TMI Blog2006 (1) TMI 163X X X X Extracts X X X X X X X X Extracts X X X X ..... of Karnataka High Court in the case of Kwality Biscuits Ltd. vs. CIT (2000) 159 CTR (Kar) 316 : (2000) 243 ITR 519 (Kar) and the decision of Tribunal, Delhi Bench, in the case reported in Tej International (P) Ltd. vs. Dy. CIT (2000) 69 TTJ (Del) 650 submitted that interest under ss. 234B and 234C could not be charged in a case where income was computed under s. 115J or 115JB. However, the AO referred to CBDT's Circular No. 13, dt. 9th Nov., 2001 as per which interest under ss. 234B and 234C was specifically directed to be charged in a case where income was computed as per provisions of s. 115JB and accordingly rectified the order under s. 154 and charged the interest under ss. 234B and 234C amounting to Rs. 56,614 and 46,360, respectively. 3. Being aggrieved, the assessee filed an appeal against the order of AO before the CIT(A). It was argued before the CIT(A) that exercise of computing the income as per provisions of s. 115JB could be made only after the close of the accounting year and, therefore, the assessee could not ascertain the liability for advance tax at the time when the same was due. Reliance was placed on the judgment of Karnataka High Court in the case of Kwality ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R 1 (SC) and Kerala High Court in the case of ITO vs. Travancore Rayons Ltd. (1980) 14 CTR (Ker) 151 : (1980) 122 ITR 425 (Ker). He further relied on the Judgment of Punjab Haryana High Court in the case of CIT vs. Rajesh Talkies (1996) 133 CTR (P H) 474 : (1996) 220 ITR 107 (P H) where it was held that whether interest chargeable in case of returns filed pursuant to notices under s. 148 was debatable and, therefore, rectification for deletion of interest was not possible. He further stated that issue whether the interest under ss. 234B and 234C could be charged in a case where profit is determined as per provisions of s. 115JB was also debatable. He relied on the judgment of Karnataka High Court in the case of Kwality Biscuits Ltd. vs. CIT where it was held that interest under ss. 234B and 234C could not be charged in such a case. He further submitted that this decision was followed by Tribunal, Delhi Bench in the case reported in (2000) 69 ITJ (Del) 650. When the attention of the learned Authorised Representative was drawn to the recent judgment of jurisdictional High Court of Punjab Haryana in the case of CIT vs. Upper India Steel Mfg. Engg. Co. Ltd. (2004) 192 CTR (P H) 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed under s. 143(1)(a) and interest under ss. 234B and 234C which was otherwise chargeable on the basis of income declared under s. 115JB, the same was not charged. The AO charged the same as per order dt. 23rd June, 2003 passed under s. 154 of the IT Act, 1961. The learned CIT(A) has deleted the same by relying on the judgment of Karnataka High Court in the case of Kwality Biscuits Ltd. vs. CIT. However, in the case of CIT vs. Upper India Steel Mfg. Engg. Co. Ltd., the Hon'ble jurisdictional High Court of Punjab Haryana has dissented from the view taken by the Karnataka High Court in the case of Kwality Biscuits Ltd. vs. CIT and has held that interest under ss. 234B and 234C is inescapable even in a case where income is computed as per provisions of s. 115J (now s. 115JB). The Court has further held that charging of interest under these sections does not fall in the category of adjustments mentioned under s. 143(1)(a) and, therefore, it cannot be equated with adjustments. The relevant findings recorded by the Hon'ble High Court on p. 125 of 279 ITR (headnotes) are as under: "Held, that the Tribunal was required to resolve the issue solely on the merits and could not have gra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the judgment interpreting the provision is that the view taken by the authority is rendered erroneous. It is not in conformity with the provision of the statute. Thus, there is a mistake. Should it still be perpetuated? If the contention raised on behalf of the assessee were accepted, the result would be that even though the order of the authority is contrary to the law declared by the highest Court in the State or the country, still the mistake could not be rectified for the reason that the decision is subsequent to the date of the order. Only the dead make no mistake. Exemption from error is not the privilege of mortals. It would be a folly not to correct it. Sec. 154 appears to have been enacted to enable the authority to rectify the mistake. The legislative intent is not to allow it to continue. This purpose has to be promoted. The legislature's will has to be carried out. By placing a narrow construction, the object of the legislation shall be defeated. Such a consequence should not be countenanced. Still further, it deserves mention that Parliament has prescribed a period of four years for correction of the mistake. While an assessment under s. 143 or 144 has to be no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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