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2013 (1) TMI 453 - AT - Income TaxInterest levied u/s 234B - claim of the assessee of exemption u/s 9(1)(i) was rejected - DR relied on amendment to sec 209 inserted by the Finance Act, 2012 - Held that - The aforesaid proviso inserted by the Finance Act, 2012 is prospective in nature with no retrospective effect. The proviso was brought into operation w.e.f. 1.4.2012 whereas the AY involved are 2005-06 and 2006-07, therefore not in agreement with the DR because the said proviso is not retrospective in nature. The language used in section 209(1) is regarding payment of advance tax in the financial year, therefore, the proviso is not attracted for the impugned assessment year. As decided in DIT v. Jacabs Civil Incorporated/Mitsubishi Corpn. 2010 (8) TMI 37 - DELHI HIGH COURT that since the assessee is not liable for advance tax, therefore, cannot be charged interest for failure to pay advance tax. Also see CIT v. Sedco Forex International Drilling Co. Ltd. 2003 (10) TMI 40 - UTTARANCHAL HIGH COURT - in favour of assessee.
Issues:
1. Deletion of interest levied under section 234B of the Act by the first appellate authority. 2. Interpretation of relevant sections and amendments for computation of advance tax. 3. Consideration of case law and judicial decisions regarding the levy of interest under section 234B. The judgment pertains to an appeal filed by the Revenue against the deletion of interest levied under section 234B of the Act by the first appellate authority. The Revenue contended that the interest was correctly levied and relied on various provisions for computation of advance tax, including sections 209 and 202 of the Act. The Revenue also highlighted an amendment inserted by the Finance Act, 2012, effective from 1.4.2012. The Revenue argued that the said proviso should apply to the assessment years 2005-06 and 2006-07. However, the Tribunal held that the proviso was prospective and not retrospective, and thus not applicable to the assessment years in question. The Tribunal emphasized that the language of section 209(1) pertains to payment of advance tax in the financial year, making the proviso irrelevant for the impugned assessment years. The Tribunal considered the submissions made by the Revenue and examined the facts of the case. It was revealed that a survey operation conducted under section 133A of the Act resulted in the rejection of the assessee's claim for exemption under section 9(1)(i) of the Act. The assessee's income was computed based on a markup method, and interest under sections 234A, 234B, and 234C was held to be leviable by the Assessing Officer. The first appellate authority, citing relevant decisions, concluded that interest under section 234B was not leviable. The Tribunal noted that the Hon'ble Delhi High Court and other High Courts had held that if an assessee is not liable for advance tax, interest under section 234B cannot be charged for failure to pay advance tax. The Tribunal found no infirmity in the decision of the first appellate authority and affirmed the stand taken by the CIT (A). In conclusion, the Tribunal dismissed both appeals of the Revenue, upholding the decision of the first appellate authority to delete the interest levied under section 234B of the Act. The Tribunal clarified the prospective nature of the relevant proviso inserted by the Finance Act, 2012, and emphasized the importance of judicial decisions in determining the levy of interest under section 234B based on the liability for advance tax. The judgment provides a comprehensive analysis of the legal provisions and precedents guiding the interpretation and application of tax laws in the context of advance tax computation and interest levies.
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