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2018 (10) TMI 1507 - HC - Income TaxMAT - levy of interest u/s 234B and 234C in the computation u/s 115JA - Held that - The substantial questions of law raised in this appeal are squarely covered by the decision of this Court in the case of M/s.Tamilnadu Magnesite Ltd. V. The Joint Commissioner of Income Tax, Special Range, Salem 2018 (4) TMI 1606 - MADRAS HIGH COURT wherein held Section 115JB is a self-contained code pertaining to MAT, which imposed liability for payment of advance tax on MAT companies and, therefore, where such companies defaulted in payment of advance tax in respect of tax payable under Section 115JB, it was liable to pay interest under Sections 234B and 234C of the Act. Interest under Sections 234B and 234C shall be payable on failure to pay advance tax in respect of tax payable under Section 115JA/115JB. For the aforestated reasons, Circular No. 13/2001 dated 9.11.2001 issued by CBDT has no application. - Decided against assessee.
Issues Involved:
1. Interpretation of interest u/s 234B and 234C in cases where income is computed u/s 115JA of Income Tax Act, 1961. 2. Applicability of decisions by different High Courts and the Supreme Court on the issue. Issue 1: Interpretation of interest u/s 234B and 234C: The appeal raised questions on whether interest u/s 234B and 234C is chargeable when income is computed u/s 115JA of the Income Tax Act, 1961. The Tribunal's order was challenged on this basis. The Court referred to a previous case involving M/s. Tamilnadu Magnesite Ltd. where the issue was addressed. The Court cited the decision of the Supreme Court in Joint Commissioner of Income Tax Vs. Rolta India Ltd., which emphasized the liability of MAT companies to estimate profits before the financial year ends. The Karnataka High Court's judgment in Kwality Biscuits Ltd. was discussed, highlighting the requirement to determine book profit under Section 115J of the Act before assessing tax liability. The Court noted conflicting views by different High Courts but concluded that interest under Sections 234B and 234C is applicable on failure to pay advance tax under Section 115JA/115JB. The Court dismissed the appeal, favoring the Revenue based on the Supreme Court's decision. Issue 2: Applicability of Court Decisions: The Court analyzed the conflicting decisions of various High Courts and the Supreme Court on the issue. It noted that the Karnataka High Court's judgment in Kwality Biscuits Ltd. was affirmed by the Supreme Court. However, the Karnataka High Court later distinguished its decision in another case, emphasizing the self-contained nature of Section 115JB pertaining to MAT companies. The Court highlighted that interest under Sections 234B and 234C is applicable to companies failing to pay advance tax under Section 115JB. The Court also referred to Circular No. 13/2001 issued by CBDT, clarifying the applicability of advance tax payments under Section 115JB and the corresponding interest provisions. Ultimately, the Court dismissed the Assessee's appeal, aligning with the Supreme Court's decision and ruling in favor of the Revenue. This judgment clarifies the interpretation of interest provisions under Sections 234B and 234C concerning the computation of income under Section 115JA of the Income Tax Act, 1961. It also highlights the significance of previous court decisions and the applicability of interest on advance tax payments for MAT companies.
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