2017 (10) TMI 389 - HC - Income Tax

Interest u/s 234B and 234C not chargeable if the total income is assessed to tax under section 115J - Held that - Interest cannot be charged under section 234B and 234C of the Act where the total income is determined under sec 115J of the Act. See Kwality Biscuits Ltd case 2006 (4) TMI 121 - SUPREME Court - Decided against the Revenue and in favour of the assessee.

Summary

Issues:
1. Typographical errors in the previous order dated 11.09.2017 in Tax Appeal No. 31 of 2003.
2. Interpretation of whether interest under sections 234B and 234C is chargeable when total income is assessed under section 115J of the Income Tax Act.
3. Review of the decision based on the judgment of the Supreme Court in the case of Joint Commissioner of Income tax v. Rolta India Ltd.
4. Consideration of conflicting judgments of the Supreme Court and Karnataka High Court in cases related to sections 115JA, 115JB, and 115J of the Income Tax Act.

Analysis:

1. The High Court noted typographical errors in the previous order and recalled it to pass a fresh order. The appeal was admitted to consider whether interest under sections 234B and 234C is chargeable when total income is assessed under section 115J of the Income Tax Act.

2. Initially, the Division Bench disposed of the appeal favoring the Revenue based on a Supreme Court judgment. However, the assessee filed a review petition citing a Karnataka High Court judgment related to section 115J, which was confirmed by the Supreme Court. The Division Bench, after considering the conflicting judgments, allowed the assessee's application, emphasizing that interest cannot be charged under sections 234B and 234C when total income is determined under section 115J of the Act.

3. The High Court highlighted that the earlier judgment was made under a mistaken impression that the Supreme Court's decision in the Rolta India Ltd. case applied to the present case, which involved section 115J, not 115JA or 115JB. The Court emphasized that sections 115JA and 115JB are self-contained codes, unlike section 115J. Referring to the Rolta India Ltd. case, the Court clarified that interest under sections 234B and 234C is payable only in specific circumstances related to MAT provisions.

4. Ultimately, the Court dismissed the appeal, overturning the previous decision in favor of the Revenue and ruling in favor of the assessee based on the interpretation of the provisions of sections 234B and 234C in conjunction with sections 115JA, 115JB, and 115J of the Income Tax Act. The judgment highlighted the importance of correctly applying the relevant provisions based on the specific context and legal principles established by previous court decisions.