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TMI Blog2017 (12) TMI 664X X X X Extracts X X X X X X X X Extracts X X X X ..... earned CIT(A) has erred in confirming the action of the Learned Assessing officer in treating AMT as Income Tax to be deposited in Advance as per the provisions of Section 208 of the Income Tax Act, 1961 and charged interest u/s 234B by alleging default in depositing advance tax. Thus the action of the Ld. AO deserves to be herd bad in raw and consequent interest u/s 234B of Rs. 436625/- deserves to be deleted. 3. On the facts and in the circumstances of the case and in law, the Learned CIT(A ) has erred in confirming the action of the Learned Assessing officer in not allowing application of assessee filed u/s 154 for not treating AMT as Income Tax without assigning any reason for such disallowance. 4. The appellant craves leave to add, amend, modify, alter and/or withdraw any ground of appeal on or before the date of hearing." 2. The assessee is a partnership firm and engaged in the business of manufacturing, exports of silver and Gold jewellery as well as precious and semi precious stones. During the assessment proceedings completed u/s 143(3) the Assessing Officer accepted the return of income however, charged interest u/s 234B because the assessee did not pay the advanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions of Section 115JB cannot be compared with the provisions of section 115JC and therefore, the assessee cannot be expected to pay the advance tax on the basis of books profits in terms of section 115JC. The ld. AR then contended that the alternative minimum tax as per the provisions of section 115JC is payable an adjusted total income and as such income is deemed to be total income. There is nothing under this provision requiring payment of advance tax u/s 208 of the Act. Thus, in the entire chapter there is no a single word referring to payment of interest of any type leave aside section 234B. The ld. AR has further contended that deeming provisions create a legal fiction only for a definite purpose and they are limited to that purpose only and should not be extended beyond that unless it is clearly and expressly provided. Therefore, it is not permissible to impose the liability of supposition of law. In support of his contention he has relied upon the following decisions:- (i) CIT vs. Elphinstone Sps & Wvg. Mills Co Ltd 40 ITR 142 (SC) (ii) Balkrishnan Memon (MK) vs. ACED 83 ITR 162 (SC) (iii) CIT vs. Amarchand N Shroof 48 ITR 59 (SC) (iv) Executor & Trustees of Sir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd. At the outset, we find that this issue of levy of interest u/s 234B in respect of tax liability in accordance with the provisions of section 115JC of the Act is a highly debatable issue and therefore, would be beyond the purview and scope of the provisions of section 154 of the Act where by only a mistake apparent and manifest on record can be rectified which does not require a long drawn reasoning or arguments on the issue. Therefore, the issue of levy of interest u/s 234B and applicability of the provisions of sections 207 and 208 of the Act cannot be decided in the proceedings u/s 154 of the Act. However, since neither the AO nor the CIT(A) has raised this objection against the application filed by the assessee u/s 154, therefore, we would consider and determine this issue on merits. The main thrust of the arguments of the ld. AR of the assesee is that the provisions of section 115JB cannot be compared with section 115JC because the assessee other than the corporate assessee are not required to maintain the books of accounts as per the provisions of Companies Act and therefore, it is not possible to estimate the book profit with a reasonable accuracy prior to finalization of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gular assessment is zero. Therefore, the intent of legislation to introduce this provision is to bring the person other than the company in the preview of payment of tax of AMT on book profit who are otherwise paying zero tax or very less tax. In fact this is not a true tax liability but only collection of tax which can be adjusted against the future tax liability of assess and therefore, it ensures that the persons as specified under these provisions cannot be allowed to pay no tax for a long period of time. The ld. AR of the assessee has tried to make a distinction between the payment of advance tax and payment of AMT based on books profit and submitted that the payment of advance tax if found in excess of regular tax the same is refunded whereas the payment of AMT is never refunded but it can be adjusted as per the provisions of section 115JD (iv) of the Act. Further, the advance tax carries the interest u/s 244A but no such refund or interest is payable on the AMT. We find that this contention of the ld. AR is misconceived as even if an advance tax based on book profit is paid more the tax liability u/s 115JC on final book profit then the said excess amount of advance tax which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... '1. The assessee has challenged the order of Income Tax Appellate Tribunal dated 31.3.2010 raising following questions for our consideration: "Whether, in the facts and circumstances of the case the Income Tax Appellate Tribunal was right in law in holding that interest is leviable u/s 234B & 234C of the Act in case of an assessment order being framed on "Book Profits" u/s 115JB of the Act?" 2. On having heard learned senior counsel Shri Soparkar and having considered material on record, we are of the opinion that issue perhaps is no longer res integra as the same is decided by the Apex Court in case of Joint Commissioner of Income Tax v. Rolta India Ltd. reported in [2011] 330 ITR 470 (SC) as under : "It is clear from reading Sections 115JA and 115JB that the question whether a company which is liable to pay tax under either provision does not assume importance because specific provision(s) is made in the section saying that all other provisions of the Act shall apply to the MAT Company (Section 115JA (4) and Section 115JB(5)). Similarly, amendments have been made in the relevant Finance Acts providing for payment of advance tax under Sections 115JA and 115JB. So far ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons of Section 115JA of the Act. The return was processed under Section 143(1)(a) of the Act on 31.05.1999. While processing the return, the Assessing Officer vide order dated 14-11-2000, Annexure A.3, made an adjustment to the returned income for an amount of Rs. 5,80,579/- being the capital expenditure debited to profit and loss account and additional tax of Rs. 40,640/- was levied on the same and also interest under Sections 234B and 234C of the Act amounting to Rs. 12,50,250/- and Rs. 5,91,911/-respectively was charged. Feeling aggrieved, the assessee filed an appeal before the Commissioner of Income Tax (Appeals) [CIT(A)]. Vide order dated 5-7-2000, Annexure A.2, the appeal was allowed. Aggrieved by the order, the revenue filed an appeal before the Tribunal. Vide order dated 17-12-2004, Annexure A.1, the Tribunal allowed the appeal, set aside the order of the CIT(A) and restored that of the Assessing Officer. Hence, he present appeal by the assessee. 4. Learned counsel for the parties are ad-idem that the solitary issue involved in all the three appeals is whether interest under Sections 234B and 234C of the Act can be charged in respect of income which has been determined ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the assessed income had to be made in terms of the statutory scheme comprising Section 115J/115JA of the Act. Hence, levying of interest was inescapable. The assessee was bound to pay advance tax under the said scheme of the Act. Section 115J/115JA of the Act were special provisions which provided that where in the case of an assessee, the total income as computed under the Act in respect of any previous year relevant to the assessment year is less than 30% of the book profit, the total income of the assessee shall be deemed to be an amount equal to 30% of such book profit. The object is to tax zerotax companies. 8. Section 115J was inserted by Finance Act, 1987 w.e.f. 1.4.1988. This section was in force from 1.4.1988 to 31.3.1991. After 1.4.1991, Section 115JA was inserted by Finance Act of 1996 w.e.f. 1.4.1997. After insertion of Section 115JA, Section 115JB was inserted by Finance Act, 2000 w.e.f. 1.4.2001. It is clear from reading Sections 115JA and 115JB that the question whether a company which is liable to pay tax under either provision does not assume importance because specific provision(s) is made in the section saying that all other provisions of the Act shall ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4C is not leviable in cases where Section 115J applied. This view of the Karnataka High Court in Kwality Biscuits Ltd. case was not shared by the Gauhati High Court in Assam Bengal Carriers Ltd. v. CIT reported in [1999] 239 ITR 862 and Madhya Pradesh High Court in Itarsi Oil and Flours (P.) Ltd. v. CIT reported in (2001) 250 ITR 686 as also by the Bombay High Court in the case of CIT v. Kotak Mahindra Finance Ltd.reported in [2003] 130 Taxman 730 which decided the issue in favour of the Department and against the assessee. It appears that none of the assesses challenged the decisions of the Gauhati High Court, Madhya Pradesh High Court as well as Bombay High Court in the Supreme Court. However, it may be noted that the judgment of the Karnataka High Court in Kwality Biscuits Ltd. was confined to Section 115J of the Act. The Order of the Supreme Court dismissing the Special Leave Petition in limine filed by the Department against Kwality Biscuits Ltd. is reported in [2006] 284 ITR 434. Thus, the judgment of Karnataka High Court in Kwality Biscuits stood affirmed. However, the Karnataka High Court has thereafter in the case of Jindal Thermal Power Company Ltd. v. Dy. CIT [2006] 154 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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