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TMI Blog2018 (5) TMI 1268X X X X Extracts X X X X X X X X Extracts X X X X ..... TMI 112 - MADRAS HIGH COURT), does not lay down the correct legal principle that that, interest under Sections 234 A, 234 B and 234 C can be levied even if income is computed under Section 115 J. We may hasten to add that the Division Bench in Geetha Ramakrishna Mills Pvt. Ltd's case (supra), opined that the Appeal filed by the Revenue against the judgement of the Karnataka High Court in the case of Kwality Biscuits Ltd., (1999 (11) TMI 48 - KARNATAKA High Court) was dismissal simpliciter (2006 (4) TMI 121 - SUPREME Court) and would not be a declaration of the law. However, as pointed out by us earlier, it were the Civil Appeals, which were dismissed by the Hon'ble Supreme Court and not the Special Leave Petitions. Decided in favor of assessee. - T.C.(A).No. 875 of 2008 M.P.No.1 of 2008 - - - Dated:- 9-4-2018 - T. S. Sivagnanam And N. Seshasayee, JJ. For the Appellant : Mr. S.Sriraman For the Respondent : Mr. S.Rajesh Mr.T.R.Senthilkumar JUDGEMENT (Judgement of the Court was delivered by T.S.Sivagnanam, J.,) Heard Mr. S.Sriraman, the learned appearing for the appellant, and Mr.S.Rajesh, the learned Junior Standing Counsel for Mr.T.R.Senthilkumar, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rect legal principle and requires reconsideration and the decision, which holds the field on the said issue is the decision of the Karnataka High Court in Kwality Biscuits Ltd., Vs. CIT [(2000) 243 ITR 0519: (2000) 110 TAXMAN 0047 (Kar)], which was affirmed by the Hon'ble Supreme Court in CIT Vs. Kwality Biscuits Ltd [(2006) 284 ITR 0434 (SC)]. 6. Further, the learned counsel pointed out that there are other decision of the High Courts, which have held that no interest is payable under Sections 234 B and 234 C, as book profits under Section 115 J can be determined only after the end of the relevant financial year. Therefore, it is submitted that the provisions of Sections 207, 208 or 209 cannot be made applicable and accordingly, interest under Section 234 B and C cannot be charged. The decisions relied upon by the learned counsel for the appellant are as follows:- i) Ester Industrie Ltd., Vs. CIT [(2006) 206 CTR 0260] (Delhi); ii) DCIT Vs. Associated Crown Closures Pvt. Ltd., (2009) 315 ITR 0291(Gujaraj ) iii) DCIT Vs. Farmson Pharmaceuticals Gujarat Ltd., (2012) 347 ITR 0394 (Gujarat) iv) DCIT Vs. Madhusudar Industries Ltd., (2010) 322 ITR 0438 (Gujarat) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to pay advance tax in respect of tax payable under Section 115 JA/115 JB. The operative portion of the decision is as follows:- 9. 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 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% 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of that Circular itself indicates that a large number of companies liable to be taxed under 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 underSection 115JB and consequently provisions of Sections 234B and 234C imposing interest on default in payment of advance tax were also applicable. 11. In the aforementioned decision, (i.e. Rolta India Ltd.) the Hon'ble Supreme Court pointed out that the order passed by the Karnataka High Court in the case of Kwality Biscuits Ltd. (supra) stood affirmed by the intra Court, as the Special Leave Petition filed by the Department was dismissed in limine, as reported in (2006) 284 ITR 0434 (SC). As rightly pointed out by the learned counsel for the assessee, the decision of the Hon'ble Supreme Court in CIT Vs. Kwality Biscuits Ltd., (supra) was rendered in Civil Appeal Nos.1284 and 1285 of 2001, dated 26.04.2006, thereby, confirming the decision of the Karnataka High Court in the case of Kwality Biscuits Ltd. Vs. CIT (supra). 12. Thus, in the light of the law la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may reverse, modify or affirm the judgment, decree or order appealed against while exercising its appellate jurisdiction and not while exercising the discretionary jurisdiction disposing of petition for special leave to appeal. The doctrine of merger can, therefore, be applied to the former and not to the later. iv) An order refusing special leave to appeal may be a non-speaking order or a speaking one. In either cases, it does not attract the doctrine of merger. An order refusing special leave to appeal does not stand substituted in place of the order under challenge. All that it means is that the Court was not inclined to exercise its discretion so as to allow the appeal being filed. v) If the order refusing leave to appeal is a speaking order, i.e., gives reasons for refusing the grant of leave, then, the order has two implications. Firstly, the statement of law contained in the order is a declaration of law by the Supreme Court within the meaning of the Art.141 of the Constitution. Secondly, other than the declaration of law, whatever is stated in the order are the findings recorded by the Supreme Court which would bind the parties thereto and also the Court, Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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