2011 (7) TMI 808 - HC - Income Tax

Whether assessment made u/s 115J and 115JA and no advance tax has been deducted, the provisions of sections 234B and 234C would be applicable or not - Hon ble Supreme Court in Joint CIT v. Rolta India Ltd. 2011 (1) TMI 5 - SUPREME COURT OF INDIA wherein it was held that payment of advance tax under sections 115JA and 115JB of the Act and section 234B applies to all companies and there is no exclusion of section 115J/115JA in the levy of interest under section 234B of the Act - Decided against the assessee

Summary

Issues:
1. Interpretation of provisions of section 115J and section 115JA.
2. Applicability of sections 234B and 234C when provisions of Minimum Alternate Tax (MAT) are applied.

Analysis:
1. The appeal was filed by the Revenue challenging the order of the Income Tax Appellate Tribunal. The substantial questions of law framed in the appeal memo questioned the correctness of holding that sections 115J and 115JA are identical, and whether interest under sections 234B and 234C is payable when MAT provisions are applied. The appellant argued that the Supreme Court's decision in Joint CIT v. Rolta India Ltd. supported the Revenue's position, stating that all provisions of the Act apply to MAT companies, including the payment of advance tax and levy of interest under section 234B.

2. Despite the respondent not appearing before the Court, the Tribunal's order was based on a previous decision in Kwality Biscuits Ltd.'s case. However, the Court referred to the recent judgment in Rolta India Ltd.'s case by the Supreme Court, which clarified that when assessments are made under sections 115J and 115JA without deduction of advance tax, sections 234B and 234C are applicable. Consequently, the Court held in favor of the Revenue, setting aside the Tribunal's order and allowing the appeal.

This judgment emphasizes the importance of correctly interpreting tax provisions, especially in cases involving MAT and the applicability of interest provisions under the Income Tax Act. The decision provides clarity on the treatment of advance tax and interest levies concerning companies subject to MAT, aligning with the Supreme Court's interpretation in relevant cases.