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TMI Blog2021 (3) TMI 471X X X X Extracts X X X X X X X X Extracts X X X X ..... mating the payment of advance tax. Thus no interest shall be chargeable under section 234B and C of the Act on tax liability arising on assessee by virtue of retrospective amendment under section 115 JB. See M/S. NHPC LTD.[ 2016 (2) TMI 676 - ITAT DELHI] - ITA No.2508/Bang/2019 - - - Dated:- 8-3-2021 - Shri. Chandra Poojari, Accountant Member And Smt. Beena Pillai, Judicial Member For the Assessee : Shri Pradeep Kumar, CIT(DR) For the Revenue : Shri V Srinivasan, Advocate ORDER PER BEENA PILLAI, JUDICIAL MEMBER Present appeal has been filed by revenue against order dated 27/09/2019 passed by the Ld.CIT(A)-1, Bangalore on following grounds of appeal: 1.The order of the Learned CIT(Appeals), in so far as it is prejudicial to the interest of revenue, is opposed to law and the facts and circumstances of the case. 2.The Ld.CIT(A) erred in deleting the interest charged u/s.234B and 234C of the Act. 3.The Ld.CIT(A) erred in deciding the issue which is not emanating from giving effect order. 4The Ld.CIT(A) erred in holding that retrospective amendment of provision without affect the charge of interest as on the date of giving effect order. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income of assessee under regular provisions of the Act at ₹ 13,94,66,290/-, thereby reducing the addition made towards deemed dividend. Further, in the order giving effect, the Ld.AO retained the income assessed under section 115 JB of the Act at ₹ 1,20,97,36,141/- that was confirmed in the appeal by the Ld.CIT(A). The Ld.AO however, varied the interest computed under section 234B and C in the order giving effect to, based upon the original assessment order under section 153A read with 143(3) of the Act, dated 30/03/2015, and worked out the tax payable at ₹ 6,32,66,040/-. 7. Aggrieved by the high interest imposed by the Ld.AO under section 234B and C while passing order giving effect to, assessee preferred appeal before the Ld.CIT(A). The Ld.CIT(A) after considering the submissions, allowed the ground of assessee by holding as under: 5.2. Ground No.2 relates to the computation of interest u/s 234B and 234C of the Act, on account of certain additional income offered pursuant the year under appeal, the appellant has been assessed on ₹ 120,97,36,141/-. The appellant had originally filed return 26.09.2008 computing the Book Profit of ₹ 87,00,58,628 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll at 100% 17,70,66,417 Total 33,70,66,417 Less : Depreciation on Crates claimed 76,00,000 Additional Book Profit offered 32,94,66,417 5.3 It is the contention of the appellan t that the levy of interest u/s.234B and 234C the Act, for the failure to pay advance-tax on the additional book profit justified because, the appellant cannot be expected to pay Advance-tax when there, was no requirement to treat the additional income as book profits u/s. 115JB of the Act as per the law in force during the ear under appeal. Such provisions were also not in the statute when ii r turn of income was filed by the appellant on 26.09.2008, as the said amendment was made by the Finance No.2 Act, 2009 with retrospective effect from O1.04.2001. Number of judgements have been relied upon before position that interest u/s.234B and 234C of the Act, cannot be advance tax is rendered payable due to retrospective amendment ring to tax certain income Many of the judgements cited are also in t of the provisions of section 115JB of the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 1 come into force with effect from April 1, 2001, the appellant cannot be held defaulter of payment of advance tax. As pointed on the last date of the financial year preceding the assessment year, as the book profit of the appellant in a with the provision of law was nil, we cannot conceive any advance tax which in essence is payable within the last financial year preceding the relevant assessment year a. In sections 207 and 208 or within the dates indicated in s of the Act which inevitably falls within the last date of the financial year preceding the relevant assessment year. Consequently, the assessee cannot be branded as a defaulter in payment of advance tax as mentioned above . 5.5 Further, the Hon'ble Bombay High Court has taken the similar view in the case of CIT vs JSW Energy Ltd. reported in 379 ITR 36 [Born.] in the context of clause [h] of explanation 1 that was brought in by the Finance Act, 2008 with retrospective effect from 01.04.2001. The Hon'ble Bombay High Court has taken the view that the levy, of interest uls.234B by virtue of the retrospective Amendment is not warranted. The following observations of the Hon ble Bombay High Court are relevant : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trospective effect. It is Well established that while it. is permissible for the Legislature to retrospectively legislate, such, retrospectivity is normally not permissible to creak offence retrospectively. There were clearly judgn7n decrees or orders of courts and Tribunals or authorities, which required to be neutralised by t validation clause. We can only assume that the judgment decree or orders, etc., had, in fact, held that person situate like the appellants were not liable as service providers. This is also clear from the Explanation to t valuation section which says that no act or acts on the p of any person shall be punishable as an offence hi would not have been so punishable if the section had it come into force. 8. The liability to pay interest would only arise on and is really in the nature of a quasi punishment liability although created retrospectively could not the punishment of payment of interest with retrospective effect. 20. The Supreme Court held that the liability to pay interest would only arise on default and is really in the nature of a quasi punishment. The liability to tax although credited retrospectively could not entail punishment of payme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d u/s.143(3) dated b and hence, the order passed uls.143(3) rws 153A of the Act dated 30.3.2015 is reassessment. It is the appellant's contention that in a case of reassessment, interest u/s.234B(3) alone can be levied and not interest ) of the Act. 5.9 1 have perused the provisions of section 234B(1) and 234B(3) as it was for the year under appeal. As per the said provisions interest u/s.234B(3) was leviable at 1%, per month for the period from the day following the regular assessment and ending with the reassessment. Further, this interest was leviable on an amount by which tax on reassessment exceeded the tax on regular assessment. In other words, in case of reassessment u/s.148 or 153A of the Act, the interest chargeable u/s.234B of the Act, will consist of the interest already levied u/s.234B(1) of the Act, as per the regular assessment and further interest fm the date of regular assessment to the date of reassessment. The interest us.24B(3) will be computed on the differential tax as a result of re-assessment, which is in addition to the interest already levied u/s. 23413[1] that has been imposed in the original assessment. I find from the regular assessment order u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kata bench in case of Usha Martine Telematics Ltd. vs ITO in ITA No.516/Kol/2010 by order dated 19/01/2012 12. We are reproducing the observation of Hon ble ITAT Delhi bench in case of NHPC Ltd. vs ACIT(supra) on similar issue, wherein all the above decisions relied by the Ld. Counsel has been referred to and relied as under: 20. The Revenue has also preferred an appeal, for assessment years 2004-05 and 2005-06 vide appeal nos. 422 423/Del/2013 raising following grounds :- (1) Whether the ld. CIT (A) was right in law in deleting the interest amounting to ₹ 76,52,089/- charged u/s. 234B of the Act, since charging of interest u/s. 234-B is consequential in nature (2) Whether the ld. CIT (A) was right in law in deleting the interest amounting to ₹ 76,52,089/- charged u/s. 234B of the Act consequent to the addition made in pursuant to the amended provisions of section 115JB of the Act (3) That the appellant craves for the permission to add, delete or amend the grounds of appeal before or at the time of hearing of appeal. 21. The main ground of the Revenue's appeal is regarding deletion of interest charged under Section 234B of the Act conse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o default in payment of advance tax for the assessment year 2006-07. The computation of income based on which the advance tax was paid was in tune with the law prevailing on the date on which tax was due and payable. Any further addition in the income by way of amended provisions and which were incorporated subsequently, therefore, does not attract payment of interest as there is no default. 13. Mr. Kaka also invited our attention to section 115JB and particularly, insertion of clause (h) in Explanation (1). That clause reads as under : (h) The amount of deferred tax and the provision therefor. 14. This clause has been substituted by Finance Act, 2008 with restrospective effect from 1st April, 2001. Prior to the same it read as under : Prior to its substitution, read as under : '4. Substituted for the portion beginning with the words if any amount referred and ending with the words as reduced by by the Finance Act, 2008, w.r.e.f. 1.4.2001. If any amount referred to in clauses (a) to (g), is debited to the Profit and Loss account, and as reduced by.... 15. The Tribunal in this regard noted rival contentions and the admitted facts. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2001, by the Finance Act, 2001. The appellant disputed its liability to make any payment for service tax on the ground that it did not broadcast. The Commissioner, however, held against the appellant. The matter was carried before the Commissioner of Income Tax (Appeals) and during pendency of appeal the Finance Act, 2001 was amended by the Finance Act, 2002. The effect of amendment, inter alia, was to make an agent, such as the appellant, before the Supreme Court, liable to pay service tax as broadcaster. 19. The Supreme Court noted that the Appellants' appeal pending before the Commissioner was rejected by him on the basis of this amendment. The tribunal also maintained this order and that part of the order passed by the Commissioner was not challenged in appeal. However, the appellant was aggrieved by the fact that the tribunal held it liable to pay interest on the amount which it was required to pay by reason of the 2002 amendment. The assessee contended that once the amendment was brought in, pending the appeal, there was no question of applying section 234B or any analogus provision and payment of interest. It is in that regard that the Hon'ble Supreme Court hel ..... X X X X Extracts X X X X X X X X Extracts X X X X
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