TMI Blog2013 (10) TMI 1025X X X X Extracts X X X X X X X X Extracts X X X X ..... ng of return though the tax was already paid, would render the provision penal in nature, which the statute did not provide – In the present case, only modification, needed to adopt is that the assessee must be held to be liable to pay interest under section 234A of the Act on the difference of amount between the tax assessed and the amount which he had paid before the due date to which even the assessee has not raised any serious objection - Payment of interest on the entire amount of Rs. 14,82,941 is set aside – Revenue entitled to collect such interest under section 234A of the Act on a sum of Rs. 4,82,941 for the entire period, i.e., September 1, 1996, (after due date of filing of return) till March 27, 1998, (date on which the return was filed) – Decided in favor of Assessee. - - - - - Dated:- 18-6-2012 - AKIL KURESHI AND HARSHA DEVANI MS. JJ. JUDGEMENT Akil Kureshi J. -In this petition, the petitioner has challenged the action of the Revenue authorities in demanding interest under section 234A and 234C of the Income-tax Act, 1961 (hereinafter referred to as "the Act"). The petition arises in the following factual background. 2.1 The petitioner is an individual ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the Revenue grossly erred in raising demand of interest under section 234A of the Act for the entire amount of Rs. 14,82,941 when substantial amount out of such tax liability of the petitioner, i.e., Rs. 10 lakhs was already paid before the due date of filing of the return. Counsel submitted that the language used in section 234A of the Act would not permit such charging of interest. Interest, if recovered for the entire amount would make the provisions of section 234A penal in nature. Placing heavy reliance on the decision of the Delhi High Court in the case of Dr. Prannoy Roy v. CIT [2002] 254 ITR 755 (Delhi), counsel submitted that such an interpretation is not permissible. 4.1 Counsel pointed out that the decision of the Delhi High Court in the case of Dr. Prannoy Roy [2002] 254 ITR 755 (Delhi) was carried in appeal before the apex court by the Revenue. The apex court in the case of CIT v. Pranoy Roy [2009] 309 ITR 231 (SC) by a speaking order, upheld the decision of the Delhi High Court and approved the interpretation given to section 234A of the Act by the High Court. 4.2 Placing reliance on a decision in the case of R. B. Jodha Mal Kuthiala v. CIT [1971] 82 ITR 570 (SC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b silentio. Lastly, counsel relied on Circular No. 549, dated October 31, 1989, of the Central Board of Direct Taxes available at [1990] 182 ITR (St.) 37 wherein, while explaining the provisions contained in sections 234A, 234B and 234C, various examples have been cited to explain the working of the said provisions. Having thus heard the learned counsel for the parties and having perused the documents on record, as already noted, the sole controversy between the parties is with respect to charging of interest on residue of tax short assessed and tax paid and not on the entire sum of the tax assessed. The Revenue contends that since infraction referred to in section 234A of the Act of not having filed the return within the due date complete and since none of the exclusionary clauses provided in sub-section (1) of section 234A applies in the present case, such charging of interest for the entire amount is not only permissible but is mandatory. Section 234A of the Act, as it stood at the relevant time, read as under : "234A.(1) Where the return of income for any assessment year under sub-section (1) or sub-section (4) of section 139, or in response to a notice under sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esaid, ending on the date of furnishing the return ; or (b) where no return has been furnished, ending on the date of completion of the reassessment or re-computation under section 147, on the amount by which the tax on the total income determined on the basis of such reassessment or re-computation exceeds the tax on the total income determined under sub-section (1) of section 143 or on the basis of the earlier assessment aforesaid. (4) Where as a result of an order under section 154 or section 155 or section 250 or section 254 or section 260 or section 262 or section 263 or section 264 or an order of the Settlement Commission under sub-section (4) of section 245D, the amount of tax on which interest was payable under sub-section (1) or sub-section (3) of this section has been increased or reduced, as the case may be, the interest shall be increased or reduced accordingly, and (i) in a case where the interest is increased, the Assessing Officer shall serve on the assessee a notice of demand in the prescribed form specifying the sum payable, and such notice of demand shall be deemed to be a notice under section 156 and the provisions of this Act shall apply accordingly. (ii) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, we find no merit in this appeal and the same is dismissed." To our mind, the issue is thus squarely covered on all material aspects by the decision of the Delhi High Court in the case of Dr. Prannoy Roy [2002] 254 ITR 755 (Delhi) which came to be confirmed by the apex court in the manner noted above. The Delhi High Court, as we have noted, held that if the Revenue is allowed to recover interest on the tax which is already paid within the due date, merely because the return was not filed in time, would make the provision penal in nature and exposes it to challenge of its vires. In the present case, the assessee had already deposited tax of Rs. 10 lakhs before the due date of filing the return. The return, of course, was filed belatedly. While framing the assessment of such belated return, the Assessing Officer held that the assessee should pay further tax of Rs. 4,82,941 (after giving credit of Rs. 25,533 which was paid by way of tax deducted at source). Thus, the Revenue's demand for interest for the entire amount of Rs. 14,82,941 under section 234A would fall foul to the ratio of the decision of the Delhi High Court in the case of Dr. Prannoy Roy [2002] 254 ITR 755 (Delhi). T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s under : "Does this principle extend and apply to a conclusion of law, which was neither raised nor preceded by any consideration. In other words can such conclusions be considered as declaration of law ? Here again the English courts and jurists have carved out an exception to the rule of precedents. It has been explained as rule of sub silentio. 'A decision passes sub silentio, in the technical sense that has come to the attached to that phrase, when the particular point of law involved in the decision is not perceived by the court or present to its mind'. (Salmond on Jurisprudence, twelfth edition, page 153). In Lancaster Motor Co. (London) Ltd. v. Bremith Ltd. [1941] 1 KB 675 the court did not feel bound by earlier decision as it was rendered 'without any argument, without reference to the crucial words of the rule and without any citation of the authority'. It was approved by this court in Municipal Corporation of Delhi v. Gurnam Kaur [1989] 1 SCC 101. The Bench held that, 'precedents sub-silentio and without argument are of no moment'. The court thus have taken recourse to this recourse to this principle for relieving from injustice perpetrated by unjust precedents. A deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s plea that there is scope for double levy of interest ; (i) for non-payment of advance tax for which interest is chargeable under section 234B of the Act, and (ii) for delay in payment of the amount of interest, if any, payable in terms of section 245D(2C) or section 246D(6A) needs to be considered. There can be no dispute that double levy of interest is not permissible. But this principle is applicable only when the interest is chargeable more than once for same set of infractions. If the provisions under which interests are charged operate in different fields, there is no statutory bar on levying the interest, because in essence it does not amount to double levy of interest but levy of interest separately for different infractions. Section 234B, section 245D(2C) and section 245D(6A) operate in different fields. Section 234B comes into operation when there is default in payment of advance tax. Liability to pay interest under section 245D(2C) arises when additional amount of income-tax is not paid within time specified under sub-section (2A). Section 245D(6A) fastens liability to pay interest when tax payable in pursuance of an order under sub-section (4) is not paid within the sp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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