No Interest on Assessees u/s 234B, even on filing of Returns declaring NIL Income at the stage of Reassessment: ITAT grants Relief to General Motors [Read Order]

No Interest on Assessees u/s 234B, even on filing of Returns declaring NIL Income at the stage of Reassessment: ITAT grants Relief to General Motors [Read Order]

General Motors - ITAT -Taxscan

In a Relief to General Motors Overseas Corporation, the Income Tax Appellate Tribunal (ITAT) reaffirmed that no interest is leviable on the assessees under Section 234B of the Income Tax Act, even on the filing of returns, which declare ‘NIL’ income at the stage of reassessment.

In the case of General Motors Overseas Corporation vs. Assistant Commissioner of Income Tax (CIT), the appellant is a company which is engaged in the business of providing management and consulting services solely to the group entities worldwide. The appellant company entered into a contract named ‘Management Provision Agreement’ (MPA) with General Motors India Limited (GMIL). As per the agreement the appellant company has to provide executive personnel in connection with the development of general management, finance, purchasing, sales, service, marketing and assembly/ manufacturing activities to General Motors India Limited (GMIL). The appellant company in order to ascertain the Tax Liability, the Appellant filed an application before the Authority of Advance Ruling (AAR).

The issue raised in this case was whether the interest is leviable on the assessees under Section 234B of the Income Tax Act, even on the filing of returns, which declare ‘NIL’ income at the stage of reassessment or not?

The Income Tax Appellate Tribunal (ITAT) comprising of an Accountant Member, M. Balaganesh; and a Judicial Member, Latiet Kumar in the light of the decision passed by the Bombay High Court in the case of DIT(IT) vs Ngc Network Asia LLC, [2009] 222 CTR 85 (Bombay) it was held by the tribunal that no interest is leviable on the assessees under Section 234B of the Income Tax Act, even on the filing of returns, which declare ‘NIL’ income at the stage of reassessment. Therefore the tribunal partly allowed the appeal.

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