TMI Blog2011 (12) TMI 319X X X X Extracts X X X X X X X X Extracts X X X X ..... holding that the decision of the Supreme Court in the case of CIT v. Anjum M.H. Ghaswala (252 ITR 1) applies to the facts of the case. 4. The learned CIT(A) has failed to appreciate that the provisions of sec. 234B 234C come into play only if there existed advance tax liability u/s. 208 of the IT Act. 5. Advance tax liability u/s. 208 r.w.s. 207 arises only if the 'current income' and not the assessed income subject to advance tax liability. There existed no advance tax liability as the tax on current income is fully covered by TDS. 6. The learned CIT(A) has omitted to consider the fact that the liability to the advance tax arose only on account of the insertion of explanation u/s. 80IA of the IT Act inserted by Finance Act, 2007 after the end of the instant previous year. 7. The learned CIT(A) has erred in mechanically concurring with the conclusions of the Assessing Officer that the case law cited was distinguishable. 8. For these and any other grounds that may be urged at/before the date of hearing it is prayed that the interest charged u/s. 234B and 234C be deleted. 3. Brief facts of the issue are that the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... powers of the Settlement Commission to reduce or waive interest u/s. 234B of the IT Act wherein the Supreme Court held that the Settlement Commission has no power to reduce or waive the interest u/s. 234B of the IT Act as section 234B is mandatory unlike the corresponding earlier provisions. The Supreme Court had observed that u/s. 234B the word used in the provision is shall as against the word may used in the corresponding sections before the Finance Act, 1987. He submitted that the question in this case is whether the provisions of section 234B are applicable but not about the mandatory nature of the provisions of section 234B of the Act. 4.1 The learned counsel for the assessee submitted that the assessee filed its return of income on 30.11.2006 that is before the insertion of explanation u/s. 80IA by Finance Act 2007 claiming deduction u/s. 80IA(4) of the Act at ₹ 37,20,19,888. By virtue of the Explanation inserted in the Finance Act, 2007 clarification was made that a contractor of the eligible enterprise would not be eligible for deduction u/s. 80IA of the Act. It was stated in the Memorandum explaining the Finance Bill that this explanation was by way of cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e charged for the financial year before amendment was made albeit retrospective. 4.5 In the case of Sun Petro Chemicals (P.) Ltd. v. ITO the ITAT Ahmedabad 'B' Bench considered similar issue in I.T.A. No. 1010/Ahd/2009 for the A.Y. 2006-07 wherein the amendment of the Explanation u/s. 115JB by Finance Act 2008 with retrospective effect from 1.4.2001 was considered. The amendment was regarding the deferred tax debited to Profit and Loss A/c.. The Bench held that the assessee was not liable to interest u/s. 234B of the Act and that administrative relief can be obtained by the assessee cannot erode the powers of the Tribunal while dealing with a valid appeal before it. 4.6 The learned counsel for the assessee further relied on the decision of Delhi Bench of this Tribunal in the case of Royal Jordanian Airlines v. Dy. DIT [2008] 25 SOT 270/[2010] 126 ITD 289 for the proposition that section 234B cannot be invoked so long as the assessee was under the bona-fide belief on the basis of a decision of the Tribunal before it was reversed. The observations of the Assessing Officer and mechanical endorsement of the CIT that the decision as not applicable is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessed tax would be tax on total income determined u/s. 143(1) or 143(3) of the Act as reduced by certain amount mentioned therein. It would be appropriate to reproduce Explanation (1) to section 234B, which is as under: [ Explanation 1 - In this section, assessed tax means the tax on the total income determined under sub-section (1) of section 143 and where a regular assessment is made, the tax on the total income determined under such regular assessment as reduced by the amount of - ( i ) any 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 total income; ( ii ) any relief of tax allowed under section 90 on account of tax paid in a country outside India; ( iii ) any relief of tax allowed under section 90A on account of tax paid in a specified territory outside India referred to in that sections. ( iv ) any deduction, from the Indian income-tax payable, allowed under section 91, on account of tax paid in a country outside India; and ( v ) any tax cre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the income as determined by the assessing authority minus the income on which the tax has been paid or deducted. The amendment is only calculated to clarify the ambiguity that was felt in the original provision. It is not arbitrary or unreasonable ......'. The judgments relied upon by the assessee are distinguishable as the effect of amendment by Finance Act, 2001 was not under consideration in those cases. In view of clear provision incorporated in the Explanation and judgment of this Court in Parkash Agro's case [2009] 316 ITR 149 (P H), chargeability of interest is beyond question. 5.2 Further, in the case of Jacob Export House v. CIT [2011] 330 ITR 53/199 Taxman 147/10 taxmann.com 107 (P H) the court held as follows: The assessee did not pay advance tax in accordance with the provisions of section 208 of the Income-tax Act, 1961, on the ground that its income was not liable to be taxed in view of the provisions under sections 80HHC and 80-IB of the Act. The claim of the assessee was not accepted by the Assessing Officer and demand of interest was raised under section 234B of the Act. The Commissioner (Appeals) upheld the plea of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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