TMI Blog2006 (11) TMI 363X X X X Extracts X X X X X X X X Extracts X X X X ..... A(4) providing that all other provisions of the Act shall apply which assumes significance in view of there being no such provision in section 115J." 2. The short issue in the case before us is whether the Assessing Officer is justified in charging interest under sections 234B and 234C on the taxes levied under section 115JA of the Income-tax Act. The ld. CIT(A) has held that the Assessing Officer is not justified in charging interest under sections 234B and 234C of the Income-tax Act on the book profits computed under section 115JA. 3. Learned counsel for the assessee has invited our attention to the decision of the Hon ble Supreme Court in CIT v. Kwality Biscuits Ltd. [2006] 284 ITR 434 1 by which the decision of Karnataka Hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the provisions of section 115J could not be made applicable to defeat the express provisions enacted in the form of sub-section (4) of section 115JA. 5. We have heard the parties and considered their submissions. Sub-section (1) of section 115JA contains a deeming provision by which an amount equal to 30% of book profit is deemed to be the total income of an assessee, being a company, if its total income as computed under the Income-tax Act is less than 30% of its book profit. Sub-section (2) of section 115JA provides the mechanism for computation of book profit. Sub-section (3) of section 115JA contains provisions for determination of the amount in relation to the relevant previous year to be carried forward to the subsequent years. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able to the assessees falling under section 115JA. 6. Next issue for consideration is as to whether the provisions relating to payment of advance tax under section 207 of the Income-tax Act and payment of interest for defaults or deferment in payment of advance tax as contained in sections 234B and 234C are applicable to an assessee falling under section 115JA. Chapter XVII of the Income-tax Act deals with collection and recovery of taxes. Part "C" of Chapter XVII of the Income-tax Act deals with advance payment of tax while Part "F" of Chapter XVII deals with chargeability of interest in certain cases. It is therefore quite clear that the provisions relating to advance payment of tax and chargeability of interest on account of default ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same consequence as any total income computed under the Income-tax Act is required to suffer. This view is further supported by the provisions of section 2( 45 ) of the Income-tax Act, which defines "total income" as meaning "the total amount of income referred to in section 5, computed in the manner laid down in this Act". Section 5 of the Income-tax Act defines scope of total income and provides that the total income of any previous year includes all income, which accrues or arises or is deemed to accrue or arise in India during the previous year. Therefore the income computed under section 115JA is total income within the meaning of section 2( 45 ) read with section 5 of the Income-tax Act. Section 207 of the Income-tax Act creates l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessed tax. In such a case section 234B mandates that the assessee shall be liable to pay simple interest at the prescribed rate for every month of default. The term assessed tax has been defined in Explanation 1 to section 234B(1) of the Income-tax Act to mean the tax on the total income determined under sub-section (1) of section 143 or on regular assessment as reduced by the amount of tax deducted or collected at source in accordance with the provisions of Chapter XVII on any income which is subject to such deduction or collection and which is taken into account in computing such income. The total income computed on the basis of a specified percentage of book profit is assessed to tax under section 143(1) or under section 143( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n assessee falling under the said section. 10. As regards the decision of the Hon ble Karnataka High Court in Kwality Biscuits Ltd. ( supra ) against which the appeal filed before the Hon ble Supreme Court has been dismissed, it may be relevant to mention that the said judgment was rendered in the context of the provisions of section 115JA of the Income-tax Act which has ceased to be effective from the assessment year 1991-92. In section 115J, there was no provision similar to sub-section (4) in section 115JA or sub-section (5) in section 115JB. In this view of the matter, the express provisions contained in section 115JA(4) or sub-section (5) of section 115JB cannot be ignored. In Jindal Thermal Power Co. Ltd. s case ( supra ), the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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