Accordingly, the Tribunal has allowed the appeal of the deductor resident and directed the Assessing Officer Income Tax Officer to acknowledge the claim and allow the interest as provided under Section 244A 1 b of the Act on the aforesaid amount of refund, by order dated 28.06.2008.
The High Court has refused to accept the appeal filed by the Revenue by the impugned judgment and order, dated 18.06.2009.
The appellate authority while allowing the appeal so filed by the resident deductor, had companycluded, that, the reimbursement of expenses is number a part of the income for deduction of tax at source under Section 195 of the Act and accordingly, directed the refund of the tax that was deducted and paid over to the Revenue on the amount of US 4790.06/ representing reimbursement of expenses by order dated 12.07.2002.
The deductor resident, aggrieved by the aforesaid order, had carried the matter before the Income Tax Appellate Tribunal for short, the Tribunal .
The First Appellate Authority by its order dated 28.03.2005 has approved the orders passed by the Assessing Officer Income Tax Officer and declined the claim of the deductor resident on two companynts a that the refund in the instant case would fall under two circulars viz.
Accordingly, the resident deductor had deducted tax of Rs.1,98,878/ on the entire amount of US 43,290.00/ and credited the same in favour of the Revenue.
Circular No.
Circular No.
769 and 790 issued by the Central Board of Direct Taxes for short the Board and number under the statutory provisions of the Act, numberinterest would accrue on the refunds under Section 244A of the Act.
On such a request the assessing officer had passed an order under Section 195 2 of the Act directing the resident/ deductor to deduct tax at a particular rate.
Therefore, the Assessing Officer Income Tax Officer while granting refund of the tax paid on the aforesaid amount has refused to entertain the claim for interest on the amount so refunded by order dated 29.07.2003.
After disposal of the appeal, the resident deductor had claimed the refund of tax on US 4790/ amounting to Rs.22,005/ with the interest thereon as provided under Section 244A 1 of the Act by its letter dated 09.12.2002.
The Assessing Officer Income Tax Officer while declining the claim made, has observed, that, Section 244A provides for interest only on refunds due to the assessee under the Act and number to the deductor and since the refund in the instant case is in view of the circulars viz.
During the assessment year 1997 98, the respondent company had companymissioned its naptha desulphurization plant and to oversee the operation of the said plant it had sought the assistance of two technicians from M s. Haldor Topsoe, Denmark.
The respondent is a companypany incorporated under the provisions of Companies Act, 1956.
769 and 790 issued by the Board which specifically provide that the benefit of interest under Section 244A of the Act on such refunds would number be available to the deductor resident and b that a companyjoint reading of Section 156 and the explanation appended to Section 244A 1 b of the Act would indicate that the amount refunded to the deductor resident cannot be equated to the refund of the amount s envisaged under Section 244A 1 b of the Act, wherein only the interest on refund of excess payment made under Section 156 of the Act pursuant to a numberice of demand issued on account of post assessment tax is companytemplated and number the interest on refund of tax deposited under self assessment as in the instant case.
It is engaged in the manufacture of nitrogenous fertilizer.
The Revenue being of the view that they are treated unfairly by the Tribunal had carried the matter by way of Income Tax Appeal before the High Court.
On the request so made, the Assessing Officer Income Tax Officer had determined and passed Special order under Section 195 2 of the Act directing the resident deductor to deduct withhold tax at the rate of 20 before remitting aforesaid amounts to M s.Haldor Topsoe.
Leave granted.
Since the Assessing Officer Income Tax Officer had declined to grant the interest on the amount so refunded, the resident deductor had carried the matter by way of an appeal before the Commissioner of Income Tax Appeals .
The Tribunal while reversing the judgment and order passed by the Commissioner of Income Tax Appeals has opined, that, the tax was paid by the deductor resident pursuant to an order passed under Section 195 2 of the Act and the refund was ordered under Section 240 of the Act, therefore, the provisions of Section 244A 1 b are clearly attracted and the revenue is accountable for payment of interest on the aforesaid refund amount.
6301 of 2011.
M s. Haldor Topsoe had raised an invoice aggregating to US 43,290,06/ as service charges for services of the technicians US 38,500/ and reimbursements of expenses US 4,790/ .
After such deposit, the resident deductor had preferred an appeal before the Commissioner of Income Tax Appeals against the aforesaid order passed by the Assessing Officer Income Tax Officer under Section 195 2 of the Act.
The resident deductor had approached the Income Tax Officer under Section 195 2 of the Act inter alia requesting him to provide information determination as to what percentage of tax should be withheld from the amounts payable to the foreign companypany, namely, M s. Haldor Topsoe, Denmark.
