These four departmental appeals involving common issue are disposed off by this common order. department has raised following ground of appeal, which is common in respect of four appeals:-"On facts and in circumstances of case and in law, CIT(A) erred in holding that interest under sections 234A and 234B of Income-tax Act, 1961 was not chargeable i n case of assessee, on ground that in case of non-resident assessee, all sums chargeable to tax are liable to deduction of tax at source under section 195 of Income-tax Act, 1961." 2. relevant facts are that assessee-company has been treated by Assessing Officer as represented assessee of M/s. Booz Allen Hamilton Inc. S E Asia/UK/USA/Brazil under section 163. aforesaid company received various payments on which tax was deductible at source as per provisions of section 195 of Act. assessee-company filed return of income in respect o f assessment year 1998-99 declaring nil income on ground that payments received by one NRI company from other NRI companies cannot be brought to charge of tax under provisions of Income-tax Act, 1961. This claim was rejected by Assessing Officer with result that payments received by NRI were assessed in hands of assessee-company as representative assessee of NRI. Assessing Officer also levied interest under sections 234A and 234B. assessment made by Assessing Officer was carried in appeal before CIT(A), who confirmed quantum of assessed income but deleted interest charged under both sections as mentioned above with following observations:- "Insofar as objection to levy of interest under sections 234A and 234B for want of any specific direction in assessment is concerned, I do not agree with appellant because on specific query by me, it was admitted by AR that duly signed form ITNS No. 150 was also served on appellant along with assessment order. Therefore, there does not remain any defect of not giving any specific direction of charging of interest under sections 234A and 234B of Income-tax Act, 1961 in assessment order. However, I agree with contention of AR that interest under sections 234A and 234B is not chargeable in this case because it is case of non-resident assessee where any sum chargeable to tax is liable to deduction of tax at source under section 195 of Income-tax Act, 1961. Respectfully following decisions as relied by appellant, levy of interest under sections 234A and 234B is directed to be deleted." 3. learned DR Shri R.N. Parbhat submitted that learned CIT(A) was not justified in deleting levy of interest charged by Assessing Officer. learned DR relied on ITAT, Delhi Bench decision in case of Asia Satellite Telecommunication Co. Ltd. v. Dy. CIT [2003] 85 ITD 478. He invited our attention to relevant part of ratio of this case, which is reproduced below from head note:- "The liability towards interest under section 234A is mandatory and arises on account of failure to file return within time as prescribed under section 139(1). As assessee was under obligations to file return on or before 30- 11-1997, which was actually not filed in time, liability to pay interest under section 234A was rightly attracted and CIT(A) was justified in holding. Section 234B is attracted only when assessee is liable to pay advance t x under section 208. It was admitted position that no tax was actually deducted by customers of assessee. But word used in section 209(1)(d) is 'deductible' and not 'deducted'. Therefore, if any tax was deductible from any income paid to assessee during year, no interest under section 234B could be charged to extent irrespective of fact whether it had been actually deducted or not." 4. In above case, with regard to levy of interest under section 234B, Tribunal held that there is no liability on part of assessee to pay advance tax, if income of assessee is such on which tax is deductible at source as per provisions of Act. Therefore, in such situation, interest under section 234B cannot be charged. However, with regard to levy of interest under section 234A, Tribunal held that such interest is leviable for default of not filing return of income in time and levy of such interest is mandatory. With regard to interest under section 234B, matter was restored to Assessing Officer for determining extent of such income on which tax was deductible at source. learned DR also referred to ITAT, Delhi Special Bench decision in case of Motorola Inc. v. Dy. CIT [2005] 95 ITD 269. In this case also, Special Bench was concerned with question regarding levy of interest under sections 234A and 234B, in case where tax at source was deductible under section 195 of Act. It was held by Special Bench that charging of interest under both sections as mandatory and Assessing Officer has no power to reduce or waive such interest. However, with regard to levy of interest under section 234B, it was held by Special Bench that no such interest can be chargeable, in case where on relevant income, tax is deductible at source. 5. learned, DR therefore, submitted that learned CIT(A) was not justified in deleting interest charged under section 234A of Act. With regard to interest under section 234B, learned DR relied on decision of Hon'ble Calcutta High Court in case of CIT v. Borhat Tea Co. Ltd. [1992] 193 ITR 134. Drawing support from this case, learned DR contended that for purpose of charging of interest under section 234B, what is relevant is actual tax deducted at source and not tax deductible. 6. learned counsel appearing for assessee Ms. Mital Patel argued that with regard to levy of interest under section 234B, issue is squarely covered by ITAT, Delhi Special Bench decision in case of Motorola Inc. (supra). For same proposition, learned counsel appearing for assessee also drew support from following cases:- (1)Fisons PLC v. Dy. CIT [2005] 272 ITR (AT) 59 (Mum.) (2)SEDCO Forex International Drilling Inc. v. Dy. CIT [2000] 67 TTJ (Delhi) 670 7. Regarding interest under section 234A, she relied on ITAT, Mumbai (TM) decision in case of M.M. Ratnam v. ITO [1997] 62 ITD 21. learned counsel submitted that in above case, Tribunal duly considered provisions of section 209(1)(d) and held that in case, where tax at source is deductible from relevant income, interest is not leviable under sections 234A, 234B and 234C. She invited our attention to relevant part of this decision, which is reproduced below from page 43 of report: "From provisions of sub-clause (d) of section 209(1) extracted above, it is very clear that to arrive at amount of advance tax payable by assessee, income-tax calculated under clause (a) or clause (b) or clause (c) has to be reduced by amount of income-tax which would be deductible or collectible at source during said financial year under any provisions of Act, from any income which has been taken into account in computing current income or as case may be total income; and amount of income-tax so reduced shall be advance tax payable. 23. In light of these express provisions, we are of opinion that if any perquisite was taxable in assessee's hands, then, it was liable to be deduction of tax at source because same was taxable under head 'Salary'. 24. We are further of opinion, that if this was taxable under head 'Salary' then it was responsibility of employer to deduct tax at source and for failure of employer, assessee cannot be fastened with liability to pay such amount by way of advance tax. Therefore, question of charging interest under sections 234A, 234B and 234C do not arise at all and consequently same are cancelled." 8. With regard to charging of interest under section 234A, learned counsel also placed reliance on following cases: (1)Dr. Prannoy Roy v. CIT [2002] 254 ITR 755 (Delhi) (2)Milan Enterprise v. Asstt. CIT [2005] 95 ITD 18 (Mum.). 9. We have given careful consideration to rival submissions and we have gone through relevant facts as also precedents cited before us. We first deal with question regarding charging of interest under section 234A. Interest under section 234A is chargeable where return of income is not furnished before due date. Such interest is chargeable on amount of tax on total income as determined under section 143(1) or on regular assessment as reduced by advance tax paid and any tax deducted or collected at source. Thus, such interest is leviable when return of income is filed late by assessee and calculation of interest is based upon tax after allowing credit for advance tax and tax, which is deducted at source. It is notable that section 234A refers to "tax deducted" and not "tax deductible". On other hand, liability for levy of interest under section 234B arises in case, where assessee, who is liable to pay advance tax has failed to pay such tax or where there is shortfall in payment of advance tax. defaults for which interest is chargeable under sections 234A and 234B are separate and distinct. Before interest under section 234B is charged, it must be established that assessee is liable to pay advance tax under section 208 of Act. There is no such requirement for levy of interest under section 234A. learned counsel appearing for assessee has heavily relied on ITAT, Mumbai decision in case of M.M. Ratnam (supra), relevant part of which is already reproduced above. It is true that Tribunal has duly considered provisions of section 209(1)(d) and after considering these provisions, it has been held that liability for payment of advance tax arises only after deducting tax deductible at source from tax payable. In that case, assessee had received certain payments assessable under head 'Income from salary' on which tax was deductible at source by employer. It was held by Tribunal that in such case, assessee cannot be fastened with liability to pay such amount by way of tax. After observing thus, Tribunal at para 24 abruptly held that question of charging interest under sections 234A, 234B and 234C does not arise. As mentioned by us above, default regarding payment of advance tax has no relation whatsoever with levy of interest under section 234A. Irrespective of fact as to whether advance tax has been paid or not, interest under section 234A will be chargeable if there is delay in filing return of income. separate provisions of law as regards charging of interest under sections 234A and 234B have not been considered by Tribunal in case of M.M. Ratnam (supra). learned counsel appearing for assessee has also relied on Hon'ble Delhi High Court decision in case of Dr. Prannoy Roy (supra). relevant part of ratio of this case is reproduced below from head note:- "For assessment year 1995-96, petitioner earned substantial capital gains and paid tax due before return was due to be filed on October 31, 1995. Assessing Officer charged interest for return filed by assessee after delay of 11 months under section 234A of Income-tax Act, 1961. In revision petition filed by assessee under section 264, Commissioner held that deduction of tax paid was not provided in section 234A, as it compensates delay or default in filing return of income and not tax. On writ petition: Held, allowing petition, that petitioner had paid tax before due date for filing return for year in question. revenue had not suffered any monetary loss for non-filing of return by petitioner. Sections 234A, 234B and 234C were enacted to see that income-tax return was filed within prescribed time. If return was not filed within time prescribed, Assessing Officer would not only be entitled to issue appropriate notice directing assessee to file return but also in case of this nature take recourse to provisions of sections 147 and 148 of Act. Therefore, interest under section 234A would be payable only in case where tax had not been deposited prior to due date of filing of return." 10. From above, it is seen that even though, filing of return of income was delayed, entire tax was already paid by assessee before due date for filing of return of income. Therefore, High Court held that interest under section 234A is not chargeable as there was no loss to revenue, interest being only compensatory. facts of this case cannot be applied to facts of assessee's case. Similarly, in case of Milan Enterprise (supra), Tribunal held that where income-tax has been paid before due date for filing return of income, interest under section 234A cannot be levied. In case before us, return has been delayed and tax has not been paid before due date for filing return of income. learned counsel appearing for assessee has contended that on entire income, tax was deductible at source and further return of income was filed by assessee declaring nil income. In our view, these arguments are not relevant for purpose of charging of interest under section 234A. liability for payment of advance tax is determined after taking into account tax deductible at source. However, return of income for relevant assessment year is required to be filed in subsequent financial year and before filing return of income, assessee is well aware as to whether any tax at source has been deducted or not. assessee is liable to levy of interest under section 234A on assessed tax as reduced by advance tax actually paid and tax actually deducted at source. In our view, in present case, liability for levy of interest under section 234A has arisen on account of additions made by Assessing Officer and, therefore, even though interest under section 234A is mandatorily leviable as held by ITAT Special Bench in case of Motorola Inc. (supra), such interest has to be consequential to quantum of tax determined as payable. We have been given to understand that assessee's quantum appeal is pending before Tribunal and, therefore, we direct Assessing Officer to recalculate interest chargeable under section 234A on correct tax after giving effect to Tribunal's order in quantum appeal. 11. Coming to levy of charging of interest under section 234B, learned DR has relied on Hon'ble Calcutta High Court decision in case of Borhat Tea Co. Ltd. (supra). In that case, Hon'ble Calcutta High Court was concerned about levy of penalty under section 273(1)(b) and definition of assessed tax contained under section 215(5) for purpose of calculating penalty leviable. ratio of this decision may be reproduced below from head note:-"While computing assessed tax as defined under section 215(5) o f Income-tax Act, 1961, for purpose of determining quantum of minimum penalty imposable for default falling under section 273(1)(b), tax deductible at source and deducted within financial year has to be taken into consideration. assessee is not liable to pay any advance tax on income which is subject to deduction of tax at source. advance tax is paid in financial year; credit for tax so paid in advance is given to assessee at time of regular assessment in assessment year immediately following year in which advance tax is paid. It is, therefore, clear that tax deductible in context of section 215(5) means tax deducted at source. amount of tax so deducted at source under provisions of sections 192 to 195 is, so far as affected person is concerned, to be treated as income received by him. For purpose of computation of his total income, gross salary, gross dividend or gross interest, etc., i.e. amount actually received plus amount of tax deducted at source, will have to be considered. Unless tax is deducted at source during relevant previous year by payer, payee cannot claim benefit of such deduction while filing estimate of advance tax." 12. Hon'ble Calcutta High Court held that unless tax is deducted at source, payee cannot claim benefit of such deduction while filing estimate of advance tax. It is not known as to whether in that case, income subject to deduction of tax had already been received by assessee before filing estimate of advance tax. This question has been addressed by ITAT Special Bench in case of Motorola Inc. (supra) and relevant part of ratio of this decision is reproduced below from head note: "With regard to section 234B view of CIT(A) based on judgment o f Hon'ble Supreme Court in CIT v. Ranchi Club Ltd. (supra) could not be accepted. language of section 209(1)(d) supported assessee's contention, that they were not liable to pay advance tax. All payments made to assessees were tax deductible at source (even assuming that they were taxable). In that case, having regard to provisions of sections 201(1) and 201(1A) assessees could not be held to have committed default in paying advance tax. They were entitled to take into account tax which was deductible by payer, though not actually deducted. Consequently, there was no liability to pay interest. decision of CIT(A) to cancel interest under section 234B was to be upheld on merits. As regards interest under section 234A, matter was to be restored to file of Assessing Officer so that proper adjudication could be made with regard to applicability of sections so that both sides would have opportunity of putting forth their respective stands clearly." 13. Same view has been adopted by several Benches of Tribunal in cases, which have been relied upon by learned counsel appearing for assessee and which have been referred to (supra). In our view, Hon'ble Calcutta High Court decision relied upon by learned DR cannot be applied to facts of present case. ITAT Special Bench decision in case of Motorola Inc. (supra) is squarely applicable and, therefore, we hold that interest under section 234B is not leviable as entire income was subjected to tax deductible at source. liability for payment of advance tax arises under section 208 of Act and advance tax payable has to be computed under section 209. Section 209(1)(d) clearly stipulates that income-tax shall be reduced by amount of income-tax, which would be deductible or collectible at source during relevant financial year. Respectfully following Tribunal Special Bench decision in case of Motorola Inc. (supra) we direct Assessing Officer to delete interest levied under section 234B. 14. In result, appeals are allowed in part. *** JOINT DIRECTOR OF INCOME TAX v. BOOZ ALLEN & HAMILTON INC.