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2014 (1) TMI 1623 - AT - Income TaxLevy of interest u/s 234B and 234C - minimum alternate tax under section 115JB - Held that - No fault can be found with the assessee in not depositing the advance tax of minimum alternate tax in view of the decision of the hon ble Supreme Court as well as various decisions of the hon ble High Court. The assessee had the bona fide reason to believe that advance tax was not payable in respect of minimum alternate tax under section 115JB as it was a settled law laid down by the hon ble Supreme Court and the hon ble High Court which hold good till the subsequent decision of the hon ble Supreme Court in the case of Joint CIT v. Rolta India Ltd. 2011 (1) TMI 5 - SUPREME COURT OF INDIA . Therefore prior to the decision of the hon ble Supreme Court in the case of Joint CIT v. Rolta India Ltd. 2011 (1) TMI 5 - SUPREME COURT OF INDIA settled proposition of the law on the point was that no advance tax was payable on minimum alternate tax computed under section 115JB and accordingly the interest under sections 234B and 234C cannot be levied for non-deposit of advance tax on minimum alternate tax for the year under consideration. Hence we delete the levy of interest under sections 234B and 234C in this case. - Decided in favour of assessee.
Issues:
Levy of interest under sections 234B and 234C for non-payment of advance tax on minimum alternate tax under section 115JB. Analysis: The appeals were filed against the orders of the Commissioner of Income-tax (Appeals) for the assessment years 2008-09 and 2009-10. The main ground raised by the assessee was regarding the charging of interest under sections 234B and 234C in view of the provisions under section 115JB of the Income-tax Act, 1961. The Assessing Officer computed book profits for minimum alternate tax under section 115JB and levied interest under sections 234B and 234C. The assessee challenged this before the Commissioner of Income-tax (Appeals) citing various decisions, including the Supreme Court's ruling in CIT v. Kwality Biscuits Ltd. The Commissioner upheld the levy of interest under sections 234B and 234C based on the decision in Joint CIT v. Rolta India Ltd. The authorized representative for the assessee argued that the Commissioner ignored the prevailing law at the time of assessment, as per the Kwality Biscuits case, and the assessee was not required to pay advance tax on minimum alternate tax under section 115JB. The representative also cited other court decisions supporting this stance. The Departmental representative, however, supported the orders of the lower authorities and the decision in Joint CIT v. Rolta India Ltd. The Tribunal considered the submissions and the legal precedents. It noted that at the relevant time, the law, as per Kwality Biscuits and other decisions, was that no advance tax was payable on minimum alternate tax. The subsequent decision in Joint CIT v. Rolta India Ltd. cannot be imposed retrospectively on the assessee. Therefore, the Tribunal held that the assessee had a bona fide belief that advance tax was not payable on minimum alternate tax under section 115JB. Consequently, the interest under sections 234B and 234C was deleted as the assessee had followed the settled law prevailing at the time. In conclusion, the appeals of the assessee were allowed, and the interest under sections 234B and 234C was deleted based on the legal position prevailing at the time of assessment.
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