2015 (5) TMI 646 - AT - Income Tax

Levy of interest u/s 234B and u/s 234C - interest for defaults in payment of advance tax - MAT income determined by the Assessing Officer under Sec.115JB - Held that - Section 115J/115JA are special provisions. Section 207 envisages that tax shall be payable in advance during any financial year on current income in accordance with the scheme provided in sections 208 to 219 (both inclusive) in respect of the total income of the assessee that would be chargeable to tax for the assessment year immediately following that financial year. Section 215(5) of the Act defined what is assessed tax , i.e., tax determined on the basis of regular assessment so far as such tax relates to income subject to advance tax. The evaluation of the current income and the determination of the assessed income had to be made in terms of the statutory scheme comprising section 115J/115JA of the Act. Hence, levying of interest was inescapable. The pre-requisite condition for applicability of section 234B is that the assessee is liable to pay tax under section 208 and the expression assessed tax is defined to mean the tax on the total income determined under section 143(1) or under section 143(3) as reduced by the amount of tax deducted or collected at source. Thus, there is no exclusion of section 115J/115JA in the levy of interest under section 234B. When the levy of interest is mandatory and the Hon ble Apex Court in Saurashtra Kutch Stock Exchange Ltd. 2008 (9) TMI 11 - SUPREME COURT duly explains the correct law finding the assessee liable, the assessee cannot seek to escape the mandatory levy being fastened on it under the plea that it had bona fide belief that it is not liable. It is not a case of reopening or revision or rectification of mistake that the assessee can take shelter under the plea that the issue was earlier debatable and/or two views were possible. A belief howsoever bona fide cannot exonerate the assessee from the mandatory levy of interest u/s 234B and 234C of the Act on assessment on Book Profit u/s 115JB of the Act. In view of the above said discussion and placing reliance upon the decision of the CIT vs Anjum M.H.Ghaswala and Others (2001 (10) TMI 4 - SUPREME Court) , CIT vs Rolta India Ltd. (2011 (1) TMI 5 - SUPREME COURT OF INDIA ) and CIT vs Saurashtra Kutch Stock Exchange Ltd. (supra) we do not find any infirmity in the orders of the ld. CIT(A). Accordingly we uphold the same. - Decided against assessee.

Summary

Issues Involved:
1. Levy of interest under Sections 234B and 234C of the Income Tax Act, 1961 on MAT income determined under Section 115JB.

Issue-wise Detailed Analysis:

1. Levy of Interest under Sections 234B and 234C on MAT Income Determined under Section 115JB:

The primary issue in this appeal is whether interest under Sections 234B and 234C of the Income Tax Act, 1961 is chargeable on the MAT income determined by the Assessing Officer under Section 115JB. The assessee contested the levy of interest amounting to Rs. 98,52,442 under Section 234B and Rs. 82,91,886 under Section 234C on the grounds that there was a divergence of opinion among various courts before the Supreme Court's decision in the case of Rolta India Ltd.

The assessee filed its return of income electronically, disclosing total income and paid taxes under Section 115JB on book profits. The Assessing Officer (AO) levied interest under Sections 234B and 234C, which was upheld by the Commissioner of Income Tax (Appeals) [CIT(A)] citing the Supreme Court's decision in Rolta India Ltd. The CIT(A) dismissed the assessee's appeal, leading to the present appeal before the Tribunal.

The Tribunal reviewed the arguments and the relevant legal provisions. The Tribunal noted that the Supreme Court in Rolta India Ltd. had clarified that interest under Sections 234B and 234C is leviable on assessments made under MAT as per Section 115JB. The Supreme Court emphasized that Sections 234B and 234C apply to all companies, including those assessed under MAT provisions, and that the term "assessed tax" includes tax determined on the basis of regular assessment, which encompasses MAT.

The Tribunal also considered the argument that the assessee could not foresee the applicability of Section 115JB and hence should not be liable for interest. However, the Tribunal referred to the Supreme Court's decision in the case of ACIT vs. Saurashtra Kutch Stock Exchange Ltd., which stated that judicial decisions act retrospectively and that judges do not make new law but only discover the correct law, which applies retrospectively.

The Tribunal examined various case laws cited by the assessee, including decisions of the Bombay High Court and different Tribunal benches, but found that these were either rendered before the Supreme Court's decision in Rolta India Ltd. or did not specifically address the issue of interest under Sections 234B and 234C on MAT income.

The Tribunal concluded that the levy of interest under Sections 234B and 234C on assessments under Section 115JB is mandatory, as clarified by the Supreme Court in Rolta India Ltd. and CIT vs. Anjum M.H. Ghaswala & Others. The Tribunal upheld the CIT(A)'s order, dismissing the assessee's appeal.

Conclusion:

The Tribunal upheld the levy of interest under Sections 234B and 234C on MAT income determined under Section 115JB, affirming the CIT(A)'s decision based on the Supreme Court's rulings in Rolta India Ltd. and other relevant cases. The appeal of the assessee was dismissed.