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Commissioner of Income-Tax, Assistant Commissioner of Income-Tax Versus M/s Natraj Engineers (P) Ltd.

2015 (11) TMI 433 - PATNA HIGH COURT

Interest under Sections 234B and 234C - contention of the assessee was that the interest should have been charged with reference to the income tax return and not the assessed income and further that the assessee also challenged the inclusion of demand notice with reference to the same in the assessment order - Held that:- There is a clear distinction made by the Income Tax Act in the provisions of Section 234B and 234C: with regard to interest under Section 234B, the calculation is to be made no .....

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any shortfall in deposit of advance tax in terms of the provisions of Sections 234B and 234C of the Act. Thus, we are of the view that the present matter is squarely covered in favour of the appellant revenue by the decision of the Supreme Court in Kalyan Kumar Ray's case (1991 (8) TMI 291 - SUPREME COURT ). The first substantial question of law is, accordingly, answered in favour of the Revenue and it is held that the Tribunal should have held the computation sheet and demand notice as integra .....

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t assessee. - Miscellaneous Appeal No. 466 of 2005 - Dated:- 7-9-2015 - Ramesh Kumar Dutta And Sudhir Singh, JJ. For the Appellant : Mrs. Archana Sinha, Sr. Standing Counsel, I.T. Dept. with Mr. Alok Kumar & Mrs. Vijay Laxmi Srivastava, Advs For the Respondent : Mr. Sanjeev Kumar, Adv JUDGMENT ( Per: Honourable Mr. Justice Ramesh Kumar Datta ) Heard learned counsel for the appellants-Revenue and learned counsel for the respondent-Assessee. The appeal has been filed against the order dated 15 .....

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speak about the charging of any interest under Sections 234B and 234C. Vide ITNS 150 computation form, the amount of interest under Sections 234B and 234C were also shown. The appellants challenged the assessment order including charging of interest under Sections 234B and 234C under the ITNS 150 form. The contention of the assessee was that the interest should have been charged with reference to the income tax return and not the assessed income and further that the assessee also challenged the .....

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ax Appellate Tribunal. The ITAT reversed the order of the CIT appeal holding that there is nothing in the order to show that the Assessing Officer has decided to charge interest under Sections 234B and 234C and thus following the decision of the Supreme Court in the case of Ranchi Club Limited vs. Commissioner of Income-tax : (2001) 247 ITR 209 (SC) it held that the interest under Sections 234B and 234C cannot be charged in absence of any order of the Assessing Officer and so the interest charge .....

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retrospective effect from 1.4.1989 the case decided by the Hon'ble Supreme Court in 247 ITR page 209 and relief by the Tribunal could be said to be still applicable as the amendment makes the charging of interest mandatory and not directory?" So far as the first question is concerned, learned counsel for the Revenue relies upon a decision of the Apex Court in the case of Kalyan Kumar Ray vs. Commissioner of Income-Tax : 191 ITR 634 (SC), at page 638 of which, it has been held as follow .....

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a process which is mostly arithmetical but generally time-consuming. If, therefore, the Income-tax Officer first draws up an order assessing the total income and indicating the adjustments to be made, directs the office to compute the tax payable on that basis and then approves of it, either immediately or some time later, no fault can be found with the process, though it is only when both the computation sheets are signed or initialed by the Income-tax Officer that the process described in sec .....

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.S. 65). The other is what is described as the "Income-tax Computation Form" or "Form for Assessment of Tax/Refund" (I.T.N.S. 150). The practice is that, after the "assessment order" is made by the Income-tax Officer, the tax is calculated and the necessary columns of I.T.N.S. 150 are filled up showing the net amount payable in respect of the assessment year. This form is generally prepared by the staff but it is checked and signed or initialed by the Income-tax Off .....

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come-tax Officer, determining the tax payable, within the meaning of section 143(3). It may be, as stated in CIT v. Himalaya Drug Co. [1982] 135 ITR 368 (All), only a tax calculation form for departmental purposes as it also contains columns and code numbers to facilitate computerization of the particulars contained therein for statistical purposes but this does not detract from its being considered as an order in writing determining the sum payable by the assessee. We are unable to see why this .....

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t; Learned counsel for the Revenue further relies upon a recent decision of the Apex Court by order dated 6.8.2015 in Civil Appeal No. 1169/2006 (Commissioner of Income Tax V. M/s. Bhagat Construction Company Private Limited) in which both the substantial questions of law as raised herein, according to leaned counsel, have been answered in favour of the revenue and against the assessee. The relevant part of the said decision is as follows:- "It will be seen that under the provisions of Sect .....

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y covered by the decision contained in Kalyankumar Ray's case inasmuch as it is undisputed that contained a calculation of interest payable on the tax assessed. This being the case, it is clear that as per the said judgment, this Form must be treated as part of the assessment order in the wider sense in which the expression has to be understood in the context of Section 143, which is referred to in Explanation 1 to Section 234B. This being the case, we set aside the judgment of the High Cour .....

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f M/s. Bhagat Construction Company Pvt. Ltd. (supra) and it was explained that the High Court judgment was given in the context of challenge to the vires of Sections 234A and 234B of the Income Tax Act and ultimately it has been held in the said case that under the provisions of Section 234B where the advance tax paid by the assessee is less than 90% of the assessed tax, levy of such simple interest at the rate of one per cent for every month or part of the month is automatic. We may here also p .....

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-section (1) of Section 143 or on regular assessment as reduced by the amount of tax in accordance with the provisions of Chapter XVIII on any income which is subject to such deduction or collection and which is taken into account in computing such total income." The said provision has further been amended by the Finance Act, 2006 with effect from 1.4.2007 which however, is not relevant for ever purpose. It is evident from the aforesaid Explanation introduced by the Finance Act, 2001 that t .....

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