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TMI Blog2010 (6) TMI 586X X X X Extracts X X X X X X X X Extracts X X X X ..... visions of the Act under sub-section (4) of the said section which would include sections 234B and 234C of the Act ? (2) Whether the Tribunal should have taken into consideration the object of introducing the new provisions of section 115JA of the Act, the Finance Act pertaining to the assessment year 1997-98 and the Board Circular which clearly contemplated that under the new provisions, levy of interest under sections 234B and 234C of the Act was mandatory ?" 2. The brief facts of the case are that the respondent-assessee herein filed its return of income for the assessment year 2001-02. After scrutiny, the Assessing Officer passed the order dated January 27, 2002, under section 143(1) of the Income-tax Act ("the Act" for short), determining the total income. When things stood, on a perusal of the records and the order, it was found that the said authority had omitted to charge interest under sections 234B and 234C of the Act. Therefore, the authority issued notice under section 154 of the Act for rectification of the said assessment order. After receipt of the notice issued under the Act, the assessee filed its reply stating that interest under sections 234B and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reasoning cannot be sustained and is vitiated in view of sub-section (4) of section 115JA which is also in pari materia with sub-section (5) of section 115JB which have been inserted with effect from April 1, 1997, and April 1, 2001, respectively. To substantiate the said submission, he has taken us through the order of the first appellate authority, wherein the authority has considered the two questions of law raised by the assessee and held that the levy of interest under sections 234B and 234C being debatable, section 154 could not be invoked. Further, the appellate authority also recorded that the assessee's income was assessable under section 115JA of the Act and that it is only the context of section 115JB, the Central Board of Direct Taxes had issued Circular No. 13 of 2001 ([2001] 252 ITR (St.) 50) as per which the companies covered by the provisions of section 115JB are liable to pay advance tax, in which event, the provisions of sections 234B and 234C of the Act were applicable and the first appellate authority had rightly confirmed the order of the Assessing Officer. However, the Tribunal was not right in holding that the ratio of the decision in the case of Kwality Bisc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e authority and, hence, the matter may be reconsidered by the Assessing Officer. 5. After hearing the learned counsel appearing for the parties and on perusal of the orders passed by the authorities, the substantial question of law that has to be answered is, as to whether the decision of this court in the case of Kwality Biscuits [2000] 243 ITR 519 (Karn) applies to the case of the assessee herein. 6. In respect of the assessment year 2001-02, the assessment order was completed on January 27, 2002. However, the Assessing Officer noticed that interest under sections 234B and 234C has been omitted to be charged on the assessee and notice under section 154 was issued. In reply, the assessee had contended that interest under sections 234B and 234C was not chargeable, in view of the decision of this court in the case of Kwality Biscuits [2000] 243 ITR 519 (Karn). The Assessing Officer noted that the said decision was rendered under section 115J. But held that the case of the assessee related to section 115JA wherein sub-section (4) specifically provided that all other provisions of the Act would apply. He, accordingly, rejected the contention of the assessee and rectifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot found in section 115J the ratio of the decision of this court in Kwality Biscuits' case [2000] 243 ITR 519 (Karn) was applicable to assessment made under section 115JA and, accordingly, allowed the appeal. It is the said order which is challenged in this appeal. 8. At the outset it is necessary to clarify that the case of the assessee falls under section 115JB and not under section 115JA of the Act as submitted by the assessee's counsel. However, in both sections 115JA as well as in section 115JB of the Act a saving clause has been incorporated which is in the following words : "Save as otherwise provided in this section, all other provisions of this Act shall apply to every assessee being a company, mentioned in this section." 9. The said saving clause is in sub-section (4) of section 115JA and sub-section (5) of section 115JB of the Act. It is relevant to note that, the decision of this court in the case of Kwality Biscuits [2000] 243 ITR 519 (Karn) was rendered under section 115J wherein such a saving clause is not incorporated. This court, in the case of Kwality Biscuits [2000] 243 ITR 519 (Karn), raised one of the substantial questions of law as foll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and, therefore, the provisions regarding interest are applicable to the assessee. In the case of Kwality Biscuits [2000] 243 ITR 519 (Karn), this court, while considering the said aspect under section 115J of the Act, noted that it is only a deemed income which is taken into consideration under section 115J and in the absence of any specific provisions being made applicable the same could not be applied by creating a further deeming fiction and it is in that context held that interest under sections 234B and 234C was not leviable when the case of the assessee falls under section 115J. However, under section 115JA as well as under section 115JB, there are specific provisions making applicable other provisions of the Act to an assessee being a company coming under the relevant sections. In view of the specific provision, particularly, under section 115JB under which the case of the present assessee falls we hold that the ratio of Kwality Biscuits [2000] 243 ITR 519 (Karn) cannot apply to the case of the assessee herein which is covered under section 115JB of the Act, wherein sub-section (5) makes all other provisions of the Act applicable. 13. When a specific provision of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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