2005 (3) TMI 45 - HC - Income Tax

Appeal to tribunal - Whether, Tribunal was justified in directing the Assessing Officer to charge the interest under section 234B on the basis of tax calculated on the returned income, whereas section 234B for charging interest clearly speaks of tax on assessed income determined under section 143(1) or on regular assessment minus tax deducted or collected at source? - This court is possessed of power to remand the case. In other words, power to remand is available to this court while hearing the appeal under section 260A of the Act. We intend to exercise this power in the interest of justice. It does not cause any prejudice to either party. We refrain from going into the merits of the case and while remanding the case to the Tribunal, allow the appeal, and set aside the impugned order. The Tribunal is directed to decide the appeal on the merits

Summary

Issues:
Appeal under section 260A of the Income-tax Act against the order of the Income-tax Appellate Tribunal regarding the charging of interest under section 234B based on returned income.

Analysis:
The judgment delivered by the High Court of Madhya Pradesh involved an appeal filed by the Revenue (Commissioner of Income-tax) under section 260A of the Income-tax Act against an order passed by the Income-tax Appellate Tribunal. The substantial question of law for the appeal was whether the Tribunal was justified in directing the Assessing Officer to charge interest under section 234B based on the tax calculated on the returned income, rather than on the assessed income determined under section 143(1) or on regular assessment minus tax deducted or collected at source. The court, after hearing the counsels for the appellant and perusing the record, decided to allow the appeal and remand the case to the Tribunal for a fresh decision.

The court noted that the Tribunal had decided the issue in favor of the assessee solely based on a decision reported in Ranchi Club Ltd. v. CIT [1996] 217 ITR 72 (Patna). However, the court observed that the Patna High Court did not consider the scope, ambit, and extent of section 234B, which was the subject matter of the appeal. The court emphasized that sections 234A and 234B of the Income-tax Act operate in different fields, dealing with different types of defaults related to interest payment by the assessee. The court highlighted the importance of considering the specific requirements of section 234B while interpreting and applying the provisions.

The High Court pointed out that the Tribunal did not adequately analyze the facts of the case, the relevant sections, and the parties' submissions before reaching a conclusion. The court stressed that a detailed examination of the issue, including the facts, applicable sections, and arguments of the parties, was essential for a just decision. As the Tribunal failed to conduct this thorough analysis, the court decided to remand the case for a proper consideration of the issue in accordance with the law.

In exercising its power to remand the case under section 260A of the Act, the court directed the Tribunal to decide the appeal on its merits within six months, emphasizing the importance of a detailed and lawful evaluation. The court refrained from delving into the merits of the case itself and set aside the impugned order, highlighting the need for a comprehensive and lawful approach in deciding the issue at hand.