ORD ERS OF THE AUTHORITIES AND PLACED RELIANCE ON THE ORDERS OF THE COORDINATE BENCH IN THE CASE OF GODREJ INDUSTRIES LTD, 8 SOT 417 (MUM). 5. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUSED THE BOARD CIRCULAR, ORDERS OF THE AUTHORITIES AND THE D ECISIONS OF THE COORDINATE BENCH. FIRST OF ALL, IT IS TO BE NOTED T HAT ASSESSEE WAS DIRECTED TO DEDUCT TAX AT 11.72% VIDE ORDER UNDER S ECTION 195(2) DATED, 28.03.2008 AND ACCORDINGLY ASSESSEE DEDUCTED THE SAID TAX. ASSESSEE DID NOT CLAIM ANY REFUND IN PURSUANCE TO T HE CIRCULAR DIRECTLY BUT HAS CONTESTED THE MATTER ON THE DIRECT IONS SO GIVEN BY AO. THE CIT (A) ANALYZING THE FACTUAL SITUATION AND LEGAL POSITION HELD THAT PAYMENT FOR THE LIVE TELECAST OF CRICKET MATCHES DOES NOT COME IN THE NATURE OF ROYALTY AND ACCORDINGLY THE AMOUNT WAS NOT REQUIRED TO BE DEDUCTED AND DIRECTED THE TAX PAID T O BE REFUNDED. THEREFORE, THE OBSERVATIONS OF THE CIT (A)/RELIANCE BY HIM ON THE BOARD CIRCULAR NO.007 OF 2007 DATED 23.10.2007 IS N OT CORRECT IN THE SENSE THAT IT IS NOT A DIRECT REFUND CLAIM PLAC ING RELIANCE ON THE BOARD CIRCULAR AND THE CIRCUMSTANCES STATED THEREIN . HAD ASSESSEE DEDUCTED THE TAX ON ITS OWN VOLUNTARILY AND CLAIMED THE BENEFIT OF THE CIRCULAR FOR ISSUANCE OF THE REFUND, THEN THE C IRCULAR MAY BE APPLICABLE. IN THE CIRCULAR IT WAS CLARIFIED THAT T HE AMOUNT DEDUCTED CANNOT BE CONSIDERED AS TAX AND NO INTEREST UNDE R SECTION 244A IS ADMISSIBLE ON REFUNDS TO BE GRANTED IN ACCORDANCE W ITH THIS CIRCULAR (007 OF 2007) OR ON THE REFUNDS ALREADY GR ANTED IN ACCORDANCE WITH THE CIRCULAR NOS. 769 OR 790. SINCE THE REFUND WAS GRANTED CONSEQUENT TO THE ORDER OF THE CIT (A), REL YING ON THE ABOVE ITA NO.7649 OF 2010 NEO SPORTS BROADCAST P LTD MUMB AI PAGE 4 OF 10 CIRCULAR WHERE CLAIM OF DIRECT REFUND WAS CONSIDERE D BY THE CBDT IS NOT CORRECT. 6. THE LEARNED DR RELIED ON THE DECISION OF THE GODREJ INDUSTRIES LTD (SUPRA), WHEREIN ASSESSEE VOLUNTARILY DEDUCTED THE TAX AND SOUGHT INTEREST ON REFUND UNDER SECTION 244A, IT WA S HELD THAT REFUND OF INTEREST UNDER SECTION 244A CAN BE ALLOWE D IN THOSE CASES WHERE NOTICE OF DEMAND HAS BEEN ISSUED UNDER SECTIO N 156 AND TAX WAS PAID IN EXCESS OF SUCH DEMAND. IN THAT CASE SIN CE NO NOTICE OF DEMAND UNDER SECTION 156 WAS ISSUED, IT WAS HELD TH AT NO INTEREST COULD BE ALLOWED. HOWEVER, IN THE VERY SAME ORDER T HE COORDINATE BENCH ALSO CONSIDERED THE DECISION OF THE TATA ENGI NEERING & LOCOMOTIVES VS. DCIT 92 ITD 111 (MUM) AND ROYAL AIR WAYS LTD VS. ADD. DIT, 98 TTJ 665 DISTINGUISHING THOSE DECISIONS FOR THE REASON THAT AO INSISTED UPON THE PAYMENT OF TDS BY ASSESSE E. THEREFORE, THE ABOVE DECISION DOES NOT APPLY TO THE FACTS OF T HE CASE AS ASSESSEE PAID THE TAX CONSEQUENT TO AN ORDER U/S 19 5 BY AO AND DID NOT CLAIM DIRECT REFUND AS PER THE BOARD CIRCUL AR. THE REFUND AROSE CONSEQUENT TO AN ORDER OF CIT(A) IN AN APPEAL . 7. IN FACT, THIS ISSUE WAS ALREADY CONSIDERED BY THE DECISION OF THE DDIT (INTERNATIONAL TAXATION) VS. STAR CRUISES (INDIA) TRAVEL SERVICES PVT. LTD (MUM) IN ITA NO.6498 & 6500/MUM/0 6-2009- TIOL-351 WHEREIN IT WAS ELABORATELY DISCUSSED AS UN DER: 6. IT WOULD BE RELEVANT TO REFER TO SECTION 240 OF THE ACT. SECTION 240 OF THE INCOME TAX ACT, 1961 READS AS UN DER:- SEC 240: WHERE, AS A RESULT OF ANY ORDER PASSED IN APPEAL OR OTHER PROCEEDINGS UNDER THIS ACT, REFUND OF ANY AMOUNT BECOMES DUE TO THE ASSESSEE, THE (ASSESSING) OFFICER SHALL, EXCEPT AS OTHERWISE PROVIDED IN THIS ACT, REFUND THE AMOUNT TO THE ASSESSEE WITHOUT HIS HAVIN G TO MAKE ANY CLAIM IN THAT BEHALF: [PROVIDED THAT WHERE, BY THE ORDER AFORESAID,- (A) AN ASSESSMENT IS SET ASIDE OR CANCELLED AND AN ORDE R OF FRESH ASSESSMENT IS DIRECTED TO BE MADE, THE REFUND, IF ANY, SHALL BECOME DUE ONLY ON THE MAKING OF ITA NO.7649 OF 2010 NEO SPORTS BROADCAST P LTD MUMB AI PAGE 5 OF 10 SUCH FRESH ASSESSMENT; (B) THE ASSESSMENT IS ANNULLED, THE REFUND SHALL BE COME DUE ONLY OF THE AMOUNT, IF ANY, OF THE TAX PAID. IN EXCESS OF THE TAX CHARGEABLE ON THE TOTAL INCOME RETURNED BY THE ASSESSEE.)' 7. SECTION 244A WHICH PROVIDES FOR GRANT OF INTE REST TO THE ASSESSEE READS AS UNDER:- '244A. (1) [WHERE REFUND OF ANY AMOUNT BECOMES DUE TO THE ASSESSEE UNDER THIS ACT], HE SHALL, SUBJECT TO THE PROVISIONS OF THIS SECTION, BE ENTITLED TO RECEIVE, IN ADDITION TO THE SAID AMOUNT, SIMPLE INTEREST THEREON CALCULA TED IN THE FOLLOWING MANNER, NAMELY:- (A) WHERE THE REFUND IS OUT OF ANY TAX [PAID U/S 11 5WJ OR [COLLECTED AT SOUSE U/S 206C OR] PAID BY WAY OF ADV ANCE TAX OR TREATED AS PAID U/S 199, DURING THE FINANCIA L YEAR IMMEDIATELY PRECEDING THE ASSESSMENT YEAR, SUCH INT EREST SHALL BE CALCULATED AT THE RATE OF [ONE-HALF PER CE NT] FOR EVERY MONTH OR PART OF A MONTH COMPRISED IN THE PER IOD FROM THE 1 ST DAY OF APRIL OF THE ASSESSMENT YEAR TO THE- DATE ON WHICH THE REFUND IS GRANTED: PROVIDED THAT NO INTEREST SHALL BE PAYABLE IF THE A MOUNT OF REFUND IS LESS THAN TEN PER CENT OF THE TAX AS DETE RMINED [UNDER [SUB-SECTION (1) OF SECTION 115WE OR] SUB-SE CTION (1) OF SECTION 143 OR] ON REGULAR ASSESSMENT. (B) IN ANY OTHER CASE, SUCH INTEREST SHALL BE CALCULATED AT THE RATE OF 79 [ONE-HALF PER CENT] FOR EVERY MONTH OR PART OF A MONTH COMPRISED IN THE PERIOD OR PERIODS FROM THE DATE, OR AS THE CASE MAY BE, DATES OF PAYMENT OF THE TAX OR PENALTY TO THE DATE ON WHICH THE REFUND IS GRANTED. EXPLANATION- FOR THE PURPOSE OF THIS CLAUSE, 'DATE OF PAY MENT OF TAX OR PENALTY' MEANS THE DATE ON AND FRO-M WHICH THE AMOUNT OF TAX OR PENALTY SPECIFIED IN THE NOTICE OF DEMAND ISSUED U/S 156 IS PAID EXCESS OF SUCH DEMAND. (2) IF THE' PROCEEDINGS RESULTING IN THE REFUND ARE DEL AYED FOR REASONS ATTRIBUTABLE TO -THE- ASSESSEE, WHETHER WHOLLY OR IN PART, THE PERIOD OF THE DELAY SO ATTRIBUTABLE TO HIM SHALL BE EXCLUDED FROM THE PERIOD FOR WHICH INTERES T IS PAYABLE, AND WHERE ANY QUESTION ARISES AS TO THE PE RIOD TO BE EXCLUDED, IT SHALL BE DECIDED BY THE CHIEF COMMISSIONER OR COMMISSIONER WHOSE DECISION THEREON SHALL BE FINAL. ITA NO.7649 OF 2010 NEO SPORTS BROADCAST P LTD MUMB AI PAGE 6 OF 10 (3) WHERE, AS A RESULT OF AN ORDER UNDER 80) SUB-SE CTION (3) OF SECTION 115WE OR SECTION 115WF OR SECTION 115WG OR 8L[SUB-SECTION (3) OF SECTION 143 OR SECTION 144 OR ] SECTION 147 OR SECTION 154 OR SECTION 155 OR SECTION 250 OR SECTION 254 OR SECTION 260 OR SECTION 262 OR SECTION 263 OR SECTION 264 OR AN ORDER OF THE SETTLEMENT COMMISSION UNDER SUB- SECTION (4) OF SECTION 2450, THE AMOUNT ON WHICH IN TEREST WAS PAYABLE UNDER SUB-SECTION (1) HAS BEEN INCREASE D OR REDUCED, AS THE CASE MAY BE, THE INTEREST SHALL BE INCREASED OR REDUCED ACCORDINGLY, AND IN A CASE WHE RE THE INTEREST IS REDUCED, THE AO SHALL SERVE ON THE ASSE SSEE A NOTICE OF DEMAND IN THE PRESCRIBED FORM SPECIFYING THE AMOUNT OF THE EXCESS INTEREST PAID AND REQUIRING HI M 'TO PAY SUCH AMOUNT; AND SUCH NOTICE OF DEMAND SHALL BE DEEMED TO BE A NOTICE U/S 156 AND THE PROVISIONS OF THIS ACT SHALL APPLY ACCORDINGLY. (4) THE PROVISIONS OF THIS SECTION SHALL APPLY IN R ESPECT OF ASSESSMENTS FOR THE ASSESSMENT YEAR COMMENCING ON T HE 1ST DAY OF APRIL, 1989, AND SUBSEQUENT ASSESSMENT YEARS.]' 8. IN THE PRESENT CASE, THE ASSESSEE HAS BEEN FOUND ENTITLED TO REFUND IN ACCORDANCE WITH THE PROVISION S OF THE ACT AND SECTION 244A PROVIDES FOR PAYMENT OF INTEREST ON THE AMOUNT OF REFUND WHICH BECOMES DUE TO ASSESSEE UNDER THE ACT. SINCE THE REFUND HAD HAD BECOME DUE TO THE ASSESSEE UNDER THE ACT, WE HAVE NO DOUBT IN OUR MIND TO HOLD THAT THE ASSESSEE IS ENTITLED TO INTEREST U/S 244A. NEEDLESS TO MENTION THAT THE INTEREST SO GRANTED IS SUBJECT TO MODIFICATION, AS A RESULT OF ANY APPELLATE ORDERS OR ORDERS, OF THE HI GHER AUTHORITIES IN ACCORDANCE WITH LAW. THE CBDT CIRCUL AR NOS. 769 & 790 DATED 6.8.98 & 20.4.2000 RESPECTIVELY ARE INAPPLICABLE TO THE FACTS OF THIS CASE. THE SAID CIRCULARS HAVE BEEN ISSUED TO BENEFIT THE PERSONS WHO HAD VOLUNTARILY DEDUCTED THE TAX AT SOURCE WITHOUT ANY ORDER FROM THE AO AND THE REFUND NOT BECOMING DUE UNDER .THE PROVISIONS OF THE ACT. IN THE PRESENT CASE, THE DY. DIRECTOR OF INCOME TAX PASSED TWO ORDERS U/S 201 READ WITH SECTION 201(LA) AND THE PAYMENT WAS MADE TO THE ASSESSEE ON THE DIRECTION OF THE DY. DIRECTOR IN ACCORDANCE WITH LAW. THIS ISSUE WAS CONSIDERED BY THE MUMBAI B ENCH OF THE TRIBUNAL IN THE CASE OF TATA CHEMICALS LTD. VS. DCIT (2007) 16 SOT 481(BOM). IN THIS CASE IT HAS BEEN HELD BY THE TRIBUNAL AS UNDER: .- ' UNDER THE 'PROVISIONS OF SECTION 195(2}, THE ASSESS EE IS EMPOWERED TO MAKE AN APPLICATION TO THE AO FOR NON- DEDUCTION TAX ON SUCH SUMS REMITTED TO A NON-RESIDENT WHICH ACCORDIN G TO THE ITA NO.7649 OF 2010 NEO SPORTS BROADCAST P LTD MUMB AI PAGE 7 OF 10 ASSESSEE ARE NOT SUBJECT TO TAX .AT SOURCE. IN VIEW OF THE PROVISIONS OF DTAA BETWEEN THE TWO COUNTRIES UNDER THE SAID SUB-S ECTION (2) OF SECTION 195, THE AO IS EMPOWERED TO DETERMINE SUCH SUMS WHICH ARE DEDUCTIBLE OUT OF REMITTANCE TO BE SENT TO THE RECI PIENT AND ONLY 'AFTER DEDUCTION AND PAYMENT OF SUCH SUMS, THE BALANCE AMO UNT IS TO BE REMITTED TO THE NON- RESIDENT. IN THE INSTANT CASE, IN COMPLIANCE OF THE ORDER OF THE AO, THE ASSESSEE HAD DEDUCTED THE TAX AT SOURCE BEFORE REMITTING THE AMOUNTS TO GERMANY AND DENMARK . THE ORDER U/S 195(2) IS APPEALABLE UNDER THE PROVISIONS OF SECTION 248. SECTION 248. SECTION 248 CLEARLY PROVIDES THAT AFTER DEDUCTION AND PAYMENT OF TAX IN ACCORDANCE WITH THE PROVISION S OF SECTIONS 195 AND 200, IF THE ASSESSEE DENIES HIS LIABILITY T O MAKE SUCH DEDUCTION, HE IS EMPOWERED TO FILE AN APPEAL BEFORE THE CIT(A) IN ORD.ER TO G.ET A DECLARATION THAT HE IS NO LIABLE T O MAKE SUCH DEDUCTION. IN THE INSTANT CASE, CIT(A) GRANTED RELI EF TO THE ASSESSEE HOLDING THAT NO TAX WAS DEDUCTIBLE OUT OF THE REMIT TANCES MADE TO DENMARK AND GERMANY AND DIRECTED THE AO TO REFUND T HE AMOUNT OF TAX SO DEPOSITED BY IT. FURTHER THE PROVISIONS OF SECTION 240 VERY CATEGORI CALLY PROVIDED THAT WHERE AN ORDER IS PASSED IN APPEAL, OR OTHER PROCEE DINGS UNDER THE ACT, THE AO IS DUTY BOUND TO REFUND AMOUNT DUE TO T HE ASSESSEE EVEN WITHOUT THE ASSESSEE MAKING ANY CLAIM IN THAT BEHALF. IN ADDITION TO THE REFUND OF AMOUNT DUE, THE ASSESSEE IS ALSO ENTITLED TO INTEREST ON SUCH REFUND UNDER THE PROVISIONS 'OF SE CTION 244A. ONCE THE PROVISIONS OF SECTION 240 ARE APPLICABLE TO THE AMOUNT PAID BY THE ASSESSEE AS TAX, THEN THE PROVISIONS OF SECTION 244 A WILL APPLY THEREAFTER. IN THE INSTANT CASE, THE REFUND BECAME DUE TO THE A SSESSEE PURSUANT TO THE ORDER OF THE CIT(A); WHEREIN IT WAS HELD THA T ASSESSEE WAS NOT TO DEDUCT TAX AT SOURCE ON THE AMOUNTS REMITTED TO THE RECIPIENT OUTSIDE INDIA. THE REFUND OF MONEY PAID BY THE ASSE SSEE BECAME DUE TO IT ON THE PASSING OF THE APPELLATE ORDER IN APPEAL AS PER THE PROVISIONS OF SECTION 240. THE ASSESSEE WAS NOT TO MAKE ANY CLAIM' IN THIS REGARD FOR THE ISSUE OF REFUND AS PER THE P ROVISIONS OF SECTION - 240, WHICH PROVIDES THAT REFUND IS AUTOMATICALLY DU E TO THE ASSESSEE AFTER THE ORDER IS PASSED IN APPEAL OR ANY OTHER PR OCEEDINGS UNDER THE ACT. SECTION 244A (1) FURTHER' PROVIDES THAT' I N ADDITION TO REFUND OF ANY AMOUNT BECOMING DUE TO THE ASSESSEE' UNDER T HE ACT, THE ASSESSEE IS ALSO ENTITLED TO' RECEIVE INTEREST ON SUCH REFUNDS WHICH HAVE BECOME DUE TO THE ASSESSEE UNDER THE ACT. THE REFUND IN THE INSTANT CASE WAS DETERMINED ON ACCOUNT OF THE ORDER GIVING EFFECT TO THE ORDER IN APPEAL PASSED BY THE CIT(A). CLAUSE {A) OF SECTION 244A(1) COVERS THE INSTANCE O F PAYMENT OF SUMS OF MONEY BY WAY OF ADVANCE- TAX OR TDS. CLAUSE (B) OF SECTION 244A( 1) COVERS ALL OTHER CASES WHEREIN REFUND HAS BECOME DUE TO THE ASSESSEE. THE PHRASE USED IN CLAUSE (B) OF SECT ION 244A( 1), IS 'IN ANY OTHER CASE', THE EXPLANATION TO CLAUSE (B) OF SECTION 244A(1) ITA NO.7649 OF 2010 NEO SPORTS BROADCAST P LTD MUMB AI PAGE 8 OF 10 FURTHER PROVIDES THAT 'DATE OF PAYMENT OF TAX OR PENALTY' MEANS THE DATE ON WHICH THE AMOUNT OR TAX OR PENALTY SPECIFIED IN THE NOTICE OF DEMAND ISSUED U/S 156 IS PAID. THE EXPLANATION ATTACHED TO THE MAIN SECTION DOES NOT IN ANY WAY OBLITERATE THE MEANING OF THE S ECTION. SECTION 156 TALKS OF SERVICE OF A NOTICE OF DEMAND IN THE PRESCRIBED FORM WHERE ANY TAX, INTEREST, PENALTY, FINE OR ANY OTHER ' SUM IS PAYABLE IN CONSEQUENCE OF ANY ORDER PASSED UNDER THIS ACT. THE ORDER U/S 195(2) HAD BEEN PASSED UNDER THE PROVISIONS OF THE ACT AND ANY NOTICE OF DEMAND, FOR THE SAID AMOUNT DUE PURSUANT TO ORDER PASSED U/S 19 5(2) WAS BOUND TO BE ISSUED U/S 156. THE PROVISIONS OF CLAUSE(B) OF SECT ION 244A( 1) VERY CATEGORICALLY PROVIDE INTEREST, ON ANY REFUND, ARIS ING BECAUSE OF PAYMENT OF TAX 'IN ANY OTHER CASE' WHICH SHALL INCLUDE THE PAY MENT MADE BY ASSESSEE PURSUANT TO ORDER U/S 195(2), BY WHICH THE AO REQUI SITIONED THE ASSESSEE TO DEDUCT THE TAX AND DEPOSIT THE SAME IN TREASURY BEF ORE REMITTING THE AMOUNTS DUE TO THE RECIPIENTS OUTSIDE INDIA. ACCORD INGLY, THE ASSESSEE WAS ENTITLED TO RECEIVE INTEREST U/S 244A(1)(B) ON AMOU NT DEPOSITED PURSUANT TO ORDER PASSED U/S 195(2), WHICH IN TURN HAD BECOME D UE TO THE ASSESSEE BECAUSE OF THE ORDER PASSED IN APPEAL AGAINST THE S AID ORDER U/S 195(2). THE BOARD BY WAY OF CIRCULAR NO. 769 DATED 6.8.98 A ND CIRCULAR NO. 790 DATED 2.0.42.000 PROVIDED THAT THE ASSESSEE SHALL B E ENTITLED TO REFUND OF SUCH PAYMENTS MADE U/S 195, BUT THE AMOUNT PAID- IN TO THE GOVERNMENT ACCOUNT IN SUCH CASES IS NO LONGER TAX. IN VIEW OF THIS. NO, INTEREST U/S 244A IS ADMISSIBLE ON REFUNDS TO BE GRANTED IN ACCORDANC E WITH THESE CIRCULARS. THE CIRCUMSTANCES MENTIONED IN THE AFORESAID CIRCULARS WERE DIFFERENT FROM THE FACTS AND CIRCUMSTANCES OF THE INSTANT CASE. IN THE CIRCUMSTANCES REFERRED TO IN THE CIRCULARS, THE TAX WAS DEPOSITED BY THE PERSONS ON THEIR OWN AND VOLUNTARILY WITHOUT ANY DEMAND BEING MADE BY THE AO OR ANY OTHER AUTHORITY UNDER THE ACT. BUT, I N THE INSTANT CASE, THE AMOUNT WAS PAID PURSUANT TO AN ORDER PASSED BY THE AO UNDER THE PROVISIONS OF SECTION 195(2) AGAINST WHICH THE ASSE SSEE FILED AN APPEAL BEFORE THE CIT (A). IN THE ORDER GIVING APPEAL EFFECT TO THE ORDER OF THE CIT (A), REFUND BECOME DUE TO THE ASSESSEE WHICH IN FACT ARO SE BECAUSE OF THE PROVISIONS OF SECTION 240. THE PROVISIONS OF THE ACT PREVAIL OVER THE INSTRUCTIONS ISSUED BY THE BOARD BY WAY OF CSDT CIRCULARS. THE SUPREME COURT IN SANDVIK ASIA LTD. VS. CIT (2006) 280 ITR 643 = (2006-TIOL-07-SC-IT ) HAS HELD THAT WHERE EXCESS AMOUNT OF TAX IS COLLECTED FROM ASSESSEE, THE REVENUE MUST COMPENSATE ASSESSEE AND THE COMPENSATION IN, THE INSTANT CASE WAS BY WAYS OF INTEREST U/S 244A FOR THE PERIOD WHEN THE AMOUNT WAS WITHHELD. ACCORDINGLY, AO WAS, TO BE DIRECTED TO ALLOW INTEREST U/S 244A(1)(B) ON THE AMOUNT DUE TO ASSESSEE PURSUANT TO THE ORDER PASSED GIVING EFFECT TO CIT (A)S ORDER IN APPEAL. 9. THE DECISION OF THE TRIBUNAL IN THE CASE OF GODR EJ INDUSTRIES LTD VS. DCIT (SUPRA) IS DISTINGUISHABLE ON FACTS. IN THAT CASE ASSESSEE HAD VOLUNTARILY DEDUCTED THE TAX AT SOURCE AND THERE WAS NO ORDER PASSED BY AO UNDER SE CTION 201 OR UNDER SECTION 195(2). IN SUCH CASES, THE REF UND IS NOT GRANTED TO THE DEDUCTOR BY VIRTUE OF PROVISIONS OF THE ACT, AS THERE IS NO SUCH PROVISIONS CONTAINED IN THE STATUT E FOR GRANT OF REFUND IN RESPECT OF THE TAX DEDUCTED AT SOURCE TO THE ITA NO.7649 OF 2010 NEO SPORTS BROADCAST P LTD MUMB AI PAGE 9 OF 10 DEDUCTOR, THE TAX HAVING BEEN DEDUCTED VOLUNTARILY AT SOURCE AND DEPOSITED WITH THE GOVT. IN THE PRESENT CASE AS SESSEE DID NOT DEDUCT THE TAX VOLUNTARILY. THE DY. DIRECTO R OF INCOME TAX (INTERNATIONAL TAXATION (2)(1) HAS HELD ASSESSE E TO BE AN ASSESSEE IN DEFAULT AND THE SAID ORDER WAS CHALLENG ED BY ASSESSEE BEFORE THE CIT (A) UNDER THE ACT. THE CIT (A) ON APPEAL FOUND THE ORDER MADE BY THE DY. DIRECTOR OF INCOME TAX TO BE CONTRARY TO LAW AND ASSESSEE WAS HELD NOT TO BE TREATED AN ASSESSEE IN DEFAULT. IT WAS AS A RESULT OF THE ORDER OF THE CIT (A), ASSESSEE WAS ENTITLED TO REFU ND. THE PAYMENT MADE BY ASSESSEE WAS ON DEMAND UNDER THE PROVISIONS OF THE ACT AND REFUND ALSO BECAUSE DUE T O ASSESSEE UNDER THE PROVISIONS OF THE ACT. THEREFORE , IT CANNOT BE SAID THAT THE REFUND WAS NOT GRANTED TO ASSESSEE UNDER THE ACT. THE DECISIONS OF THE CIT (A) TO THIS EFFEC T IN OUR VIEW, DOES NOT WARRANT ANY INTERFERENCE. THE APPEALS OF T HE REVENUE ARE ACCORDINGLY DISMISSED. 8. AS CAN BE SEEN FROM THE ABOVE, THE DECISIO N IN THE CASE OF TATA CHEMICALS LTD VS. DCIT 16 SOT 481 AND THE DECI SION OF THE GODREJ INDUSTRIES LTD 8 SOT 417 WERE ALSO CONSIDERED. SIMILAR VIEW WAS ALSO TAKEN BY THE COORDINATE BENCH IN THE CASE OF ADIT VS. TAJ TV LTD (SUPRA) WHEREIN ON SIMILAR FACTS IT WAS HELD AS UNDER: 3.19. IN VIEW OF THE DECISION OF THE HON'BLE SUPRE ME COURT IN THE CASE OF ITO VS. DELHI DEVELOPMENT AUTH ORITY (SUPRA) AND THE DECISION OF A COORDINATE BENCH OF T HIS TRIBUNAL IN THE CASE OF TATA CHEMICALS (SUPRA), WE HOLD THAT ONCE THE REFUND BECOMES DUE AS PER THE PROVISI ONS OF THIS ACT, THE INTEREST IS PAYABLE AS PER THE PRO VISIONS OF SECTION 244A AND ACCORDINGLY ASSESSEE IS ENTITLE D FOR THE INTEREST. HENCE WE DO NOT FIND ANY ERROR OR ILL EGALITY IN THE ORDER OF THE LEARNED CIT (A). WE CONFIRM THE SAME. 9. THE PRINCIPLES LAID DOWN IN THE ABOVE D ECISIONS ARE THAT IN A CASE WHERE ASSESSEE VOLUNTARILY DEDUCTED TAX AND CLAIMED REFUND DIRECTLY, GRANT OF INTEREST UNDER SECTION 244A MAY NOT ARISE AND THE BOARD CIRCULARS ON THIS ISSUE ARE APPLICABLE, WHERE AS IN A CASE WHERE AO DEMAND THE TAX / INTEREST CONSEQUENT TO AN ORDER UNDER SECTION 195/201 OR 201A, AND THE REFUND AROSE CONSE QUENT TO THE ORDERS OF THE CIT (A)/ITAT, THEN INTEREST UNDER SEC TION 244A HAS TO BE GRANTED. IN THE PRESENT CASE, THE ASSESSEE HAS BEEN FOUND ENTITLED TO REFUND IN ACCORDANCE WITH THE PROVISION S OF THE ACT ITA NO.7649 OF 2010 NEO SPORTS BROADCAST P LTD MUMB AI PAGE 10 OF 10 AND SECTION 244A PROVIDES FOR PAYMENT OF INTEREST O N THE AMOUNT OF REFUND WHICH BECOMES DUE TO ASSESSEE UNDE R THE ACT. WE HAVE NO DOUBT IN OUR MIND TO HOLD THAT THE ASSESSEE IS ENTITLED TO INTEREST U/S 244A. NEEDLESS TO MENTION THAT THE INTEREST SO GRANTED IS SUBJECT TO MODIFICATION, AS A RESULT OF ANY APPELLATE ORDER OR ORDERS OF THE HIGHER AUTHORITIES IN ACCORDANCE WITH LAW. WE THEREFORE, SET ASIDE THE ORDERS OF AO AND THE CIT (A) ON THIS ISSUE AND DIRECT AO TO CALCULAT E THE INTEREST FROM THE PERIOD FROM 31.03.2008 TO 30.07.2009 AS PER THE PROVISIONS OF THE LAW AND GRANT THE SAME TO ASSESSEE. 10. IN THE RESULT APPEAL FILED BY ASSESSE E IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH JANUARY, 2013 SD/- SD/- (AMIT SHUKLA) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED 30 TH JANUARY, 2013. VNODAN/SPS COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. THE DR, L BENCH, ITAT, MUMBAI BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI