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TMI Blog2015 (5) TMI 646X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Saurashtr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 30 ITR 470. Ground No.3 is dismissed. Against the above order the assessee is in appeal before us. 4. We have heard both the counsel and carefully perused the records. The ld. Counsel of the assessee submitted that there is no dispute that as per order of the Hon ble Apex Court in the case of Rolta India Ltd now interest u/s 234B and 234C of the Act is leviable on assessments made under MAT in respect of interest u/s 234B and 234C of the Act. However, the ld. Counsel of the assessee submitted that this decision of the Hon ble Apex Court was delivered on 7th January, 2011. The ld. Counsel submitted that prior to that there was a divergence of opinion among various courts and assessee was under a bona fide belief that it was not liable to pay interest u/.s 234B and 234C of the Act in case of MAT u/s 115JB of the Act. In this regard the ld. Counsel referred to several case laws as under :- 1. Judgement of the Hon ble Bombay High Court in the case of Snowcem India Ltd. Vs DCIT (313 ITR 170) 2. Order of the Hon ble Mumbai Bench of the Tribunal in the case of Charbuja Industries P.Ltd. v. Addl. CIT [2014] (31 ITR (Trib.)89) 3. Order of the Hon ble Mumbai bench of the Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he relevant previous year in accordance with the provisions of Parts II and III of Schedule VI70 to the Companies Act, 1956 (1 of 1956) : Provided that while preparing the annual accounts including profit and loss account,- (i) the accounting policies; (ii) the accounting standards adopted for preparing such accounts including profit and loss account; (iii) the method and rates adopted for calculating the depreciation, shall be the same as have been adopted for the purpose of preparing such accounts including profit and loss account and laid before the company at its annual general meeting in accordance with the provisions of section 210 of the Companies Act, 1956 (1 of 1956) : Provided further that where the company has adopted or adopts the financial year under the Companies Act, 1956 (1 of 1956), which is different from the previous year under this Act,- (i) the accounting policies; (ii) the accounting standards adopted for preparing such accounts including profit and loss account; (iii) the method and rates adopted for calculating the depreciation, shall correspond to the accounting policies, accounting standards and the method and rates for calculating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epreciation on account of revaluation of assets); or (iib) the amount withdrawn from revaluation reserve and credited to the profit and loss account, to the extent it does not exceed the amount of depreciation on account of revaluation of assets referred to in clause (iia); or] [(iii) the amount of loss brought forward or unabsorbed depreciation, whichever is less as per books of account. Explanation.-For the purposes of this clause,- (a) the loss shall not include depreciation; (b) the provisions of this clause shall not apply if the amount of loss brought forward or unabsorbed depreciation is nil; or] (iv) the amount of profits eligible for deduction under section 80HHC, computed under clause (a) or clause (b) or clause (c) of sub-section (3) or sub-section (3A), as the case may be, of that section, and subject to the conditions specified in that section; or (v) the amount of profits eligible for deduction under section 80HHE computed under sub-section (3) or sub-section (3A), as the case may be, of that section, and subject to the conditions specified in that section; or (vi) the amount of profits eligible for deduction under section 80HHF computed under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to every assessee, being a company, mentioned in this section.] [(6) The provisions of this section shall not apply to the income accrued or arising on or after the 1st day of April, 2005 from any business carried on, or services rendered, by an entrepreneur or a Developer, in a Unit or Special Economic Zone, as the case may be.] [Interest for defaults in payment of advance tax.] 234B. (1) Subject to the other provisions of this section, where, in any financial year, an assessee who is liable to pay advance tax under section 208 has failed to pay such tax or, where the advance tax paid by such assessee under the provisions of section 210 is less than ninety per cent of the assessed tax, the assessee shall be liable to pay simple interest at the rate of [one] per cent for every month or part of a month comprised in the period from the 1st day of April next following such financial year [to the date of determination of total income under sub-section (1) of section 143 [and where a regular assessment is made, to the date of such regular assessment, on an amount]] equal to the assessed tax or, as the case may be, on the amount by which the advance tax paid as aforesaid fall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed in the period commencing on the day following [the date of determination of total income under sub-section (1) of section 143 [and where a regular assessment is made as is referred to in sub-section (1) following the date of such regular assessment]] and ending on the date of the reassessment or recomputation under section 147 [or section 153A], on the amount by which the tax on the total income determined on the basis of the reassessment or recomputation exceeds the tax on the total income determined [under sub-section (1) of section 143 or] on the basis of the regular assessment aforesaid. Explanation.-[* * *] (4) Where, as a result of an order under section 154 or section 155 or section 250 or section 254 or section 260 or section 262 or section 263 or section 264 or an order of the Settlement Commission under sub-section (4) of section 245D, the amount on which interest was payable under sub-section (1) or sub-section (3) has been increased or reduced, as the case may be, the interest shall be increased or reduced accordingly, and- (i) in a case where the interest is increased, the Assessing Officer shall serve on the assessee a notice of demand in the prescribed f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the 15th day of December is less than sixty per cent of the tax due on the returned income, then, the assessee shall be liable to pay simple interest at the rate of [one] per cent per month for a period of three months on the amount of the shortfall from thirty per cent or, as the case may be, sixty per cent of the tax due on the returned income; (ii) the advance tax paid by the assessee on his current income on or before the 15th day of March is less than the tax due on the returned income, then, the assessee shall be liable to pay simple interest at the rate of [one] per cent on the amount of the shortfall from the tax due on the returned income :] [Provided that nothing contained in this sub-section shall apply to any shortfall in the payment of the tax due on the returned income where such shortfall is on account of under-estimate or failure to estimate- (a) the amount of capital gains; or (b) income of the nature referred to in sub-clause (ix) of clause (24) of section 2, and the assessee has paid the whole of the amount of tax payable in respect of income referred to in clause (a) or clause (b), as the case may be, had such income been a part of the total income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall apply in respect of assessments for the assessment year commencing on the 1st day of April, 1989 and subsequent assessment years.]] 7.1. We find that the issue as to levy of interest u/s 234B and 234C of the Act on assessments on book profit u/s 115JB of the Act is settled as per the decision of the Hon ble Apex Court in the case of Rolta India Limited (supra). The Hon ble Apex Court has referred to the provisions of section 234B and 234C of the Act and expounded as under :- At the outset, it may be stated that sections 234B and 234C do not make any reference to section 115J/115JA. Section 234B lays down that where advance tax is required to be paid under section 208 and there is a failure on that if the amount of advance tax paid under section 210 is less than 90 per cent of the assessed tax, in that case the assessee is liable to pay interest. Section 234C refers to interest for deferment of advance tax. It says that if the assessee has to pay advance tax on its current income on or before 15th of June and the tax paid is less than 15 per cent of the tax due on the returned income or the amount of the advance tax paid on or before 15th of September is less than 45 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the relevant Finance Acts providing for payment of advance tax under sections 115JA and 115JB. So far as interest leviable under section 234B is concerned, the section is clear that it applies to all companies. 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. The expression assessed tax is defined to mean the tax assessed on regular assessment which means the tax determined on the application of section 115J/115JA in the regular assessment. The question which remains to be considered is whether the assessee, which is a MAT company, was not in a position to estimate its profits of the current year prior to the end of the financial year on 31st March. In this connection the assessee placed reliance on the judgmnent of the Karnataka High Court in the case of Kwality Biscuits Ltd. v. CIT reported in [2000] 243 I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utis Ltd. (supra) and held that section 115JB, with which we are concerned, is a self-contained code pertaining to MAT, which imposed liability for payment of advance tax on MAT companies and, therefore, where such companies defaulted in payment of advance tax in respect of tax payable under section 115JB, it was liable to pay interest under sections 234Band 234C of the Act. Thus, it can be concluded that interest under sections 234B and 234C shall be payable on failure to pay advance tax in respect of tax payable under section 115JA/115JB. For the afore stated reasons, Circular No.13 of 2001 dated November 9, 2001 issued by the Central Board of Direct Taxes reported in [2001] 252 ITR (St.) 50 has no application. Moreover, in any event, para 2 of that Circular itself indicates that a large number of companies liable to be taxed under the MAT provisions of section 115JB were not making advance tax payments. In the said circular, it has been clarified that section 115JB is a self-contained code and thus, all companies 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of the Hon ble Apex Court in the case of ACIT vs Saurashtra Kutch Stock Exchange Ltd. (supra). The Hon ble Bombay High Court decision in the case of Prime Securities Ltd. vs ACIT 333 ITR 464 did not deal with the interest u/s 234B and 234C of the Act leviable on book profit under MAT u/s 115JB of the Act and it pertained to a different issue. The decision of Hon ble Chennai Bench of the Tribunal in the case of Express Newspaper Ltd. v. Jt.CIT 103 TTJ 122 was also rendered prior to the Hon ble Apex Court s decision in the case of Rolta India Ltd. The decision of the Hon ble Delhi Bench of the Tribunal in the case of Royal Jordanian Airlines v. DDIT 119 TTJ 145 was with reference to section 44BBA of the Act also was rendered prior to the Hon ble Apex Court s decision in the case of Rolta India Ltd. 7.4. From the above it is clear that the above case laws do not support the case of the assessee. In the case of ACIT vs Saurashtra Kutch Stock Exchange Ltd. (supra) the Hon ble Apex Court has expounded in para 42 that judges do not make law, they only discover or find the correct law. The law has always been the same. If a subsequent decision alters the earlier one, it (the later ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the indentment of the Act u/s 115JB of the Act is that interest u/.s 234B and 234C of the Act is leviable on assessments on book profit under MAT, there is no room for ambiguity as to whether the assessee is liable for interest u/s 234B and 234C of the Act. 7.7. This view is further fortified by Hon ble Apex Court decision in the case of Saurashtra Kutch Stock Exchange Ltd. (supra) that Hon ble Apex Court does not expound any new law. It only explains the correct principle of law which is to be applied retrospectively. When the levy of interest is mandatory and the Hon ble Apex 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 discussio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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