TMI Blog2014 (2) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... n and rightly quashed the order of the Commissioner of Income-tax under section 263 of the Act - Decided in favour of assessee. - D. B. Income Tax Appeal No 487 of 2011. - - - Dated:- 22-1-2013 - NARENDRA KUMAR JAIN, JAINENDRA KUMAR RANKA, JJ JUDGMENT Jainendra Kumar Ranka J.- The instant appeal has been preferred by the Commissioner of Income-tax, Kota, for the assessment year 2000-01, assailing the order dated February 28, 2006, passed by the learned Incometax Appellate Tribunal, Jaipur Bench, Jaipur (In short "the ITAT"), for quashing the order under section 263 of the Income-tax Act, 1961, in short ("the Act"). The brief facts of the case are given here under : The respondent-company being a limited company filed its return on November 30, 2000, declaring nil income and paid taxes of Rs. 17,17,98,327 under minimum alternate tax) (in short "MAT") on book profit under section 115JA of the Act. The return was processed under section 143(1)(a) by the Assessing Officer on March 30, 2001, and the tax/MAT was also computed by the Assessing Officer on the book profit disclosed by the respondent at Rs. 16,03,07,717. In view of the payment of excess tax paid under M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tant appeal under section 260A of the Act. The appellant has raised and claimed that the following substantial questions of law arise out of the order of the learned Income-tax Appellate Tribunal : "(1) Whether, on the facts and in the circumstances of the case and in law, the Tribunal was legally justified in setting aside the order passed by the learned Commissioner of Income-tax under section 263 by holding that the same was not warranted ? (2) Whether the findings of the Tribunal are perverse in holding that the proviso to section 115JAA(2) was not applicable in the facts and circumstances of the case ? (3) Whether the Tribunal was legally justified in upholding the order of the Assessing Officer of allowing interest under section 244A ? and (4) Whether the Tribunal was justified in holding that section 263 was not warranted as it was simply a case of wrong recomputation of interest and an error apparent from the face of record ?" Learned counsel for the appellant, Mrs. Parinitoo Jain, has drawn our attention to the order of the learned Income-tax Appellate Tribunal as well as to the order of the learned Commissioner of Income-tax, Kota, and has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act, which reads as under : "207. Tax shall be payable in advance during any financial year, in accordance with the provisions of sections 208 to 219 (both inclusive), in respect of the total income of the assessee which would be chargeable to tax for the assessment year immediately following that financial year, such income being hereafter in this Chapter referred to as 'current income'. 208. Advance tax shall be payable during a financial year in every case where the amount of such tax payable by the assessee during that year, as computed in accordance with the provisions of this Chapter, is 'ten thousand rupees or more." Section 209 of the Act provides that for making calculation for the purpose of advance tax, the assessee shall first estimate its current income and apply that rate of tax of income on that current income. Section 207, as quoted above, provides that advance tax is payable in respect of the "total income" which is also referred as "current income". In the case of the respondent-company itself, the appellant-Department in the earlier years was charging interest under section 234B and section 234C of the Act in respect of deemed income un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Revenue on the above analogy and thus quashed the order under section 263. We have heard the learned counsel, Mrs. Parinitoo Jain, at length and after hearing her, come to the conclusion that no substantial question of law arises out of the order of the learned Income-tax Appellate Tribunal particularly, in view of the fact that the hon'ble apex court in the case of Joint CIT v. Rolta India Ltd. [2011] 330 ITR 470 (SC) had considered the issue with reference to interest under section 234B of the Act on the applicability of the MAT provisions under section 115JA of the Act and after detailed analysis held at page 478 as under : "The question which remains to be considered is whether the assessee, which is a MAT company, was not in a position to estimate its profits of the current year prior to the end of the financial year on 31st March. In this connection the assessee placed reliance on the judgment of the Karnataka High Court in the case of Kwality Biscuits Ltd. v. CIT reported in [2000] 243 ITR 519 and, according to the Karnataka High Court, the profit as computed under the Income-tax Act, 1961 had to be prepared and thereafter the book profit as contemplated under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which imposed liability for payment of advance tax on MAT companies and, therefore, where such companies defaulted in payment of advance tax in respect of tax payable under section 115JB, it was liable to pay interest under sections 234B and 234C of the Act. Thus, it can be concluded that interest under sections 234B and 234C shall be payable on failure to pay advance tax in respect of tax payable under section 115JA/115JB. For the aforestated reasons, Circular No. 13 of 2001 dated November 9, 2001 issued by the Central Board of Direct Taxes reported in [2001] 252 ITR (St.) 50 has no application. Moreover, in any event, para. 2 of that Circular itself indicates that a large number of companies liable to be taxed under the MAT provisions of section 115JB were not making advance tax payments. In the said circular, it has been clarified that section 115JB is a self-contained code and thus, all companies were liable for payment of advance tax under section 115JB and consequently the provisions of sections 234B and 234C imposing interest on default in payment of advance tax were also applicable. For the aforestated reasons the Commissioner of Income-tax succeeds in the civil appeal a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, it has been stated on behalf of the Revenue during the course of the hearing that the answer to the second question would be consequential to the determination of the first question. Consequently, the second question shall stand answered in favour of the assessee and against the Revenue." The hon'ble Karnataka High Court in the case of CIT v. Vijaya Bank [2011] 338 ITR 489 (Karn), under identical circumstances held that the MAT provisions were applicable and the hon'ble court observed as under (page 494): "Therefore, the object behind the insertion of section 244A, as understood by the Department, is that an assessee is entitled to payment of interest for money remaining with the Government which would be ordered to be refunded. Therefore, if that is the object behind the insertion of section 244A, the contention of the Revenue that if the case does not fall under either of the clauses in section 244A, no interest is payable, is without any substance. Clauses (a) and (b) specifically refer to the instances where interest is paid under the Act. It is not exhaustive. It is possible, in a given case, that after the expiry of the financial year, the assessee may pay t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... illegality nor any case for interference is made out. The substantial question of law is answered in favour of the assessee and against the Revenue. The appeal stands dismissed. No costs." We have gone through the language of sections 234A, 234B and 234C of the Act as well as the language of section 244A and we feel that the language is almost the same in all the above sections inasmuch as while in sections 234A, 234B and 234C, the Department is entitled to charge/levy interest in case, there is short fall of payment of advance tax or otherwise, however, in case the assessee has deposited the excess amount by way of advance tax or TDS the assessee thus, become entitled to grant of interest under section 244A of the Act. Revisional powers conferred on the Commissioner under section 263 of the Act is wide, it enables the Commissioner of Income-tax to call for and examine the record of the case or pass any order under the Act and also empowers him to make or cause to be made such an inquiry as he deems fit and necessary in order to find out, if the order passed by the Assessing Officer is erroneous in so far as it is prejudicial to the interests of the Revenue, however, he has to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal is concerned, when it has been decided by the hon'ble apex court in the case referred to above (supra), having been covered, as such, the Assessing Officer was quite justified in allowing the interest under section 244A of the Act. We have extracted the proposed substantial questions of law herein above and in question (ii), the issue which has been raised about the applicability of the proviso to section 115JAA(2) of the Act, however, the said proviso is not applicable in so far as this matter is concerned, firstly, the present appeal relates to the assessment year 2000-01 when section 115JA was applicable and, secondly, the proviso to section 115JAA itself came to be introduced from April 1, 2006, therefore, even otherwise, question No. (ii) is misconceived and not relevant to the year under appeal. Therefore, even otherwise, the Commissioner of Income-tax while invoking the provisions of section 263 was not correct in drawing analogy of section 115JAA and its proviso which even otherwise was not applicable for the year under appeal. The Legislatures in its own wisdom have not enacted such proviso or bar for payment of interest in excess deposit under section 115JA of the ..... 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