Income Tax Appellate Tribunal - Mumbai
Msm Satellite (Singapore) P. Ltd, ... vs Department Of Income Tax on 28 October, 2009
IN THE INCOME TAX APPELLATE TRIBUNAL
MUMBAI BENCHES, 'B', MUMBAI
BEFORE SHRI T.R.SOOD, ACCOUNTANT MEMBER AND
SHRI VIJAY PAL RAO, JUDICIAL MEMBER
ITA No. 505,509 and 510/Mum/2010
(Assessment year 2007-08)
DDIT(IT)4(1),
133 Sci ndia House,
Ballard pier,
Mumbai-400038 .... Appellant
Vs
MSM Satellite (Singapore) P Ltd,
C/o S R Batliboi and co.
CAS Express Tower,
18 t h floor, Nariman Point
Mumbai-400021
PAN:AABCS9229H .. Respondent
ITA No. 506, 507 and 508/Mum/2010
(Assessment year 2006-07)
DDIT(IT)4(1), .... Appellant
V/s
MSM Satellite (Singapore) P Ltd, ...Respondent
Assessee by : Shri R R Vora
Revenue by : Shri Naresh K Balodia
O R D E R
PER BENCH These appeals by the revenue are directed against the different orders of CIT(A) dated 28.10.2009 arising from the 2 IT A No . 505 ,50 9 and 51 0 /Mum /2 01 0 An d 50 6, 50 7 and 50 8 /Mu m /2010 different orders passed by the AO u/s 251/195 of the Incom e Tax Act for granting the ref und in respect of tax deducted b y the assessee on account of payment on various dates to Global Cricket V Corporation Pvt Limited (In short GCC) for the assessm ent years 2006-07 and 2007-08.
2. The revenue has raises followi ng common grounds in these appeals :
"1. On the facts and circumstances of the case and in law, the ld. CIT(A) erred in holding that the assessee is entitled to interest on refund in accordance with secti on 244A of the IT Act without appreciating that under the provisi ons of the Act, refund can only be made to the earner of the income and in the present case refund was being made to the deductor of the tax and not to the deductee or whose behalf tax had been deducted at source:
2. On the facts and circumstances of the case and in law, the ld. CIT(A) had f ailed to appreciate that it is only under the beneficial circular no.7 of 2007 dated 23.10.2007 of CBDT applicable in the present case under refund to a deductor of tax u/s 195 could be allowed and even this beneficial circular does not provide for payment of interest u/s 244A to the deductor of tax"
3. Brief facts of the case leading to the controversy are that the assessee is a Singapore based company, engaged in the business of acquiri ng tel evision programs, motion pictures and spores events and exhibiting the same on its television channels from Singapore. During the period from March 2002 to October 2003 under the agreement entered into with
3 IT A No . 505 ,50 9 and 51 0 /Mum /2 01 0 An d 50 6, 50 7 and 50 8 /Mu m /2010 GCC(resident of Singapore), the assessee made payments for obtaining a right to broadcast various cricket matches in various countries including India. The assessee did not withheld any t ax from the payments made to CGG. The revenue by passing an order dated 19.2.2004 held that the paym ents made to GCC are in the nature of "Royalty" and hence liable to tax in India, therefore, held the assessee as defaulter for non deduction of tax at source.
4. On appeal, the CIT(A) held that the payments by the assessee to GCC are not liable to tax in India.
5. On further appeal this Tribunal has upheld the order of the CIT(A).
6. In pursuance of the Tribunal order, the assessee applied to the AO for nil withholding tax certificate u/s 195(2). The AO directed the assessee to withhold tax @10.96% in respect of paym ents made to GCC. The assessee accordingl y deduced the tax at source.
7. Aggrieved by the order of the AO, the matter carried to CIT(A) and the CIT(A) by following its own order for th e assessm ent year 2003-04 held that the assessee is not liable 4 IT A No . 505 ,50 9 and 51 0 /Mum /2 01 0 An d 50 6, 50 7 and 50 8 /Mu m /2010 to withhold tax at source in respect of paym ents made to GCC.
8. In second round before the Tribunal, this Tribunal has confirmed the order passed by the learned CIT(A).
9. W hile giving effect to the first appellate order, th e assessee was given refund of the taxes withhold but without any interest as per the provisions of section 244A. Against this order the assessee appealed before the CIT(A) who held that the assessee is entitl ed to get interest on refund u/s 244A.
10. Before us, the learned DR has submitted that the amount deducted b y the assessee u/s 195 and deposited with the department was voluntaril y and not as per an y assessment order or demand notice u/s 156. Since the refund was made as per the administrative order by way of administrative measure and in view of the circular no. 7/2007 dated 23.10.2007, the same cannot be treated as refund of tax u/s 237 or u/s 240 of the Act. The learned DR has ref erred and relied upon the circular no.769 dated 6.08.1998 and circular no.790 dated 20.4.2000 and 7/ 2007 dated 23.10.2007 and submitted that the refund has been granted to the assessee who is a responsible for deduction of tax at source for the 5 IT A No . 505 ,50 9 and 51 0 /Mum /2 01 0 An d 50 6, 50 7 and 50 8 /Mu m /2010 paym ent to the non-resident only under the circul ars and not under an y provisions of the Income Tax act. He has referred the paragraph 3 of circular no.769 dated 6.08.1998 and submitted that the ref und to the person who is responsible for deducting the tax at source is independent of the provisions of the Act and with prior approval of the Chief Commissioner of Income Tax concerned. Similarly, the learned DR has referred paragraph 6 of the circular no.790 dated 20.4.2000 and submitted that the amount paid into government account in such cases no longer tax and therefore no interest u/s 244A is admissible on the refund to be granted in accordance with this circular. The learned DR has then referred Clause "f " of circular no.7 of 2007 dated 23.10.2007 and submitted that ref und to the person making the payment under section 195 has been allowed when that income does not accrued to the non-resi dent, the amount paid into the government account in such cases is no longer tax. Therefore no interest u/s 244A is admissible on the refund to be granted in accordance with this circular No.769 or circular no. 790. Thus, the learned DR has submitted that when there was no notice of dem and and paym ent made u/s 195 which was found as the incom e does not accrued to the non-resi dent or the income accruing no tax due then the amount so pai d into the government account is not a tax and therefore no interest can 6 IT A No . 505 ,50 9 and 51 0 /Mum /2 01 0 An d 50 6, 50 7 and 50 8 /Mu m /2010 be allowed u/s 244A He has relied upon the decision of this Tribunal in the case of Godrej Industries ltd V/s DCIT reported in 8 SOT 417(Mumbai) and the decision of the hon. Madhya Pradesh High Court in the case of Universal Cables ltd V/s CIT reported in (2009) 26 DTR (MP) 98..
11. On the other hand, the learned AR has submitted that the decisions relied upon by the learned DR are distinguishable on facts. He submitted that in those cases the tax was deposited voluntarily by the tax deductor and then refund was granted. He submitted that the Hon. High Court and the Tribunal held that the assessee is not entitled to get interest u/s 244A because the tax was deducted and deposite d voluntarily. The learned AR has further submitted that the tax was paid by the assessee in view of the order passed b y the AO u/s 195(2) and not voluntarily and on this count, these decisions support the case of the assessee. Referring to th e decision of the Mum bai Bench of this Tri bunal in the case of Star Cruise (2009-TIOL-351-ITAT-Mumbai), it is submitted that this Tribunal has distinguished the facts of the case of Godrej Industries ltd (supra) on the ground that the tax paid pursuance to the order u/s 195(2) is not voluntary payment of tax but collected as per the provisions of law. Hence, refund of taxes paid pursuant to order u/s 195(2) are as per the 7 IT A No . 505 ,50 9 and 51 0 /Mum /2 01 0 An d 50 6, 50 7 and 50 8 /Mu m /2010 provisions of the Act and interest will be allowed on such refund u/s 244A(1)(b).
12. The learned AR submitted that the provisions of section 240 provides that where an order is passed in appeal, or ot her proceedings under the Act, the AO is dut y bound to refund the amount due to the aseseee even without the assessee making any claim in that behalf. He also submitted that the assessee is also entitled to interest on such refund under th e provisions of section 244A. Once the provisions of section 240 are applicable to the amount paid b y the assessee as tax, the provisions of section 244A applies aut omatically.
13. The learned AR submitted that the provisions of section 240 states that refund is due to assessee and has not make any distinction between the tax deductor or recipient of income. Thus, when the order u/s 195(2) is passed treating MSMS as "assessee" then it is entitled to refund u/s 240 which is correctly granted by the AO. Therefore, the assessee is entitled for interest u/s 244A(1)(b) of the Act.
14. The learned AR submitted that the provisions of section 244A(1) further provides that in addition to refund of an y am ount becoming due to the assessee under the Act, the 8 IT A No . 505 ,50 9 and 51 0 /Mum /2 01 0 An d 50 6, 50 7 and 50 8 /Mu m /2010 assessee is also entitled to receive interest on such refund which have become due to the assessee under the Act. He submitted that the refund in the instant case was determined on account of the order giving effect to the order passed b y the CIT(A).
15. The learned AR submitted that clause (a) of section 244A(1) covers the instances of pa ym ent of sums of money b y way of advance tax or TDS, clause (b) of section 244(1) covers all other case wherein refund has become due to the assessee. He submitted that the phrase used in clause (b) of section 244A(1) is "in any other" where assessee's case falls. Similarly, order u/s 195(2) is sufficient to raise tax demand on assessee and separate notice u/s 156 is not necessary to make payment obligatory by the Assessee. He submitted that the contention about notice of demand u/s 156 was raised before the Tribunal while discussing the case of Tata Chemical Ltd V/s DCIT (16 SOT 481) (Mum Trib), he inviting our attention to the findings of the Tribunal's order paragraph 22 and submitted that the Tribunal observed that "The order u/s 195(2) of the Act has been passed under the provisions of the Act and any notice of demand for the said amount due pursuant to order passed under section 195(2) is bound to be issued u/s 156 of the IT Act'. In any event, if assessee does not comply by order u/s 195(2), it would be treated as aseseee 9 IT A No . 505 ,50 9 and 51 0 /Mum /2 01 0 An d 50 6, 50 7 and 50 8 /Mu m /2010 in default u/s 201(1) of the Act and would be liable to pay with interest.
16. The learned AR submitted that as per the CBDT circulars and the decision of this Tribunal in various case, it is held that the aseseee is entitled to interest on refund as per the provisions of Income Tax act, 1961. Therefore, he submitted that the assessee is entitled to receive interest under secti on 244A(1)(b) on amount deposited pursuant to order passed under secti on 195(2), which in-turn had becom e due to the assess because of the order passed in appeal against t he sai d order u/s 195(2). In support of his contention, he relied upon the following decisions :
i) ITO V/s Delhi Development Authority (2001) 252 ITR 772 (SC)
ii) M/s Star Cruises (India) Travel Services P Ltd Vs DDIT, Mumbai (Dated: March 24, 2009) . 2009-TIOL-351-ITAT-MUM.
iii) Addl DIT(IT) v.M/s Reliance Infocomm Ltd.
[2009-TIOL-. 602-ITAT-MUM].
iv) Tata Chemical Ltd V/s DCIT (16 SOT 481) (Mum Trib),
v) Bharat Petroleum Corporation Ltd. Vs. JDIT (IT), 14 SOT 307.
vii) Sandvik Asia Ltd, v. ... CIT, (2006) 280 ITR 643 (SC)
viii) CIT V/s Goodyear India Ltd-(249 ITR 527(Del HC)
ix) CIT V/s Narendra Doshi 254 ITR 606 (SC)
x) Addl. CIT V/s Grindwell Norton ltd 1032 TTJ 265 (Bom Trib)
xi) DCIT V/s State Bank of Travencor 106 ITD 308 (coachTrib)
17. W e have considered the rival contentions and rel evant record. W e have also given our thought to the various case laws relied upon by either parties. W e find that the assessee company made pa yments during the financial years relevant to 10 IT A No . 505 ,50 9 and 51 0 /Mum /2 01 0 An d 50 6, 50 7 and 50 8 /Mu m /2010 the assessm ent years under consideration. Since in the earlier year i.e. for the AY 2003-04, the assessee was treated as assessee in default for deduction of TDS by an order dated 19.02.2004 passed under section 201(1) and 201(1A) of the Act and though the said issue for the assessment years 2003- 04, 2006-07 and 2008-09 was subsequentl y decided by this Tribunal in favour of the assessee vide order dated 25.06.2010 which was reported in 43 DTR 311, the assessee moved an application u/s 195(2) bef ore the AO for certificate in respect of payment to be made to the GCC is not t axable in India. The Asstt. Directors of Incom e Tax (International Taxati on) vide its order dated 27.04.2007 passed under section 195 of the IT Act directed the assessee to wit hhold tax at the rate of 10.96% on the payment to GCC. Therefore, the assessee has withhold the paym ent not voluntarily but in pursuance to the order of the ADIT of Incom e Tax (International Taxation) u/s
195. So far as the circulars referred by the learned DR are concerned the Board has decided the ref und to be made to the person responsible for deducting the tax at source in the cases where (a) after the deposit of tax deduced at sourc e under section 195, the contract is cancelled and no remittance is required to be made to the foreign collaborator, (b) th e remittance is duly made to the foreign collaborator, but the contract is canceled and the foreign collaborator returns the 11 IT A No . 505 ,50 9 and 51 0 /Mum /2 01 0 An d 50 6, 50 7 and 50 8 /Mu m /2010 remitted amount to the person responsible for deduction tax at sources, (c) the tax deducted at source is f ound to be in excess of tax deductible for any other reason; and (d) in the cases where the tax is deducted at sources u/s 195 and paid in one assessm ent year and remittance to the foreign collaborator is made and/or refunded to the Indian company following cancellation of the contract in another assessment year. Thus, in the cases where the income does not accrued to the non-resident the amount deducted as tax under section 195 and paid to the credit of the government belongs to the deductor Under these circumstances, the Board has found that since the refund was t o be given only on a claim being made by the non-residence whereas the income were not income as accrued to the non-residence due to th e cancellation of the contract the am ount deposited to the credit of the governm ent account u/s 195 cannot be said to be taxed and accordingly decided that this am ount can be refunded to the deductor of the tax with the prior approval of the Chief Commissioner of Income Tax concerned. Thus, the circular referred and relied upon by the learned DR deals with the situation where the tax deducted on the remittance made t o the non-resident but finally no income has accrued to the non- residence due to the cancellation of the contract. In the case in hand, the deduction of tax is not voluntaril y on the part of 12 IT A No . 505 ,50 9 and 51 0 /Mum /2 01 0 An d 50 6, 50 7 and 50 8 /Mu m /2010 the assessee but as a result of the order passed by the AO u/s 195 of the Act. Theref ore, it is not a case of cancellation of contract and non accrual of income in the hands of the non- residence subsequent to the deduction of tax by the assessee on its own. Therefore, none of these circular would help the case of the revenue in the peculiar facts and circumstances of the case of the assessee in hand. Moreover, when the deduction was made by the assessee in pursuance of th e order of the AO passed u/s 195 and the refund was made as a result of the order passed by the e CIT(A), therefore, the refund is granted as a result of the order passed in the appeals and falls under the provisions of section 240. Thus, when the refund becomes due under the provisions of IT Act then the circulars cannot override the provisions of the statue.
18. In the case of Godrej Industries ltd V/s DCIT (supra), this Tribunal has held that for allowing the interest u/s 244A there must be a notice of demand u/s 156 and the tax must have been paid in excess of dem and. Since the deduction in the said case was voluntary and not as per any demand or orders of the tax aut horities, therefore, this tribunal has decided that no interest is payable u/s 244A in view of the Board's circular no. 769 and 790. Similarly, in the case of Universal Cables ltd V/s CIT (supra), the hon. Madhya Pradesh High Court has observed t hat the assessee was not 13 IT A No . 505 ,50 9 and 51 0 /Mum /2 01 0 An d 50 6, 50 7 and 50 8 /Mu m /2010 liable to deduct the tax under the Act and it di d so on its own on erroneous impression. It was held that the assessee does not become the deemed assessee and t he refund is not under the Act. Accordingl y,. The provisions of section 244A does not get attracted. Since the f acts in those cases and the f acts in the case in hand are distinguishabl e specificall y when the tax was deducted by t he assessee in the case in hand as a result of the order passed under section 195 ;and not voluntarily or erroneously, and refund was made as per the order of CIT(A), therefore, the decision relied upon by the revenue are not applicable to the facts of the present case.
19. W e find that this Tribunal i n the case of DDIT (IT) V/s M/s Star Cruises (India) Travel Services Pvt ltd reported in 2009-TIOL-351-ITAT-Mum dated 24.3.2009 has decided this issue in favour of the assessee in paragraphs 8 and 9 as under :
"8. In the present case, the assessee has been found entitled to refund in accordance with the provisions of the Act and section 244A provides for payment of interest on the amount of refund which becomes due to the assessee under the act. Since the refund 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 under section 244A. Needless to mention that the interest so granted is subject to modification, as a result of any appellate orders or orders of the higher authorities in accordance with law. The CBDT circular 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 14 IT A No . 505 ,50 9 and 51 0 /Mum /2 01 0 An d 50 6, 50 7 and 50 8 /Mu m /2010 persons who had voluntarily deducted the tax at source without any order from the Assessing Officer and the refund not becoming due under the provisions of the Act. In the present case, the Dy. Director of Income Tax has passed two orders under section 201 read with section 201(1A) 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 Bench of the Tribunal in the case of Tata Chemicals Ltd. Vs. DCIT., (2007) 16 SOT 481(Mum). In this case, it has been held by the Tribunal as under:-
"Under the provisions of section 195(2), the assessee is empowered to make an application to the Assessing Officer for non-deduction of tax on such sums remitted to a non- resident which according to the assessee are not subject to tax at source. In view of the provisions of DTAA between the two countries, under the said sub-section (2) of section 195, the Assessing Officer is empowered to determine such sums which are deductible out of remittance to be sent to the recipient and only after deduction and payment of such sums, the balance amount is to be remitted to the non- resident. In the instant case, in compliance of the order of the Assessing Officer, the assessee had deducted the tax at source before remitting the amounts to Germany and Denmark.
The order under section 195(2) is appealable under the provisions of section 248. Section 248 clearly provides that after deduction and payment of tax in accordance with the provisions of sections 195 and 200, if the assessee denies his liability to make such deduction, he is empowered to file an appeal before the CIT(A) in order to get a declaration that he is not liable to make such deduction. In the instant case, CIT(A) granted relief to the assessee holding that no tax was deductible out of the remittances made to Denmark and Germany and directed the Assessing Officer to refund the amount of tax so deposited by it.
Further the provisions of section 240 very categorically provide that where an order is passed in appeal, or other proceedings under the Act, the Assessing Officer is duty bound to refund amount due to the 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 section 244A. Once the provisions of section 240 are applicable to the amount paid by the assessee as tax, then the provisions of section 244A will apply thereafter.
In the instant case, the refund became due to the assessee pursuant to the order of the CIT(A), wherein it was held that 15 IT A No . 505 ,50 9 and 51 0 /Mum /2 01 0 An d 50 6, 50 7 and 50 8 /Mu m /2010 assessee was not to deduct tax at source on the amounts remitted to the recipient outside India. The refund of money paid by the assessee 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 provisions of section 240, which provides that refund is automatically due to the assessee after the order is passed in appeal or any other proceedings under the Act. Section 244A(1) further provides that in addition to refund of any amount becoming due to the assessee under the 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 instances of 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 section 244A(1) is 'in any other case' . The Explanation to clause (b) of section 244A(1) further provides that 'date of payment of tax or penalty' means the date on which the amount of tax or penalty specified in the notice of demand issued under section 156 is paid. The Explanation attached to the main section does not in any way obliterate the meaning of the section. 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 under section 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 under section 195(2) was bound to be issued under section
156. The provisions of clause (b) of section 244A(1) very categorically provide interest on any refund arising because of payment of tax 'in any other case' , which shall include the payment made by the assessee pursuant to order under section 195(2), by which the Assessing Officer requisitioned the assessee to deduct the tax and deposit the same in treasury before remitting the amounts due to the recipients outside India. Accordingly, the assessee was entitled to receive interest under section 244A(1)(b) on amounts deposited pursuant to order passed under section 195(2), which in-turn had become due to the assessee because of the order passed in appeal against the said order under section 195(2).
16 IT A No . 505 ,50 9 and 51 0 /Mum /2 01 0 An d 50 6, 50 7 and 50 8 /Mu m /2010 The Board by way of Circular No.769 dated 6.8.98 and circular no.790 dated 20.04.2000 provided that the assessee shall be entitled to refund of such payments made under section 195, but the amount paid into the Government account in such cases is no longer tax. In view of this, no interest under section 244A is admissible on refunds to be granted in accordance 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 Assessing Officer or any other authority under the Act. But, in the instant case, the amount was paid pursuant to an order passed by the Assessing Officer under the provisions of section 195(2) against which the assessee filed an appeal before the CIT(A). In the order giving appeal effect to the order of the CIT(A), refund became due to the assessee which in fact arose because of the provisions of section 240. The provisions of the Act prevail over the instructions issued by the Board by way of CBDT circulars. The Supreme Court in Sandvik Asia Ltd. Vs. CIT., (2006) 280 ITR 643 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 way of interest under section 244A for the period when the amount was withheld. Accordingly, the Assessing Officer was to be directed to allow the interest under section 244A(1)(b) on the amount due to the 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 M/s.Godrej Industries Ltd. Vs. DCIT(supra) is distinguishable on facts. In that case, the assessee had voluntarily deducted the tax at source and there was no order passed by the Assessing Officer under section 201 or under section 195(2). In such cases, the refund is not granted to the deductor by virtue of provisions of the Act, as there is no such provision contained in the statute for grant of refund in respect of the tax deducted at source to the deductor - the tax having been deducted voluntarily at source and deposited with the Government. In the present case, the assessee did not deduct the tax voluntarily. The Deputy Director of Income Tax, International Taxation 2(1) has held the assessee to be an assessee in default and the said order was 17 IT A No . 505 ,50 9 and 51 0 /Mum /2 01 0 An d 50 6, 50 7 and 50 8 /Mu m /2010 challenged by the 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 the assessee was held not to be treated an assessee in default. It was as a result of the order of the CIT(A), the assessee was entitled to refund. The payment made by the assessee was on demand under the provisions of the Act and refund also became due to the assessee under the provisions of the Act. Therefore, it cannot be said that the refund was not granted to the assessee under the Act. The decision of the CIT(A), to this effect, in our view, does not warrant any interference. The appeals of the Revenue are accordingly dismissed.
10. The cross objections of the assessee are merely supporting the decision of the CIT(A) and no fresh relief has been claimed. These are accordingly dismissed as infructuous.
20. It is clear from the order of this Tri bunal in case (supra) that this Tribunal has decided this issue after considering the decision in the case of Godrej Industries ltd V/ s DCIT (supra) and held that the paym ent made by the assessee on demand under the provisions of Act and the refund also becom e due to the assessee under the provisions of Act. W hen it has been held that the refund become due as per the provisions of Act , the provisions of section 244A are applicable on the refund made to assessee and accordingl y the assessee is entitled for interest u/s 244A.
21. W e further note that in the assessee's own case in ITA No.4975/Mum/2005 vide order dated 26.9.2009 this Tribunal in paragraph 5 and 6 held as under :
18 IT A No . 505 ,50 9 and 51 0 /Mum /2 01 0 An d 50 6, 50 7 and 50 8 /Mu m /2010 "5. In the case of Delhi Development Authority(supra), identical issue has been considered by the Apex court and it is held as under :
"In the case in hand, as indicated earlier, the direction to refund the amount has been made in appellate proceedings before the tribunal. The amount is to be refunded to the assessee. It cannot be said that the "refundee" will not be an assessee only for the reason that actually no assessment proceedings had taken place. It would be pertinent to refer to the provision contained under section 201 which clearly provides that if the principal officer or the company liable to deduct the income-tax at source fails to do so, he shall be deemed to be assessee in default in respect of the tax. The definition of the word "assessee" as contained under clause (7) of section 2 reads as under :
(7) "assessee" means a person by whom [any tax] or any other sum of money is payable under this Act, and includes--
(a) every person in respect of whom any proceeding under this Act has been taken for the assessment of his income [or assessment of fringe benefits] or of the income of any other person in respect of which he is assessable, or of the loss sustained by him or by such other person, or of the amount of refund due to him or to such other person ;
(b) every person who is deemed to be an
assessee under any provision of this Act ;
(c) every person who is deemed to be an
assessee in default under any provision of this Act ;
From the above provision, it is clear that term ' assessee" i ncludes actual assessees as well as deemed assessees under the provisions of the Act. It is , therefore, not correct to contend that unless there are actual assessment proceedings pertaining to any person, he cannot be considered to be an assessee. In the present case DDA was considered to be liable to deduct the tax at source. It failed to do so. Hence order under section 201(1) and 201(1A) was passed 19 IT A No . 505 ,50 9 and 51 0 /Mum /2 01 0 An d 50 6, 50 7 and 50 8 /Mu m /2010 raising t he demand and amount of tax was paid. The order of refund was passed in appellate proceedings under the Act attracting section 240. Certain decisions were cited at the Bar to show the meaning of the words "assessee" and "assessment " and different stages of the assessment proceedings need not be dealt with in view of clear definition of the word "assessee" under the Act as quoted above"
6. In our opi nion, answer to the arguments of the ld. DR I found in the decision of the Apex Court in the case of Delhi Development Authority (supra0. The issue is squarely covered in favour of the assessee by the decision of the Apex Court in Delhi Development Authority (supra). We find no reason to interfere with the order of the ld. CIT(A) and the same is accordingly confirmed"
22. In view of the above discussions as well as t he orders of co-ordinate Benches of this Tribunal, we decide this issue in favour of the assessee. The order of the CIT(A) is upheld.
23. In the result, the appeal of the revenue is dismissed. Order pronounced in the open court on 26. 11.2010 Sd sd (T.R.SOOD) (VIJAY PAL RAO) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai, Dated 26 th Nov 2010 SRL:221110 20 IT A No . 505 ,50 9 and 51 0 /Mum /2 01 0 An d 50 6, 50 7 and 50 8 /Mu m /2010 copy to:
1. Appellant
2. Respondent
3. CIT Concerned
4. CIT(A) concerned
5. DR concerned Bench BY ORDER True cop y ASSTT. REGISTRAR, ITAT, MUMBAI