2018 (4) TMI 408 - HC - Income Tax

Charge of interest u/s 234B - ITAT holding the provisions of Sec. 115JC at par with the provisions of Sec. 115JA and 115JB in respect of liability of payment of advance tax prescribed u/s 208 charging of interest u/s 234B - Held that - The appellant has retained the amount which is supposed to be paid under Section 115JC which has not been paid. In that view of the matter, the proviso of Section 234B has been rightly invoked by the AO and confirmed by the CIT(A) and the Tribunal. No substantial question of law arises.

Issues:
1. Interpretation of Sections 115JC, 115JB, and 208 of the Income Tax Act of 1961.
2. Liability for payment of advance tax and interest under Section 234B in case of non-payment.
3. Comparison of provisions of Section 115JC with Sections 115JA and 115JB.
4. Refundability of tax credit for AMT paid under Section 115JC and treatment of excess advance tax paid.

Analysis:

1. The primary issue in these appeals involves the interpretation of Sections 115JC, 115JB, and 208 of the Income Tax Act of 1961. The appellant contended that Section 115JB & 115JC are not parimateria and that the Tribunal erred in applying decisions related to Section 115JB to the case at hand. The appellant argued that the provisions of advance tax under Section 208 are not applicable to payments made under Section 115JC, which deals with alternative minimum tax for non-corporate assesses. The appellant emphasized that Section 115JC does not mandate the payment of advance tax under Section 208 and that the liability for interest under Section 234B should not apply.

2. The issue of liability for payment of advance tax and interest under Section 234B in case of non-payment was extensively discussed. The appellant argued that the purpose of Section 115JC is limited to taxing non-corporate assesses paying zero tax and should not be extended to other provisions of the Act such as Section 208 or 234B. The appellant highlighted the differences between advance tax and alternative minimum tax (AMT), emphasizing that AMT is based on book profit and can only be paid after the end of the financial year. The appellant further contended that while excess advance tax is refundable, AMT is not refundable and can be carried forward for credit in subsequent assessment years.

3. Another crucial aspect was the comparison of the provisions of Section 115JC with Sections 115JA and 115JB. The appellant argued that the Tribunal erroneously equated the provisions of Section 115JC with those of Section 115JA and 115JB, leading to an incorrect application of the law. The appellant emphasized that Section 115JC was introduced with a specific purpose for non-corporate assesses and should not be treated in the same manner as provisions relating to Minimum Alternate Tax (MAT).

4. Lastly, the issue of refundability of tax credit for AMT paid under Section 115JC and the treatment of excess advance tax paid was raised. The appellant contended that while excess advance tax is refundable with interest, no such refund is allowed for AMT paid under Section 115JC. The appellant argued that the provisions of Section 115JC do not mandate the payment of advance tax under Section 208 or the levy of interest under Section 234B, as the purpose and treatment of AMT differ significantly from advance tax.

In conclusion, the High Court dismissed the appeals, upholding the decision of the Tribunal regarding the liability for interest under Section 234B in the case of non-payment of tax under Section 115JC. The Court found no substantial question of law arising from the matter, affirming the invocation of the proviso of Section 234B by the Assessing Officer and the decisions of the CIT(A) and the Tribunal.

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