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TMI Blog2014 (2) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... 16,03,07,717. In view of the payment of excess tax paid under MAT at Rs. 17,17,98,327 the Assessing Officer worked out a refund of Rs. 1,74,90,610 (17,17,98,327-16,03,07,717) and directed for issuing a refund of Rs. 1,95,89,482) to the respondent-company including interest under section 244A of the Act, accordingly, the refund was issued along with interest. The respondent-company further moved an application under section 154 of the Act on August 27, 2001, claiming further interest under section 244A for the period April 1, 2001, to July 18, 2001. The Assessing Officer, being satisfied granted further interest under section 244A amounting to Rs. 6,12,171 for the balance period as claimed. The learned Commissioner of Income-tax, Kota, in short ("the CIT") while issuing notice under section 263 of the Act, had held that the two orders passed by the Assessing Officer dated March 30, 2001, as well as dated June 13, 2002, were erroneous and prejudicial to the interests of the Revenue on the basis that tax has been paid by the assessee under MAT on the book profit under section 115JA of the Act, which cannot be equated with payment of the advance tax by the respondent on its total in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the order of the learned Income-tax Appellate Tribunal as well as to the order of the learned Commissioner of Income-tax, Kota, and has claimed that substantial questions of law arise out of the order of the learned Income-tax Appellate Tribunal and that the learned Income-tax Appellate Tribunal was not justified in quashing the order under section 263 passed by the learned Commissioner of Income-tax. At this juncture, it would be appropriate to refer the relevant portion of section 115JA and section 115JAA of the Act, which reads as under : "115JA. (1) Notwithstanding anything contained in any other provisions of this Act, where in the case of an assessee, being a company, the total income, as computed under this Act in respect of any previous year relevant to the assessment year commencing on or after the 1st day of April, 1997 but before the 1st day of April, 2001 (hereafter in this section referred to as the relevant previous year) is less than thirty per cent. of its book profit, the total income of such assessee chargeable to tax for the relevant previous year shall be deemed to be an amount equal to thirty per cent. of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... " which is also referred as "current income". In the case of the respondent-company itself, the appellant-Department in the earlier years was charging interest under section 234B and section 234C of the Act in respect of deemed income under section 115JA of the Act in case, there was short fall of taxes and without any demur the respondent-company was also depositing the interest in cases there was delay/short fall in making of instalments of advance tax. Therefore, on this analogy, the Income-tax Appellate Tribunal has rightly come to the conclusion that when interest under sections 234B and 234C is leviable then on the same analogy interest under section 244A is equally allowable to the assessee-respondent. Ultimately, the Income-tax Appellate Tribunal, after referring to certain judgments, came to the conclusion that when the Department is charging interest on the delayed payment of instalments of MAT which the assessee was under obligation to deposit in advance then the Department is also bound to pay interest on the excess/surplus payment made by the assessee-respondent which the Department has very well enjoyed. It is also observed by the Income-tax Appellate Tribunal that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the judgment of the Karnataka High Court in the case of Kwality Biscuits Ltd. v. CIT reported in [2000] 243 ITR 519 and, according to the Karnataka High Court, the profit as computed under the Income-tax Act, 1961 had to be prepared and thereafter the book profit as contemplated under section 115J of the Act had to be determined and then, the liability of the assessee to pay tax under section 115J of the Act arose, only if the total income as computed under the provisions of the Act was less than 30 per cent. of the book profit. According to the Karnataka High Court, this entire exercise of computing income or the book profits of the company could be done only at the end of the financial year and hence the provisions of sections 207, 208, 209 and 210 (predecessors of sections 234B and 234C) were not applicable until and unless the accounts stood audited and the balance-sheet stood prepared, because till then even the assessee may not know whether the provisions of section 115J would be applied or not. The court, therefore, held that the liability would arise only after the profit is determined in accordance with the provisions of the Companies Act, 1956 and, therefore, interest und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were liable for payment of advance tax under section 115JB and consequently the provisions of sections 234B and 234C imposing interest on default in payment of advance tax were also applicable. For the aforestated reasons the Commissioner of Income-tax succeeds in the civil appeal arising out of S. L. P. (C.) No. 25746 of 2009 (Joint CIT v. Rolta India Ltd.) as also in the civil appeal arising out of S. L. P. (C.) No. 18367 of 2010 (CIT v. Export Credit Guarantee Corporation of India Ltd.). Consequently, Civil Appeal No. 459 of 2006 (Nahar Exports v. CIT) and Civil Appeal No. 7429 of 2008 (Lakshmi Precision Screws Ltd. v. CIT) stand dismissed with no order as to costs." This authority of the apex court has already considered the judgment rendered by the hon'ble apex court in the case of CIT v. Kwality Biscuits Ltd. [2006] 284 ITR 434 (SC) which had dismissed the appeal of the Revenue by affirming the judgment of the hon'ble High Court in the case of Kwality Biscuits Ltd. v. CIT [2000] 243 ITR 519 (Karn). In the case of CIT v. Apar Industries Ltd. [2010] 323 ITR 411 (Bom), the Bombay High Court was considering the issue as to whether the minimum alternate tax (MAT) to which the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 244A, the contention of the Revenue that if the case does not fall under either of the clauses in section 244A, no interest is payable, is without any substance. Clauses (a) and (b) specifically refer to the instances where interest is paid under the Act. It is not exhaustive. It is possible, in a given case, that after the expiry of the financial year, the assessee may pay tax either along with the self-assessment return or even before the return is filed. If ultimately the said payment is found to be in excess and the Department chooses to refund the said amount, then the question would be, from what date interest is payable since interest is payable on such refunds under section 244A. In the absence of an express proviso as contained in clause (a), it cannot be said that the interest is payable from the 1st day of April of the assessment year. At the same time, as the said payment of tax was not made in pursuance of a notice of demand issued under section 156, the Explanation to clause (b) of section 244A has no application. In such cases, as the opening words of clause (b) specifically referred to 'as in any other case', the interest is payable from the dates of payment of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enables the Commissioner of Income-tax to call for and examine the record of the case or pass any order under the Act and also empowers him to make or cause to be made such an inquiry as he deems fit and necessary in order to find out, if the order passed by the Assessing Officer is erroneous in so far as it is prejudicial to the interests of the Revenue, however, he has to have certain material to come to the conclusion. Once he comes to the above conclusion that there is material, the Commissioner of Income-tax is empowered to pass an order as per the circumstances of the case which may warrant as he is empowered to take recourse to any of the three courses indicated in section 263 only. Therefore, it is clear that the Commissioner of Income-tax does not have unfattered and unchequered discretion/power to reverse the order. He can do so within the bounds of the law and has to satisfy the need of fairness in action and fair play with due respect to the principle of audi alteram partem as envisaged in the Constitution. The law is well settled that the Commissioner of Income-tax cannot invoke the powers to correct each and every mistake or error committed by the Assessing Officer. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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