ORDER

Per Bench

1. These appeals by the revenue are directed against different orders dated 30-7-2007 of CIT(A) for the assessment year 2002-03. The only dispute raised by the revenue in these appeals that on the facts and in the circumstances of the case, CIT(A) was not justified in deleting the interest charged by the Assessing Officer under section 234B of the Income-tax Act. As the issue involved in these appeals is common, all these appeals are being disposed off by a single consolidated order for the sake of convenience.

2. Briefly stated, the facts of the case are that M/s. Pride Foramer SAS a non resident French company had engaged employees of Pride Forasol an associate company, for providing technical services in connection with offshore drilling in India. These technicians were residents of various foreign countries. The Assessing Officer noted that these technicians had been paid salary in excess of the exemption limit under the Income-tax Act. The Assessing Officer therefore, passed an order under section 163(1) read with section 149(3) treating M/s. Pride Foramer SAS as agents of these technicians and issued notice under section 148 to the said concern as a representative assessee of the foreign technicians. In the assessments made, the Assessing Officer assessed the salary as well as the perquisite received by the technicians in the name of M/s. Pride Foramer SAS as representative assessee and since no tax had been deducted at source and no advance tax had been paid, he charged interest under section 234B in each case. In appeal, CIT(A) observed that the entire income of the foreign technicians was liable to deduction of tax at source and therefore, as per the provisions of section 209(1)(d) the tax payable for the purpose of advance tax was required to be reduced by the tax deductible. Since the entire tax payable was tax deductible, there was no advance tax payable by the assessee. Accordingly he directed the Assessing Officer to delete the interest charged under section 234B. Aggrieved by the said decision, the present appeals have been filed by the revenue.

3. Before us, the Ld. CIT DR, Shri Devender Shankar, who appeared on behalf of the revenue, argued that under the provisions of section 191 of the Act, in cases where tax had not been deducted at source, the Income-tax was payable by the assessee direct. These provisions were not overrid- den by the provisions of section 209 and, therefore, once the tax had not been deducted at source, the same was payable as advance tax. He referred to the judgement of Hon'ble High Court of Uttaranchal in case of CIT v. Halliburton Offshore Services Inc. [2004] 271 ITR 395 which is the junsdictional High Court in this case, in which, it was pointed out, the High Court had held that the provisions of section 191 were not overridden by the sections 192, 208 and 209(1)(d). It was therefore argued that unless the tax was actually deducted at source, it could not be excluded from the tax payable for the purpose of computation of advance tax in view of the provisions of section 191 of the Income-tax Act.

3.1 The Ld. A.R. for the assessee on the other hand argued that the section 191 did not override or bar the applicability of sections 192, 208 and 209(1)(d) and it was merely a residuary mode of recovery of tax from the assessee direct. The advance tax was required to be computed as per the provisions of section 209 in terms of which the tax deductible was required to be excluded while computing the advance tax payable. It was also pointed out that the Delhi Bench of the Tribunal in case of Western Geco International Ltd. had specifically examined this aspect in the order dated 21-2-2008 in IT Appeal Nos. 4847 to 4941 (Delhi) of 2007 and held that tax deductible, had to be excluded for the purpose of computation of advance tax. The Tribunal had followed the decision of Special Bench in case of Motorola Inc. v. Dy. CIT [2005] 95 ITD 269 (Delhi) . Referring to the judgment of Hon'ble High Court of Uttaranchal in case of Halliburton Offshore Services Inc. (supra), it was pointed out that though the High Court had observed that the provisions of section 191 were not overridden by the sections 192, 208 and 209, the High Court ultimately did not uphold the imposition of interest under section 234B.

3.2 In reply, the Ld. CIT DR pointed out that in the earlier decisions in case of Motorola Inc. (supra ) and other cases, provisions of section 191 had not been considered. In view of the judgment of Hon'ble High Court of Uttaranchal in case of Halliburton Offshore Inc. (supra) in which it was clearly held that the provisions of section 191 were not overridden by the provisions of sections 192, 208 and 209, the tax not deducted at source was payable as advance tax and in case of default, interest under section 234B was chargeable. The relevant portion of the judgment in case of Halliburton Offshore Inc. (supra) referred to by the ld. DR were as under :—

"It is important to note that section 234B imposes interest, which is compensatory in nature and not as a penalty (see Union Home Products Ltd. v. Union of India [1995] 215 ITR 758 (Kar.) at page 766). Secondly, although section 191 of the Act is not overridden by sections 192, 208 and 209(1)(a)( d) of the Act, the scheme of sections 208 and 209 of the Act indicates that in order to compute advance tax the assessee has to, inter alia, estimate his current income and calculate the tax on such income by applying the rates in force. That under section 209(1)(d), the Income-tax calculated is to be reduced by the amount of tax which would be deductible at source or collectible at source, which in this case has not been done by the employer company according to the law prevailing for which the assessee cannot be faulted. As stated above at the relevant time there were conflicting decisions of the Tribunal. A bona fide dispute was pending. The assessee had to estimate his current income. The words used under section 209(1)(a), make the assessee estimate his current income and since a bona fide dispute was pending, imposition of interest under section 234B was not justified without hearing and without reasons."

4. We have perused the records and considered the rival contentions carefully. The limited issue raised in this appeal is whether the tax deductible at source can be excluded from the tax payable while computing the liability on account of advance tax even in cases where tax had not actually been deducted at source.

4.1 The Income-tax Act, 1961 provides for the payment of tax in advance and in certain types of income, the person responsible for paying the income, chargeable under the Act, is required to deduct tax at source. Sections 192 to section 296D relate to deduction of tax at source in relation to different specified cases of payments. Section 192, for example, relates to deduction of tax at source by the person responsible for making the payment of salary income. There are also provisions contained in section 206C for collection of tax at source by the sellers from the buyers in case of certain trades like alcoholic liquor, forest produce etc. Further, there are provisions for payment of tax in advance. Section 207 read with section 208 provides that income-tax shall be payable in advance whenever the tax payable is Rs. 5000 and more. Section 209 contains provisions for computation of advance tax. Advance tax is payable on estimated current income under clauses (a), (b) and (c ) of sub-section (1) of section 209. Sub-clause (d) of sub-section (1) of section 209 provides that the Income-tax calculated under the clauses (a), (b) and (c ) for the purpose of advance tax will be reduced by the amount of income-tax which would be deductible or collectible at source during the financial year. The provisions of sub-section (1) of section 209 which are relevant in this case are reproduced below as a ready reference :—

"209. (1) The amount of advance lax payable by an assessee in the financial year shall, subject to provisions of sub-sections (2) and (3), be computed as follows, namely :—

(a) ...........
(b) ...........
(c) ...........
(d) The Income-tax calculated under clause ( a ) or clause ( b) or clause ( c) shall, in each case, be reduced by the amount of Income-tax which would be deductible (or collectible) at source during the said financial year under any provision of this Act from any income (as computed before allowing any deductions admissible under this Act) which has been taken into account in computing the current income or, as the case may be, the total income aforesaid; and the amount of income-tax so reduced shall be the advance lax payable."

4.2 Further, section 191 of the Act provides that in cases of income in respect of which there is no provision for deducting tax at source or in cases where the income-tax had not been deducted at source, the income-tax shall be payable by the assessee direct. The said section is reproduced below as a ready reference.

"191. Direct payment.—In the case of income in respect of which provision is not made under this chapter for deducting income-tax at the time of payment, and in any case where income-tax has not been deducted in accordance with the provisions of this Chapter, income-tax shall be payable by the assessee direct."

4.3 The argument of the Ld. CIT DR is that in cases where the tax had not been deducted at source, tax is payable by the assessee direct under section 191 and once the tax is payable direct and the same will be payable as advance tax in view of the judgment of Hon'ble High Court of Uttaranchal in case of Halliburton Offshore Services Inc. (supra) in which it has been held that the provisions of section 191 are not overridden by the provisions of section 209(1)(d) as per which the tax deductible at source has to be excluded from the amount payable as advance tax. In other words, the argument is that unless the tax has actually been deducted at source, the same cannot be deducted while computing the advance tax payable, merely because the tax was deductible.

4.4 We have considered the matter carefully but we are not convinced by the argument advanced by the ld. CIT DR. We find that section 191 along with section 190 falls in Part A of the Chapter XVII, which relates to collection and recovery of tax. Section 190 relates to deduction at source and advance payment and provides that notwithstanding the fact that regular assessment in respect of any income is to be made in a later assessment year, tax on such income shall be payable by deduction or collection at source or by advance payment as the case may be in accordance with the provisions of this chapter. Section 191, which has been reproduced earlier, provides for another mode of collection of tax by way of direct payment. As there are separate provisions for deduction at source/advance payment and direct payment, the direct payment re-ferred to in section 191 obviously is not in relation to payment of advance tax. Direct payment is a different mode of collection in addition to collection at source and advance tax. Therefore, even if the provisions of section 191 are not overridden by the provisions of section 209, the amount payable by the assessee direct under the provisions of section 191 in cases where tax had not been deducted at source, is not the amount payable as advance tax. The amount payable as advance tax has to be computed under the provisions of section 209, which is a specific provision for this purpose. Under clause (d) of sub-section (1) of section 209, the tax deductible at source has to be excluded while computing the advance tax payable. Had the Legislature wanted that only the tax actually deducted at source or collected at source, should be excluded, they would not have used the words 'tax deductible at source' or 'collectible at source'. The phrase 'deductible at source' has not been used casually or without any purpose. There is a reasoning for excluding the 'tax deductible at source' because in cases where tax has not been deducted at source by the person responsible, the said person is deemed to be an assessee in default under section 201 in respect of whole or any part of tax which had not been deducted at source and he is also liable for payment of interest and penalty under the said section. Since the 'tax deductible at source' in case not deducted, could be recovered with interest from the person responsible for deducting the same at source, the 'tax deductible' has been excluded from the advance tax liability of the assessee. The provisions of section 191 contain only an alternate mode of recovery so that in case tax could not be recovered from the person responsible in case of default, it could be collected from the assessee who is primarily responsible for paying the tax. The section does not say that the same is payable as advance tax. There is separate section 190 in relation to collection of tax at source and advance payment. Though the Hon'ble High Court of Uttaranchal in case of Halliburton Offshore Services Inc. (supra) have held that the provisions of section 191 are not overridden by the provisions of section 209, the Hon'ble High Court has nowhere held that the tax payable by the assessee as per section 191 will be payable in advance tax. We are therefore, unable to agree with the arguments advanced by the Ld. CIT DR.

4.5 We also find that this aspect has also been considered recently by another bench of the Tribunal at Delhi in case of Western Geco International Ltd. (supra) in which the Tribunal after detailed examination and after referring to the decision of Special Bench in case of Motorola Inc. (supra) held as under :—

"We have given careful thought to the submission of the Ld. DR. Having regard to provisions of section 191, it has to be accepted that assessee has to pay tax, payable by him direct, if tax had not been deducted from his income. However, section 191 only talks of income-tax it does not talk of payment of "advance tax" or "interest" for which there are separate provisions in the Act as noted above. Advance tax is payable by an assessee as per provisions of section 207, quoted above. It is also to be paid in accordance with provisions of sections 208 to 219 of the Act on total income chargeable to tax in the financial year for the immediately following assessment year. It is payable on the current income. Section 208 further provides that advance tax is payable if such tax payable on the current income computed in accordance with provisions of this Chapter is Rs. 5000 or more. So for computation of advance tax, we are to look to provisions of section 209. Clause (d) of section 209(1) clearly provides that while computing advance tax, the amount of income-tax, which is deductible or collectible at source, will be deducted from the advance tax payable. In other words, advance tax payable will be reduced by the amount of tax at source "deductible or collectible". Therefore, when tax is deductible or collectible at source from salary which is the only source of income, no advance tax would be payable by such an employee.............."

4.6 Thus, the issue had also been considered by the decision of coordinate bench in case of Western Geco International Ltd. (supra) in which provisions of section 191 had been specifically dealt with. The Tribunal following the decision of the Special Bench in the case of Motorola Inc (supra) held that tax deductible at source had to be excluded while computing the advance tax liability. The argument of Ld. CIT DR is that these cases require reconsideration in view of the specific observation of Hon'ble High Court of Uttaranchal in case of Halliburton Offshore Services Inc. (supra) that the provisions of section 191 are not overridden by the section 209. We have dealt with this argument of Ld. CIT DR in earlier part of this order and for the reasons given therein we are unable to accept these arguments. There is no judgment of any High Court or the Apex Court brought to our notice in which it has been specifically held that the amount of tax payable direct by the assessee under the provisions of section 191 will be payable in advance. Though the Hon'ble High Court of Uttaranchal did observe in case of Halliburton Offshore Services Inc. (supra) that the provisions of section 191 were not overridden by the provisions of section 209(1)(d), the High Court nowhere held that the provisions of section 191 would override the provisions of section 209(1)(d) and that the amount of tax payable direct as referred to in section 191 would be payable in advance.

4.7 In view of the foregoing discussion, we hold that the tax deductible at source has to be excluded while computing the advance tax liability as provided in section 209(1)(d), even if the tax had not actually been deducted. In this case, there is no dispute that the entire income of the assessee under reference was tax deductible at source. Therefore, no advance tax was payable by these assessees and as a result there will be no case for charge of interest under section 234B. We accordingly, see no infirmity in the order of CIT(A) directing the Assessing Officer to delete the interest charged under section 234B. The order of CIT(A) is thus upheld.

5. In the result, all the appeals of the revenue stand dismissed.