2018 (6) TMI 701 - HC - Income Tax

Demand of interest u/s 234B, 234C - Tax payable u/s 115JB (MAT) - Liability of pay advance tax - Whether the assessee was liable to pay advance tax - Revenue s case is that in view of the subsequent amendment to Section 115JB the deficit on the part of the assessee on account of deferred tax liability should have been taken into account as a shortfall and consequential interest payable thereon should have been determined. Held that - Commissioner was required to assess whether there was any shortfall in the payment of advance tax - Commissioner undertook the exercise in the appropriate perspective and ascertained whether, at the relevant point of time, there was any shortfall in payment of advance tax by the assessee - the question of interest or penalty would arise if a default is committed by an assessee in depositing the tax - thus Commissioner cannot be questioned since the Commissioner completed the totality of the picture by not only arriving at a finding that there was no default at the relevant point of time when the advance tax was deposited by the assessee but also that even if there was a default upon the retrospective operation of the amendment to Section 115JB, no claim on account of interest could be foisted on the assessee in the circumstances. Thus it does not appear that the Commissioner failed to undertake the exercise as called upon by the relevant order of March 26, 2012 as passed by the Supreme Court or that the Appellate Tribunal erred in failing to appreciate that the Commissioner had fallen into error - hence appeal is dismissed.

Summary

Issues:
1. Whether the Commissioner (Appeals) completed the exercise directed by a Supreme Court order.
2. Whether there was any shortfall in the payment of advance tax by the assessee.
3. Whether interest or penalty should be imposed on the assessee for any default.

Analysis:

1. The primary issue revolved around whether the Commissioner (Appeals) fulfilled the directive of a Supreme Court order dated March 26, 2012. The Revenue contended that the Commissioner failed to conduct the required exercise as per the Supreme Court order, leading to an alleged error by the Appellate Tribunal in not recognizing this default. The Commissioner's task was to assess if there was any shortfall in the payment of advance tax by the assessee, based on the principle established in a specific case.

2. The Commissioner found that, as of a certain date, the assessee had paid tax exceeding the total liability for the year, with no shortfall in advance tax payment. However, a subsequent retrospective amendment to Section 115JB of the Income Tax Act increased the tax liability due to deferred tax, resulting in a perceived shortfall in advance tax payment. Despite this, the Commissioner concluded that no default existed on the part of the assessee at the relevant time, as the payment was made in compliance with the law then in force.

3. The question of interest or penalty hinged on whether the assessee had defaulted in paying the tax as required by law. The Commissioner's assessment focused on the adequacy of the advance tax payment based on the prevailing legal provisions. Even though a retrospective amendment would have necessitated additional payment, the Commissioner determined that no penal consequences could be imposed on the assessee due to the absence of any default at the time of payment. The completeness of the Commissioner's order was noted, despite the additional analysis undertaken.

In conclusion, the judgment found that the Commissioner had appropriately assessed the advance tax payment without fault, considering the legal provisions applicable at the time of payment. The appeal was dismissed, affirming that there was no failure on the part of the Commissioner or error by the Appellate Tribunal.