2013 (10) TMI 937 - HC - Income Tax

Interest u/s 234-B and 234-C of the Income Tax Act, when the income was assessed u/s 115 JB of the Act as the advance tax is not paid Held that - Relying upon the judgment of Joint Commissioner of Income-tax vs. Rolta India Ltd 2011 (1) TMI 5 - SUPREME COURT OF INDIA , it was held that 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. Moreover, in any event, para 2 of that Circular itself indicates that a large number of companies liable to be taxed under MAT provisions of Section 115JB were not making advance tax payments. In the said circular, it has been clarified that Section 115JB is a self-contained code and thus, all companies were liable for payment of advance tax under Section 115JB and consequently provisions of Sections 234B and 234C imposing interest on default in payment of advance tax were also applicable Decided against the Assessee.

Summary

Issues:
1. Interpretation of interest u/s 234-B and 234-C of the Income Tax Act in the context of assessment under section 115 JB.
2. Application of precedent in distinguishing decisions.
3. Relevance of High Court decisions in conflicting scenarios.
4. Referral of matters to the President Tribunal for differing views.

Analysis:
1. The primary issue in this case revolves around the interpretation of interest under sections 234-B and 234-C of the Income Tax Act concerning assessment under section 115 JB. The appellant contested the imposition of interest, arguing that as the income was assessed under section 115 JB, there was no obligation to pay advance tax and interest thereon. The Tribunal's decision was challenged, raising substantial questions of law on this matter.

2. Another key issue addressed was the application of precedent in distinguishing decisions. The Tribunal's decision to differentiate the Quality Biscuits Ltd case from the current scenario was questioned. The appellant sought clarification on whether the Tribunal was correct in making this distinction.

3. The relevance of High Court decisions in conflicting scenarios was also a crucial point of contention. The Tribunal's reliance on the decision of ACIT vs. Hindustan Steels Industries (India) was challenged, particularly in the absence of jurisdictional High Court decisions and conflicting rulings from other High Courts. The appellant contested the applicability of the decision favoring the assessee's case.

4. Lastly, the matter of referring issues to the President Tribunal for differing views was raised. The appellant argued that the ITAT should have referred the matter to the President Tribunal if they intended to take a different stance from the one previously taken by an earlier Bench. Precedents from cases such as Sayaji Iron and Engg. Co vs. CIT and CIT vs. L.G. Rama Murthy were cited to support this argument.

In conclusion, the High Court dismissed the Income Tax Appeal, citing that the questions of law raised were covered by the judgment in Joint Commissioner of Income-tax vs. Rolta India Ltd, which favored the revenue and went against the assessee. The detailed analysis of each issue provided clarity on the legal interpretations and precedents considered in reaching this decision.