JUDGMENT : Anand Sharma, J. 1. This writ petition under Article 226 of Constitution of India has been filed by petitioner in order to assail the certificate of determination under Section 197 (1)/195 of Income Tax Act, 1961 (for short 'Act of 1961') dated 13 th August 2018 (wrongly referred as an ‘order’ by petitioner) relating to Tax deducted at Source (for short, 'TDS'), authorising petitioner to pay or credit other sums upto Rs.30,76,12,500/- after deducting income tax at the rate of 5% to the account of HSBC Bank (Mauritius) Limited, (HSBC Mauritius), a foreign lender. This pertains to period between 27 th April 2018 to 31 st March 2019. Petitioner has further prayed for a direction against respondents to refund amount of Rs. 57,71,736/- being the tax amount deposited by petitioner under protest pursuant to impugned determination dated 13 th August 2018 along with interest thereon. 2. Brief facts of writ petition are that petitioner, a company incorporated under Companies Act, 2013, is engaged in infrastructure projects and renewable energy facilities. For availing funds for its new long-term project, petitioner entered into an External Commercial Borrowing (for short, 'ECB') agreement dated 20 th March 2018 with a non-resident financial institution namely HSBC Mauritius, which is a tax resident of Mauritius. 3. Section 7(3) of ECB deals with taxes and lays down as under:- "7.3:Taxes (a) All payments to be made by the Borrower to the Bank under the Facility Documents shall be made free and clear of all present and future taxes and deductions of whatever nature for or on account of tax unless the Borrower is required to make such a payment subject to the deduction or withholding of tax, in which case the sum payable by the Borrower in respect of which such deduction or withholding is required to be made by the Government of India or any other agency under the Indian Government or otherwise, shall be increased to the extent necessary to ensure that, after the making of the required deduction or withholding, the Bank receives (free from any liability in respect of any such deduction or withholding) a net sum, equal to the sum which it would have received had no such deduction or withholding been made or required to be made." 4. It has been contended that India has entered into a Double Taxation Avoidance Agreement (for short, 'DTAA') dated 6 th December 1983 with Mauritius. Petitioner further contends that Article 11 of DTAA deals with “Interest” and its sub-clause (4) lays down that interest arising in a contracting State shall be exempted from tax in that contracting State to the extent approved by Government of that State, provided that transaction giving rise to debt-claim has been approved in this regard by Government of first mentioned contracting State. 5. Following clauses of DTAA are relevant for purpose of dispute involved in instant writ petition: “ARTICLE 2 TAXES COVERED 1. The existing taxes to which this Convention shall apply are: (a) in the case of India,- (i) the income-tax including any surcharge thereon imposed under the Income-tax Act, 1961 (43 of 1961); (ii) the surtax imposed under the Companies (Profits) Surtax Act, 1964 (7 of 1964); DEFINITION ARTICLE 3 GENERAL DEFINITION (c) the terms "a Contracting State" and "the other Contracting State" mean India or Mauritius as the context requires; ARTICLE -11 INTEREST 1. Interest arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State. 2........ 3........ 3A...... 4. Interest arising in a Contracting State shall be exempt from tax in that Contracting State to the ex approved by the Government of that State if it is derived and beneficially owned by any person [other than a person referred to in paragraph (3)] who is a resident of the other Contracting State provided that the transaction giving rise to the debt-claim has been approved in this regard by the Government of the mentioned Contracting State.” (emphasis supplied) 6. However, no separate machinery or mechanism has been specified in DTAA for getting approval of transaction/ agreement for purpose of taking benefit of exemption as per sub-clause (4) of Article 11 of DTAA. 7. Petitioner indicated that in similar circumstance, Section 194LC of Act of 1961, introduced by Finance Act, 2012 provides for dealing with income by way of interest from Indian company and lays down that where any income by way of interest is payable to a non-resident, person responsible for making payment shall at time of credit of such income to account of payee deduct income-tax at a lower rate of five percent. It further lays down that where such interest shall be income by way of interest payable by specified company in respect of monies borrowed by it in foreign currency from a source outside India under a loan agreement then such loan agreement should have been approved by Central Government in this behalf. Section 194LC of Act of 1961 reads as under: "194LC. (1) Where any income by way of interest referred to in sub-section (2) is payable to a non-resident, not being a company or to a foreign company by a specified company or a business trust, the person responsible for making the payment, shall at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct the income-tax thereon at the rate of five per cent." (2) The interest referred to in sub-section (1) shall be the income by way of interest payable by the specified company or the business trust, - (i) in respect of monies borrowed by it in foreign currency from a source outside India,- (a) under a loan agreement at any time on or after the 1st day of July, 2012 but before the 1st day of July 2020; or (b) by way of issue of long-term infrastructure bonds at any time on or after the 1st day of July, 2012 but before the 1st day of October, 2014; or (c) by way of issue of any long-term bond including long-term infrastructure bond at any time on or after the 1st day of October, 2014 but before the 1st day of July 2020, as approved by the Central Government in this behalf" 8. Petitioner further pointed out that simultaneous to aforesaid introduction of Section 194LC in Act of 1961 and to make it more workable and effective, CBDT issued an Income Tax Circular No.7/2012-CBDT dated 21 st September 2012 providing for parameters for approval of loan agreement for availing benefits under Section 194LC of Act of 1961. Petitioner further pointed out that simultaneous to aforesaid introduction of Section 194LC in Act of 1961 and to make it more workable and effective, CBDT issued an Income Tax Circular No.7/2012-CBDT dated 21 st September 2012 providing for parameters for approval of loan agreement for availing benefits under Section 194LC of Act of 1961. It was also acknowledged that looking to large number of cases of overseas borrowings, to mitigate compliance burden and hardship, a concept of deemed approval was evolved in respect of loan agreements and issue of long-term infrastructure term bond by Indian companies which satisfy conditions mentioned in said circular dated 21 st September 2012. Para 5 and 6 of Circular dated 21 st September 2012 read as under: "5. Considering the fact that there would be a large number of cases of overseas borrowings or bond issues to be undertaken by Indian companies, providing a mechanism involving approval in each and every specific case would entail avoidable compliance burden on the borrower/issuer of bond. In order to mitigate the compliance burden and hardship, the Central Board of Direct Taxes [with the approval of Central Government] hereby conveys the approval of Central Government for the purposes of section 194LC in respect of the loan agreements and issue of long-term infrastructure term bond by Indian companies which satisfy the conditions mentioned in paras A, B and C below: A. In respect of agreements for loan a. The borrowing of money should be under a loan agreement. b. The monies borrowed under the loan agreement by the Indian company should comply with clause (d) of sub section (3) of section 6 of the Foreign Exchange Management Act, 1999 read with Notification No. FEMA3/2000-RB viz. Foreign Exchange Management (Borrowing or Lending in Foreign exchange) Regulations 2000, dated May 3, 2000, as amended from time to time, (hereafter referred to as "ECB regulations"), either under the automatic route or under the approval route………. ………………………………………….” 6. In view of the above, any loan agreement or bond issue, which satisfies the above conditions, would be treated as approved by the Central Government for the purposes of Section 194LC . 9. ………………………………………….” 6. In view of the above, any loan agreement or bond issue, which satisfies the above conditions, would be treated as approved by the Central Government for the purposes of Section 194LC . 9. Further, it has been averred that in compliance with statutory framework and Circular dated 21 st September 2012 issued by CBDT, petitioner applied for and obtained approval under Section 194LC (2)(ia) of Act of 1961 in respect of aforesaid ECB agreement dated 20 th March 2018. It is contended that vide letter dated 23 rd March 2018, Reserve Bank of India allotted loan registration No.201803161, which was done as per ECB guidelines. This approval was granted recognizing that borrowing was made under an agreement approved for the purpose of providing long-term infrastructure finance, satisfying statutory requirement for concessional taxation under Section 194LC of Act of 1961. 10. Subsequently, while making interest payments to foreign lender, petitioner claimed benefit of Article 11 of applicable DTAA, which provided for reduced or NIL tax on interest income arising in a contracting State and received by a tax-resident of other contracting State (treaty partner country). It has been mentioned that HSBC Mauritius i.e., foreign lender duly furnished its Tax Residency Certificate (for short, 'TRC') and all other documentation was made available to demonstrate its eligibility under DTAA. 11. However, Assessing Officer refused to accept petitioner’s position contending that unless a separate approval of ECB agreement, solely accorded for purpose of benefits under DTAA is issued, petitioner would not be entitled for benefits otherwise admissible in Clause 11 of DTAA and thus by issuing impugned certificate under Section 195 (2)/197, limited only for purpose of Section 194-LC of Act of 1961, petitioner was statutorily obligated to deduct tax at source at the rate of 5%. Since Foreign lender was not subjected to any tax liability on interest accrued from any transaction, by virtue of specific terms under DTAA, petitioner had to deposit 5% TDS from its own account. Petitioner has submitted that irrational approach of respondents based upon misinterpretation of statutory provisions, has caused grave prejudice and miscarriage of justice to petitioner. Hence, petitioner has prayed for refunding aforesaid 5% TDS, which albeit not payable as per DTAA, yet deposited under protest by petitioner. 12. Petitioner has submitted that irrational approach of respondents based upon misinterpretation of statutory provisions, has caused grave prejudice and miscarriage of justice to petitioner. Hence, petitioner has prayed for refunding aforesaid 5% TDS, which albeit not payable as per DTAA, yet deposited under protest by petitioner. 12. Revenue, through its reply to writ petition, contends that benefit of DTAA cannot be claimed merely on basis of Section 194LC of Act of 1961 approval. It maintains that Section 195 imposes an independent obligation on any person responsible for paying any amount chargeable under Act to a non-resident to deduct tax at applicable rates and if payer seeks to deduct tax at a lower or NIL rate, a separate approval of Central Government issued in reference to the terms and conditions of DTAA for determination under Section 195 (2) or a certificate under Section 197, is a mandatory precondition. 13. It is the stand of Revenue that approval granted under Section 194LC (2)(ia) of Act of 1961 is limited to concessional tax treatment under domestic law and does not automatically entitle payer to apply DTAA rates without specific permission from tax authority under Section 195 . 14. It has also been submitted on behalf of Revenue that taxing statutes must be construed strictly and there should not be any interpretation to frustrate manifest object of statute or to allow taxpayers to circumvent tax liability by resorting to irrational reasons. 15. An objection has also been raised by Revenue that no application whatsoever has been filed by petitioner before competent authority for seeking refund of TDS deposited by it pursuant to certificate dated 13 th August 2018 at the rate of 5%, hence, relief of refund, as prayed in writ petition, is totally inconceivable and untenable. 16. Thus, in view of aforesaid facts, first and foremost question before this Court is whether approval granted in respect of ECB between petitioner and HSBC Mauritius under Section 194LC (2) (ia) of Act of 1961 was sufficient to enable petitioner to apply DTAA rates for determination under Section 195 (2) of the Act of 1961 or not? 17. In this regard, we may refer that Section 90 (2) of Act of 1961 provides a statutory override in favour of taxpayers. 17. In this regard, we may refer that Section 90 (2) of Act of 1961 provides a statutory override in favour of taxpayers. Its bare reading would lead to an inference that where an agreement to avoid double tax has been entered into between Government of India and a foreign country and agreement provides a more beneficial treatment, then the domestic law provisions of agreement (DTAA) shall prevail. 18. Section 194LC of Act of 1961, on other hand, is a special provision introduced to incentivize foreign investment into India through concessional withholding rates. Sub-section (2)(ia) specifically allows Central Government to approve borrowings for the purpose of long-term infrastructure development, which then automatically qualifies interest payment for a lower TDS rate of 5%. 19. Indisputably, approval under Section 194LC (2)(ia) of Act of 1961 was granted to petitioner that after due scrutiny by competent authority and such approval represents a formal recognition that borrowing qualifies for long-term infrastructure financing and meets legislative intent of provision. 20. Now, if applicable DTAA provides for an even lower rate; or NIL rate, as the case may be, of tax on interest income, then by virtue of Section 90 (2), that treaty rate becomes applicable. Once foreign recipient is established to be a tax-resident of treaty country and interest income falls within scope of Article 11 of DTAA, payer must be allowed to apply that concessional rate. 21. Now, even if Section 195 (2) is considered to be a mandatory prerequisite to claim such benefit would negate plain language and effect of Section 90 (2). Section 195 (2) is a safeguard mechanism, and obviously not a gateway for eligibility. It is meant to be invoked in cases where there is doubt as to chargeability of payment and not where transaction is transparent and duly approved by the Government. 22. The DTAA under sub-clause (4) of Article 11 only provides that the transaction giving rise to the debt claim has to be approved in that regard by the Government of the mentioned contracting State, which, in this case is India. Admittedly, it has been given approval because in the certificate dated 13 th August 2019 issued under Section 197 (1), the Assessing Officer has authorised the assessee-petitioner to pay interest to HSBC Mauritius after deducting income tax @ 5%. The DTAA does not prescribe any separate permission to be obtained. 23. Admittedly, it has been given approval because in the certificate dated 13 th August 2019 issued under Section 197 (1), the Assessing Officer has authorised the assessee-petitioner to pay interest to HSBC Mauritius after deducting income tax @ 5%. The DTAA does not prescribe any separate permission to be obtained. 23. Therefore, we are of the considered view that to demand another certificate or approval of agreement addressing terms and conditions of DTAA in such cases amounts to duplication and a formalistic interpretation of tax law, which cannot be appreciated in light of facts and circumstances of case. Rather requiring multiple clearances for the same transaction not only hampers ease of doing business but also undermines legislative intent behind Sections 194LC and 90 of Act of 1961. 24. As regards objection raised by Revenue that petitioner has not filed any application for refund in instant matter, it would be sufficient to observe that petitioner was not a representative assessee of foreign lender ‘HSBC Mauritius’, within the meaning of Section 160 of Act of 1961 and, therefore, it could not have filed a refund claim for tax deducted at source. Legal relationship between petitioner and HSBC Mauritius was purely contractual, governed by ECB agreement and petitioner was under a statutory duty to deduct TDS only insofar as required by law. There is nothing on record to suggest that HSBC Mauritius had authorized petitioner to act on its behalf in tax proceedings, nor is there any statutory deeming provision applicable in this case that would render petitioner its representative assessee. 25. As such, the Revenue’s expectation that petitioner ought to have filed for refund of excess TDS on behalf of HSBC is wholly misplaced and contrary to settled tax jurisprudence. Mere fact that petitioner had filed an application under Section 195 , even though not strictly mandatory in light of Section 90 (2) and DTAA eligibility, reflects a bona fide effort on its part to comply with law and avoid any future dispute. That application was, in effect, indicative of transparency, not a precondition to DTAA benefit. 26. Moreover, approval granted under Section 194LC (2)(ia) of Act of 1961, which Revenue itself has never disputed, was based on a thorough evaluation of ECB agreement entered into between petitioner and HSBC. That application was, in effect, indicative of transparency, not a precondition to DTAA benefit. 26. Moreover, approval granted under Section 194LC (2)(ia) of Act of 1961, which Revenue itself has never disputed, was based on a thorough evaluation of ECB agreement entered into between petitioner and HSBC. Once such approval is granted, it logically follows that same agreement qualifies not just for concessional treatment under domestic law but also triggers beneficial treatment under DTAA, wherever applicable. 27. We find that conduct of Revenue to accept validity of agreement under Section 194LC , at one hand and, yet simultaneously reject its relevance for DTAA purposes, is to adopt an inconsistent and contradictory position which this Court cannot countenance. 28. For the foregoing reasons, this Court is of firm view that approval granted under Section 194LC (2)(ia) of Act of 1961 is substantive and sufficient for applying DTAA rate on interest payments to foreign lender. Foreign lender’s eligibility under DTAA having been established through supporting documentation, no further separate approval under Section 195 (2) or Section 197 was required. 29. On the issue of entitlement of petitioner for getting refund of TDS deposited under protest at the rate of 5%, it would be relevant that almost similar question arose before Bombay High Court in case of Grasim Industries Ltd. Vs. Assistant Commissioner of Income Tax and Ors., , [2023 (6) BomCR 240] where Division Bench of Bombay High Court observed as under: "20. In our view, the consequence of the above provisions is that once the appellant succeeds in the appeal, the Revenue authorities must proceed on the basis that the appellant did not have any obligation to make the payment. Thus the amount wrongly deducted or paid to the Revenue authorities where it was not required to be paid would become refundable to the appellant. Of course, that is subject to the condition that the person receiving the payment has not claimed credit for the same or is not claiming credit for the same. 22. The Department had also issued two Circulars No. 769 dated August 6, 1998 ([1998] 232 ITR (St.) 25 ) and No. 790 dated April 20, 2000 ([2000] 243ITR (St.) 58). Of course, that is subject to the condition that the person receiving the payment has not claimed credit for the same or is not claiming credit for the same. 22. The Department had also issued two Circulars No. 769 dated August 6, 1998 ([1998] 232 ITR (St.) 25 ) and No. 790 dated April 20, 2000 ([2000] 243ITR (St.) 58). Though the petitioner is not claiming any relief under those circulars, these circulars are also pointers to the effect that in appropriate cases Revenue authorities must grant refund and/or return the sums collected without lawful authority, independent of the provisions of the Act. The Central Board of Direct Taxes ("CBDT") issued a Circular No. 7 of 2007 dated October 23, 2007 ([2007] 294 ITR (St.) 32) highlighting further problems regarding procedure for refund of tax deducted at source. Based on representation received from taxpayers to take into account situations where genuine claim for refund arises to the person deducting tax at source from payment to the non-resident, the Central Board of Direct Taxes amended Circular No. 790 dated April 20, 2000. In Circular No. 7 of 2007 dated October 23, 2007, the Central Board of Direct Taxes was conscious of situation where non- resident may not apply for refund which would put the resident deductor to genuine hardship as he would not be able to deduct and deposit as tax. The circular states that where no income has accrued to the non-resident due to cancellation of contract or where income has accrued but no tax is due on that income or tax is due at a lesser rate the amount deposited to the credit of Government to that extent under section 145 cannot be said to be "tax". The circular further states that this amount can be refunded with prior approval of the Chief Commissioner of Income-tax or the Director General of Income-tax concerned, to the persons who deducted it from the payment to the non-resident under section 195 of the Act. 23. In our view, the refusal of the Department to return the amount and retaining the same is unauthorised by law and would only amount to unjust enrichment by the Department on technical grounds. 24. The apex court in CIT v. Shelly Products [2003] 261 ITR 367 (SC), as relied upon by Mr. 23. In our view, the refusal of the Department to return the amount and retaining the same is unauthorised by law and would only amount to unjust enrichment by the Department on technical grounds. 24. The apex court in CIT v. Shelly Products [2003] 261 ITR 367 (SC), as relied upon by Mr. Mistri, has held that where an assessee chooses to deposit by way of abundant caution advance tax or self-assessment tax which is in excess of his liability on the basis of return furnished or by mistake or inadvertence or on account of ignorance, included in his income any amount which is exempted from payment of Income-tax or is not an income within the contemplation of law, he can certainly make such claim before the concerned authority for refund and he must be given that refund on being satisfied that refund is due and payable. Not giving the refund, in our view, would be in breach of article 265 of the Constitution of India which states, "no tax shall be levied or collected except by authority of law". In New India Industries Ltd. v. Union of India , AIR 1990 Bom 239 the court held that taxes illegally levied must be refunded. The doctrine of unjust enrichment has to be applied after having regard to the facts of each case. 25. In Nirmala L. Mehta v. A. Balasubramanian, CIT [2004] 269 ITR 1 (Bom) the court relying on a Constitution Bench judgment of the Supreme Court in Amalgamated Coalfields Ltd. v. Janapada Sabha, AIR 1961 SC 964 opined that acquiescence to illegal tax for a long time is not a ground for denying the party the relief that he is entitled to. 26. In Balmukund Acharya v. Dy. CIT [2009] 310 ITR 310 (Bom) the court held that the authorities under the Act are under an obligation to act in accordance with the law. Tax can be collected only as provided under the Act. If any assessee, under a mistake, misconceptions or on not being properly instructed is over assessed, the authorities under the Act are required to assist him and ensure that only legitimate taxes due are collected. Tax can be collected only as provided under the Act. If any assessee, under a mistake, misconceptions or on not being properly instructed is over assessed, the authorities under the Act are required to assist him and ensure that only legitimate taxes due are collected. Paragraphs 31, 32 and 33 of Balmukund Acharya (supra) read as under (page 318 of 310 ITR) : "Having said so, we must observe that the apex court and the various High Courts have ruled that the authorities under the Act are under an obligation to act in accordance with law. Tax can be collected only as provided under the Act. If any assessee, under a mistake, misconceptions or on not being properly instructed is over assessed, the authorities under the Act are required to assist him and ensure that only legitimate taxes due are collected (see S. R. Koshti v. CIT [2005] 276 ITR 165 (Guj), C. P. A. Yoosuf v. ITO [1970] 77 ITR237 (Ker), CIT v. Bharat General Reinsurance Co. Ltd. [1971] 81 ITR303 (Delhi) and CIT v. Smt. Archana R. Dhanwatay [1982] 136 ITR355 (Bom). If particular levy is not permitted under the Act, tax cannot be levied applying the doctrine of estoppel. (See Dy. CST (Revenue) v. Sreeni Printers [1987] 67 STC 279 (Ker). This court in the case of Nirmala L. Mehta v. A. Balasubramaniam, CIT [2004] 269 ITR 1 (Bom) has held that there cannot be any estoppel against the statute. Article 265 of the Constitution of India in unmistakable terms provides that no tax shall be levied or collected except by authority of law. Acquiescence cannot take away from a party the relief that he is entitled to where the tax is levied or collected without authority of law. In the case on hand, it was obligatory on the part of the Assessing Officer to apply his mind to the facts disclosed in the return and assess the assessee keeping in mind the law holding the field." 30. This court entirely concurs with reasoning given by Bombay High Court in Grasim Industries Ltd. (supra) [authored by one of us (the CJ)] and holds that for foregoing reasons, where despite there being no statutory obligation petitioner bonafidely deposited 5% under protest, Revenue cannot be allowed to retain the same and is bound to refund the same to petitioner. 31. Accordingly, writ petition is allowed. 31. Accordingly, writ petition is allowed. Impugned action of Revenue in denying DTAA benefit is hereby quashed and set aside. Respondents are directed to allow petitioner to apply beneficial lower rate of DTAA, including NIL rate if applicable, on the interest payable to foreign lender in accordance with terms of applicable DTAA, read with approval granted under Section 194LC (2)(ia) of Act of 1961. 32. Revenue is directed to extend benefit of concessional tax deduction or NIL rate of TDS, as the case may be, under DTAA to petitioner in respect of interest paid to HSBC Mauritius, in accordance with valid government approval already on record. 33. In view of foregoing findings and conclusion reached hereinabove that petitioner was under no legal obligation to deduct tax at source under Section 195 of Act of 1961, at the rate of 5% in light of beneficial provisions of applicable Double Taxation Avoidance Agreement (DTAA) read with Section 90 (2) of Act of 1961, it is further directed that concerned authority of Income Tax Department shall refund 5% TDS amount deposited by petitioner along with applicable interest under Section 244A of Act of 1961 within a period of eight weeks from the date of this judgment.