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2015 (1) TMI 200

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....declaring total income of Rs. 54,15,971/for the Assessment Year 1998-99. The assessments were taken under scrutiny and the Assessment Officer vide its order, determined the total income of assessee of Tax Appeal No.676 of 2006 at Rs. 68,76,282/. Against this order, the assessee filed appeal before the CIT(A). The CIT(A) vide its order dated 22.06.2001, allowed the appeal of the assessee. Against the said order, the revenue has filed an appeal before the Incometax Appellate Tribunal being ITA No.1892/Ahd/2001 and the Tribunal has dismissed the appeal preferred by the Revenue. 5. While admitting Tax Appeal No.676/2006, following substantial questions of law arose for the determination of this Hon'ble Court;               "(A) Whether on the facts and in the circumstances of the case, and in law, the Income Tax Appellate Tribunal is right in deleting interest charged under Sections 234B and 234C of the Income Tax Act on the income charged to tax under the provisions of Section 115JA of the Income Tax Act?" 6. Before proceeding with the matters, we would like to discuss Sections 234B and 234C of the Income Tax Ac....

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....p;      [Explanation 3.In Explanation 1 and in subsection (3) "tax on the total income determined under subsection (1) of section 143" shall not include the additional Income tax, if any, payable under section 143.] (2) Where, before the date of [determination of total income under subsection (1) of section 143 or] completion of a regular assessment, tax is paid by the assessee under section 140A or otherwise,*           (i) interest shall be calculated in accordance with the foregoing provisions of this section up to the date on which the tax is so paid, and reduced by the interest, if any, paid under section 140A towards the interest chargeable under this section;           (ii) thereafter, interest shall be calculated at the rate aforesaid on the amount by which the tax so paid together with the advance tax paid falls short of the assessed tax. (3) Where, as a result of an order of reassessment or recomputation under section 147 [or section 153A], the amount on which interest was payable under subsection (1) is increased, the assessee shall be liable to pay simp....

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....is less than seventy five per cent of the tax due on the returned income, then, the company shall be liable to pay simple interest at the rate of [one] per cent per month for a period of three months on the amount of the shortfall from fifteen per cent or forty five per cent or seventy five per cent , as the case may be, or the tax due on the returned income;          (ii) the advance tax paid by the company on its current income on or before the 15th day of March is less than the tax due on the returned income, then, the company shall be liable to pay simple interest at the rate of [one] per cent on the amount of the shortfall from the tax due on the returned income:]             [Provided that nothing contained in this subsection shall apply to any shortfall in the payment of the tax due on the returned income where such shortfall is on account of underestimate or failure to estimate Page  (a) the amount of capital gains; or (b) income of the nature referred to in subclause (ix) of clause (24) of section 2, and the assessee has paid the whole of the amount of tax payable in respe....

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....r from reading Sections 115JA and 115JB that the question whether a company which is liable to pay tax under either provision does not assume importance because specific provision(s) is made in the section saying that all other provisions of the Act shall apply to the MAT Company (Section 115JA(4) and Section 115JB(5)). Similarly, amendments have been made in the relevant Finance Acts providing for payment of advance tax under Sections 115JA and 115JB. So far as interest leviable under Section 234B is concerned, the section is clear that it applies to all companies. The prerequisite condition for applicability of Section 234B is that assessee is liable to pay tax under Section 208 and the expression "assessed tax" is defined to mean the tax on the total income determined under Section 143(1) or under Section 143(3) as reduced by the amount of tax deducted or collected at source. Thus, there is no exclusion of Section 115J/115JA in the levy of interest under Section 234B. The expression "assessed tax" is defined to mean the tax assessed on regular assessment which means the tax determined on the application of Section 115J/115JA in the regular assessment." 8. Relying on the above s....

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....sp;    3. Tax Appeal since raises no other question of law, same requires no further consideration. Tax Appeal is dismissed. 9. The said issue is also decided by the decision of Hon'ble Punjab and Haryana High Court in the case of Swaraj Mazda Ltd. V. Commissioner of Incometax, where the issue was whether the assessee was liable to pay interest under sections 234B and 234C in respect of tax determined on basis of Section 115JA was answered in favour of the revenue as under: "...               2. ITA No.406 of 2005 has been preferred by the assessee under Section 260A of the Incometax Appellate Tribunal, Chandigarh Bench (for brevity, :the Tribunal") in ITA No.805/CHD/2000, for the Assessment Year 1998-99, claiming following substantial questions of law:"         ( i) Whether under the facts and circumstances of the case on the true and correct interpretation of the provisions of Section 115JA the interest under Sections 234B and 234C is to be charged under Section 143(1) (a) as a prima facie adjustment whereby no such charge made under Section 143(3)?  &n....