9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2013 (6) TMI 310 - HC - Income TaxMinimum Alternate Tax (MAT) u/s 115JB - interpretation - reduction of exempted income u/s 80-IB from book profit u/s 115JB - held that - Section 115JB is in the nature of a special provision, a charging provision, and creating liability in respect of an assessee which is a company and whose taxes as determined on the returns filed in the normal manner falls short of the stipulated amount and a charge is created for making the difference, i.e., the object of the legislation is to ensure a minimum tax of seven and half per cent. on the book profit as ascertained under section 115JB is levied and collected from the companies whose payment of tax always without the application of this provision falls short of this amount of tax. There is no scope for interpretation in the present situation, as the provision of the statute should be given effect to, as it occurs and if there is only any ambiguity in understanding the statute then only the tool of interpretation should be called in aid. We do not find any competing or derogatory provision in section 115JB vis-a-vis section 80-IB of the Act is concerned. Section 80-IB operates in a particular sphere and section 115JB is operative in a totally different sphere. It is not the case of the appellant-assessee that section 80-IB is not operated or given effect to. While this is not in any way denied to an assessee, section 115JB is a special charging section for regulating tax liability of companies in general and made applicable in particular and is confined to the assessee-companies whose tax liability, when computed in the normal manner falls short of the liability as computed under this provision. Therefore, we are of the view that there is absolutely no question of section 80-IB having any bearing or effect or control over the provisions of section 115JB of the Act. A budgetary speech while will have some significance for understanding a provision if there is any ambiguity, in the wake of clear language of section 115JB, in the first instance there is no ambiguity, in the second instance, the ambiguity sought to be introduced on certain premise which is not apparent and is only on a limited reading of the budget speech, at any rate a budget speech in itself cannot regulate or control the statutory provision, more so a charging section in a revenue yielding statute, we are of the clear opinion that the provisions of section 115JB should be given full effect to without being influenced or guided or regulated by the budget speech of the Finance Minister. If the argument of Sri Shankar, learned counsel for the appellant, is to be accepted, then it will result in a discrimination against such assessee-companies who have to pay tax under section 115JB of the Act, but have no concession available under section 80-IB, whereas the tax liability of the person under section 115JB of the Act, who can claim concession under section 80-IB of the Act gets reduced for the purpose of section 115JB of the Act. It is, therefore, to avoid section 115JB being rendered discriminatory and unconstitutional being violative of article 14 of the Constitution of India, the contention of Sri Shankar for reading down or reading up the provisions of section 115JB of the Act, particularly by adding to different situations mentioned in the Explanation, to be expanded by including reference to section 80-IB of the Act cannot be accepted. A statutory provision cannot be so read down to render it unconstitutional, but reading down a statutory provision is to make it constitutional and not otherwise. - Decided against the assessee.
Issues Involved:
1. Applicability of Minimum Alternative Tax (MAT) under Section 115JB. 2. Consideration of exempted income under Section 80-IB while computing book profit under Section 115JB. 3. Chargeability of interest under Sections 234B and 234C in relation to Section 115JB. Issue-wise Detailed Analysis: 1. Applicability of Minimum Alternative Tax (MAT) under Section 115JB: The court addressed whether the provisions of MAT under Section 115JB are applicable to the appellant. The appellant argued that Section 115JB should not apply to them due to the principle of promissory estoppel and legitimate expectation, as they were entitled to exemptions under Section 80-IB for their industrial unit in a backward area. The court, however, held that Section 115JB is a special charging provision that ensures a minimum tax on book profits and operates independently of Section 80-IB. The court concluded that there is no conflict between Section 115JB and Section 80-IB, as they operate in different spheres. Therefore, the applicability of Section 115JB was affirmed. 2. Consideration of Exempted Income under Section 80-IB while Computing Book Profit under Section 115JB: The appellant contended that the income exempted under Section 80-IB should be excluded while computing book profit under Section 115JB. The court rejected this argument, stating that Section 115JB is a special provision for levying MAT on companies and does not allow for exclusions beyond what is explicitly stated in the statute. The court emphasized that the benefit of Section 80-IB is not denied but operates separately from the MAT provisions under Section 115JB. Thus, the court held that exempted income under Section 80-IB should not be reduced from book profits for the purpose of Section 115JB. 3. Chargeability of Interest under Sections 234B and 234C in Relation to Section 115JB: The appellant disputed the levy of interest under Sections 234B and 234C for non-payment of advance tax due to the retrospective application of the amendment to Section 115JB. The court agreed with the appellant for the assessment year 2002-03, referencing the decision in CIT v. Jupiter Bio-Science Ltd., which held that interest under Sections 234B and 234C is not justified when the taxpayer was unaware of the liability due to the retrospective amendment. However, for the subsequent assessment years 2003-04 and 2004-05, the court upheld the chargeability of interest, as the appellant was aware of the provisions and failed to pay the advance tax accordingly. Conclusion: The court allowed the appeal in part for the assessment year 2002-03, ruling in favor of the appellant regarding the levy of interest under Sections 234B and 234C. For the assessment years 2003-04 and 2004-05, the court dismissed the appeals, affirming the applicability of Section 115JB and the chargeability of interest under Sections 234B and 234C.
|
