2018 (11) TMI 1663 - HC - Income Tax

Imposition of interest u/s 234B and 234C - HELD THAT - As far as the question raised in paragraph 7(b) of the petition is concerned, we answer it by saying that imposition of interest is justified under sections 234B and 234C of the Income Tax Act, 1961, save and except on the income which arises from retrospective operation of any statute, decision etc. In those type of cases, the assessee is unable to know and assess his income and pay advance tax accordingly.

Summary

Issues:
1. Admissibility of appeal based on questions of law.
2. Imposition of interest under sections 234B and 234C of the Income Tax Act, 1961.

Admissibility of Appeal:
The High Court of Calcutta, with the consent of the parties' counsel, decided to address the application and the appeal together due to the simplicity of the points involved. The Court noted that the question raised in paragraph 7(c) of the petition had already been decided by the tribunal in favor of the revenue, which the assessee intended to challenge by filing a section 260A appeal. However, the Court found no basis for the revenue to be aggrieved by this aspect of the tribunal's order. On the other hand, the questions presented in paragraphs 7(a), (d), and (e) were deemed to be purely factual and did not raise any legal or substantial legal issues. Consequently, the Court refused to admit the appeal on these grounds.

Imposition of Interest under Sections 234B and 234C:
Regarding the question raised in paragraph 7(b) of the petition, the Court addressed the justification for imposing interest under sections 234B and 234C of the Income Tax Act, 1961. It was determined that the imposition of interest is warranted under these sections, except in cases where the income arises from the retrospective operation of a statute or decision. In such instances, where the assessee is unable to ascertain and assess their income to pay advance tax accordingly, interest may not be applicable. Consequently, the appeal (ITAT No. 161 of 2017) and the stay application (GA No. 1416 of 2017) were disposed of based on the above considerations. The Court directed that a certified photocopy of the order would be provided to the parties upon completion of all necessary formalities.