TMI Blog2016 (9) TMI 456X X X X Extracts X X X X X X X X Extracts X X X X ..... on that the provision of Section 234D of the Act would not be applicable in this case since the assessment was completed in January 1997. The provision of Section 234D would have applied if the assessment had been completed after 01.06.2003. In our view, the issue on hand is squarely covered by the decision of this Court in CIT v. Gujarat State Financial Services Ltd.’s case [2014 (2) TMI 1218 - GUJARAT HIGH COURT] -. Hence, the Tribunal committed serious error in law in holding that interest u/s.234B should have been charged in the present case. - Decided in favour of the assessee - TAX APPEAL No. 33 of 2007 - - - Dated:- 21-7-2016 - KS JHAVERI AND G.R.UDHWANI, JJ. Mr BS Soparkar For Mrsswati Soparkar, Advocate for the Appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and S.A. Tax aggregating ₹ 1.60 Crores. After deducting the taxes and TDS amount, there was a refund of ₹ 60,22,161/. The A.O. issued intimation u/s.143(1)(a) of the Act and refund was worked out for ₹ 59,38,056/. Thereafter, the assessment order u/s.143(3) of the Act was passed on 08.01.1997 determining income of ₹ 26,15,69,680/. After the order of CIT(A), the income was revised to ₹ 23,14,72,720/. In the assessment order, interest u/s.234B was charged on the higher amount on account of the withdrawal of the refund of ₹ 59,38,056/. However, the Tribunal seriously erred in holding that interest u/s.234B should be charged on the balance amount after considering refund of ₹ 59,38,056/issued on passing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e applied with retrospective effect. In the words of the Bombay High Court : (21) The question therefore is whether the words in section 234D has a past signification. We think it does. Explanation 2 in fact supports this view. In view of the declaratory amendment to Section 234D of the Act by the addition of Explanation 2 thereto any doubt with regard to the word is having a past signification has been set at rest. In fact the context in which the word has been used also supports the view that it has a past signification. The Legislature was obviously aware that refunds must have been made in respect of previous assessment years. Despite this, the amendment did not exclude such cases from the operation of the section. A grant of refu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (23) Section 143(4) also supports our view. It reads as under : Section 143 Assessment .. .. .. xxx xxx xxx (4) Where a regular assessment under sub section (3) of this section or section 144 is made, ( a) any tax or interest paid by the assessee under subsection (1) shall be deemed to have been paid towards such regular assessment; (b) if no refund is due on regular assessment or the amount refunded under sub section (1) exceeds the amount refundable on regular assessment, the whole or the excess amount so refunded shall be deemed to be tax payable by the assessee and the provisions of this Act shall apply accordingly. It is clear therefore, that excess refund determined under section 143(3) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stated or by necessary implication. The case of the revenue is that section 234D as introduced on 1st June, 2003 was retrospective in operation by necessary implication. However, as doubts were raised about its retrospectivity, the same was clarified by adding an explanation to section 234D by Finance Act, 2012. Under the Act what is brought to tax is not the income of the assessee in the assessment year but the income of the assessee in the previous year. The liability to tax arises on account of the Finance Act which fixes the rate at which the tax is to be paid. The law to be applied is as existing on the 1st day of April of the previous year. In support the Counsel for the respondent relied upon the decision of the Supreme Court in Kar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iable to pay advance tax, failed to pay such tax or where the advance tax paid by such an assessee was less than 90 per cent of the assessed tax, the assessee becomes liable to pay simple interest at the rate of one per cent for every month or part of the month and thus, levy of such interest is automatic when the conditions of s.234B are met. 5. We have heard learned counsel for both the sides and perused the documents on record. In the present case, the assessee paid advance tax aggregating ₹ 9.00 Crores for the A.Y. 199495. There was a refund of ₹ 60,22,161/, after deducting the amounts of tax payable and TDS. The Assessing Officer issued intimation u/s.143(1) of the Act and the refund was worked out at ₹ 59,38,056/. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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