9911796707
TMI Blog2005 (8) TMI 303X X X X Extracts X X X X X X X X Extracts X X X X ..... ting to Rs. 1,89,437. The income so declared was accepted bythe Assessing Officer while processing the return filed by the assessee under section 143(1)(a). However, considering that no advance tax was paid by the assessee-company on the said income, the Assessing Officer levied interest of Rs. 6,11,074 and Rs. 3,19,230 under sections 234B and 234C respectively in the intimation issued under section 143(1)(a). According to the assessee-company, interest under sections 234B and 234C was not chargeable when its income was computed on the basis of book profit under section 115JA and since it was of the view that the intimation issued by the Assessing Officer under section 143(1)(a) had suffered a mistake apparent from record in charging such interest, application under section 154 was moved by it seeking rectification of the said mistake. In the proceedings under section 154 before the Assessing Officer, the levy of interest under sections 234B and 234C was assailed on behalf of the assessee raising various contentions and it was urged that the mistake in charging interest under sections 234B and 234C be rectified by modifying the intimation issued under section 143(1)(a). The Assessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 999 whereby clause (a) of the said sub-section had been omitted. He contended that the question of any determination of liability towards interest under section 234B or 234C otherwise than as shown by the assessee in the return was beyond the scope and ambit of sub-section (1) of section 143 as substituted with effect from1-6-1999. In support of this contention, he relied on the decision of the Hon'ble Rajasthan High Court in the case of CIT v. Smt. Premlata Jalani [2003] 264 ITR 744 wherein it was held that the claim for enhanced interest under section 234C could not be made under section 143(1) as amended with effect from 1-6-1999. His contention, therefore, was that there was a mistake on the part of the Assessing Officer in charging interest under sections 234B and 234C in an intimation issued after 1-6-1999 in view of the provisions of section 143(1) as substituted with effect from 1-6-1999 and the same being apparent from record, ought to have rectified by the Assessing Officer by accepting the application filed by the assessee under section 154. He also invited our attention to the CBDT circular explaining the amendment proposed in section 143 reported in 240 ITR 3 (St.) and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he issue of charging of interest under sections 234B and 234C for the failure of the assessee to pay the advance tax in respect of income computed under section 115JA is not debatable. In support of this contention, he has relied on the decision of Delhi 'F' Bench of ITAT in the case of Insilco Ltd. v. Joint CIT [2004] 85 TTJ 538 wherein it was held that provisions of payment of advance tax were fully applicable to the deemed income under section 115JA and the Assessing Officer, therefore, was fully justified in charging such interest in the intimation issued under section 143(1)(a). He also placed reliance on the decision of the Hon'ble Punjab & Haryana High Court in the case of CIT v. Upper India Steel Mfg. & Engg. Co. Ltd. [2004] 141 Taxman 692 wherein charging of interest under sections 234B and 234C by way of prima facie adjustment under section 143(1)(a) was upheld by the Hon'ble Punjab & Haryana High Court observing that advance tax being payable on the income computed under section 115JA, provisions of sections 234B and 234C were attracted. 6. In the rejoinder, the learned counsel for the assessee submitted that the decision of Delhi Bench of ITAT in the case of Insilco Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... charging of interest under section 234B while determining the income of the assessee under section 115JA on the basis of book profit is not a debatable issue and the Assessing Officer was right in making prima facie adjustment in respect of such interest under section 143(1)(a). To the similar effect is the decision of Delhi 'E' Bench of ITAT in the case of Som Distilleries & Breweries Ltd. v. Joint CIT [IT Appeal No. 4047 (Delhi) of 2000, dated 1-6-2004] to which one of us (Accountant Member) is a party wherein it was held that it was incumbent upon the assessee-company to estimate its total income under the Income-tax Act or its book profit for the purpose of computation of its income under section 115JA and to pay advance tax of such income and having failed to do the same, interest under sections 234B and 234C, which is automatic and mandatory, was rightly levied by the Assessing Officer in the intimation issued under section 143(1)(a). 8. The contention of the learned counsel for the assessee, however, is that the assessment year involved in the present case being 1999-2000, the provisions of section 143(1) as substituted with effect from1-6-1999are applicable and not the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any determination as to the liability of interest on the tax otherwise than as per the claims made by the assessee was not within the scope of sub-section (1) of section 143 as applicable to the assessment year 2000-01. 9. A careful reading of the aforesaid decision of the Hon'ble Rajasthan High Court in the case of Smt. Premlata Jalani shows that the facts involved in the said case were entirely different from the facts involved in the present case. First of all, the issue relating to charging of interest under section 234C was found to be debatable in the peculiar facts involved in the said case inasmuch as the capital gain having arisen to the assessee in the relevant year, she was held to be liable to pay advance tax by the Assessing Officer right from the due date of first instalment i.e. 15-9-1999 whereas the stand of the assessee was that the said capital gain having arisen to her only after the due date of last instalment of advance tax i.e. 15-3-2000, she was liable to pay the advance tax after 15-3-2000 but before 31-3-2000. Secondly, liability towards interest under section 234C was worked out by the assessee herself in the return filed in the said case and the questio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ana High Court, therefore, upheld the prima facie adjustment made by the Assessing Officer under section 143(1)(a) charging such interest payable by the assessee under sections 234B and 234C. 11. Before us, the learned counsel for the assessee has submitted that the decision of the Hon'ble Punjab & Haryana High Court in the case of Upper India Steel Mfg. & Engg. Co. Ltd. cannot be applied in the present case in view of the provisions of section 143(1) as substituted with effect from1-6-1999. He has contended that although the said provisions were applicable to one of the three years involved in the said case i.e., assessment year 1999-2000, the Hon'ble Punjab & Haryana High Court failed to consider the same having material effect on the issue under consideration. In this regard, it is observed that the provisions of section 143(1)(a) as applicable up to assessment year 1998-99 were reproduced by the Hon'ble Punjab & Haryana High Court in its judgment delivered in the case of Upper India Steel Mfg. & Engg. Co. Ltd. at page 389 of the report as under:- "143(1)(a). Where a return has been made under section 139, or in response to a notice under sub-section (1) of section 142,- (1) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the income or loss declared in the return. These adjustments clearly relate to the determination of quantum of income or loss. Levy of tax or interest does not amount to adjustment in the income or loss declared in the return. The Tribunal, in our opinion, has committed the basic mistake of treating the levy of interest under sections 234B and 234C of the Act at par with the adjustments envisaged under this proviso. Thus, the tests applicable to examine the validity of adjustments permissible under section 143(1)(a) of the Act have been wrongly applied by the Tribunal for quashing the levy of interest under sections 234B and 234C of the Act. The Tribunal was required to resolve the issue solely on merits and could not have granted the relief on the ground that the issue was debatable." 13. As is evident from the aforesaid observations recorded by the Hon'ble Punjab & Haryana High Court, the issue relating to levy of interest under sections 234B and 234C by way of prima facie adjustment under section 143(1)(a) was considered and decided by their Lordships having regard to clause (1) of section 143(1)(a). It is interesting to note here that even in sub-section (1) of section 143 as ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
