By C. N. Vaze
Shailesh Kamdar
Jagdish T. Punjabi
Bhadresh Doshi
Chartered Accountants
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New Page 1
(2010) 126 ITD 275 (Hyd.)
DCIT v. Satyam Computer
Services
A.Ys. 1998-99 & 2005-2006
Dated : 25-4-2008
13.
S. 234B — Amounts paid in foreign countries under DTAA would be treated as
advance tax and not self-assessment tax even for the period before Explanation 1
to S. 234B was introduced.
Facts :
For the relevant assessment
years, the assessee paid certain sums as tax in the USA. The same were claimed
as advance tax in India for availing credit under DTAA. The AO treated the same
as advance tax in the order passed u/s.143(3). Subsequently, as the AO was of
the opinion that the tax paid in the USA should be treated as self-assessment
tax, he issued notices u/s.154 and order u/s.154 was passed considering the
amounts as self-assessment tax. The demand payable and interest amounts were
thus modified. The AO was of the view that the DTAA nowhere mentions that the
tax so paid should be treated as advance tax.
Held :
(i) The assessee has not
delayed in making payment of tax even though made in the USA. When there is no
default in paying tax, no interest u/s.234B is chargeable.
(ii) Explanation 1 to S.
234B introduced by the Finance Act, 2006 w.e.f. 1-4-2007 covers relief of tax
allowed u/s.90 on account of tax paid in country outside India.
(iii) Relying on decision of the Supreme
Court in the case of Dilip N. Shroff v. JCIT, (2007) 291 ITR 519, the Tribunal
observed that the object of Explanation is to explain the meaning and clarify
any vagueness of main enactment. It cannot, in any way, interfere with or
change the enactment or take away a
statutory right.
Hence the said Explanation
is applicable to assessee and the tax paid in the USA has to be treated as
advance tax.
