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Sec. 234B of Income Tax Act, 1961—Interest —No interest is leviable on the assessees under Section 234B, even though they filed returns declaring NIL income at the stage of reassessment.
Facts: Assessee being a non-resident entity in India, tax is deductible at source on any income taxable in India in accordance with the provisions of section 195. It is submitted that the provisions of section 234B has no application.
Held, that Court finds that no interest is leviable on the assessees under Section 234B, even though they filed returns declaring NIL income at the stage of reassessment. The payers were obliged to determine whether the assessees were liable to tax under Section 195(1), and to what extent, by taking recourse to the mechanism provided in Section 195(2). The failure of the payers to do so does not leave the Revenue without remedy; the payer may be regarded an assessee-in-default under Section 201, and the consequences delineated in that provision will visit the payer. The appeal of the Revenue is accordingly dismissed without any order as to costs. In the result, appeal of the assessee is partly allowed. - GENERAL MOTORS OVERSEAS CORPORATION V/s ASSTT. CIT -  80 ITR (TRIB) 478 (ITAT-MUMBAI)