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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 ..... ly prayed that the order of the Ld.CIT(A) be reversed and that of the Assessing officer be restored. 6.The appellant craves leave to add, to alter, to amend or delete any of the grounds that may be urged at the time of hearing of approval." Brief facts of the case are as under: 2. Assessee is a private limited company and carries on business of manufacture and sale of aerated drinks, investment and real estate besides the business of generation of power using renewable source of energy. For year under consideration assessee filed its original return of income on 26/09/2008 declaring total income of Rs. 13,82,01,580/- is. Assessee also reported in book profit of Rs. 87,00,58,628/-under section 115 JB of the Act, which was adopted for computing the tax payable for year under consideration. The Ld.AO noted that assessee is also engaged in real estate business-investing in and letting out of properties on rent. 3. On 18/12/2012, search under section 132 of the Act was carried out in case of assessee and its franchisee bottlers of M/s Coca-Cola India Pvt. Ltd. Notice under section 153A was issued on 26/02/2014 requiring assessee to file return of income, in response to which, asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was computed at Rs. 87,03,95,824/-. After the completion of the assessment, Survey was conducted u/s,133A of the Act, by the A.O. On 24.07.2012. It was found in Survey that the appellant had claimed a deduction while computing Book Profit for the provisions made towards imp of Rs. 16 Crores and 100% depreciation on Windmill of Rs. 17,70,66,417/-. It was pointed out to the appellant in survey that the provisions of sec Act, were amended by the Finance No.2 Act, 2009, with retrospective from 01.04.2001. As per the Amendment made to Explanation 1 of the Act, clause (i) was introduced to provide that the book increased by the amount set-aside as provision for diminution it and therefore, the said claims were not allowable. Based on Amendment, appellant also agreed to re4se the Rs. 119,98,62,241/- on account of the increase to the Book Profits the above provisions debited to the Profit & Loss Account. It also filed a revised return of income after the survey on 02-11-2012. Which has formed the basis for assessment made u/s. 143[3] r.w.s 153A of the Act. In the Search and seizure operations conducted u/s.132 of the Act in the business premises of the appellant on 18/12/2012 and appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ein it has been held as follows: "11. A mere reading of those provisions leaves no doubt that the advance tax is an amount payable in advance during a year in accordance with the provisions of the Act in res total income of the assessee which would be chargeable the assessment year immediately following that financial year. Thus, in order to hold an assessee liable for payment of advance liability to pay such tax must exist on the last date of advance tax as provided under the Act or at least on the financial year preceding the assessment year in such liability arises subsequently, when the last date of payment of advance tax or even the last date of the financial year prep assessment year is over, it is inappropriate to suggest that the assessee had the liability to pay "advance tax" within the meaning of the Act. 12. In the case before us, the last date of the relevant financial year was March 31, 2001, and on that day, admittedly, the appellant had no liability to pay any amount of advance tax in with the then law prevailing in the country. Consequently the appellant paid no advance tax and submitted its regular return on October 31, 2001, within the time fixed by law wherei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ced above having been brought in with retrospective effect but by Finance Act 2008, the advance tax computation by the assessee for the year 2006-07 cannot be faulted and it cannot be said that the assessee is in default and therefore, there is any liability to pay interest in terms of section 234B of the Income-tax Act, 1961. 18. In the present case of Star India (P.) Ltd. v. CCE[2006] 280 ITR 321/150 Taxman 728 the Hon'ble Supreme Court held to be liable for failing to that the service of "broadcasting" was made a taxable service with effect from July 16, the Finance Act, 2001. The appellant disputed its liability to 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 and during pendency of appeal the Finance Act, 2001 was by the Finance Act, 2002. The effect of amendment, inter o make an agent, such as the appellant, before the Supreme Court 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 mainta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was no liability to pay interest in terms of this provision. That was because the assessee cannot be termed as defaulter in payment of advance tax computation on the basis of the un-amended (sic) provision therefore could not have been entertained. 21. We do not see any broader or wider question arising for our determination as the view taken even on this question is perverse or neither vitiated by any error of law apparent on the on the record". 5.6 Following the said judgements, similar view has also by the Hon'ble Mumbai Bench of the Tribunal in the case of Voda No.880/Mum/2014 dated 03.02.2016; the Delhi Bench of the H the case of NHCP Limited reported in 47 ITR (T) 561 and the Kolkata Bench of Hon'ble Tribunal in the case of Usha Martin Telematics No.516/Kol/2010 dated 19.01.2012. All these judgements are liability to pay advance tax on the Book Profit computed retrospective amendments. 5.7 Respectfully following the said judicial precedents relied upon by the appellant, I hold that interest u/s.234B and 234C of the Act, cannot be levied on the tax payable on the additional book profit of Rs. 32,94,66,417/-. Hence, the Assessing Office is directed to compute intere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the year under consideration. The Assessing Officer is directed accordingly. While doing so the Assessing Officer shall disregard the tax on the additional Book Profit due to retrospective amendment as per the directions contained in ground No.2 above. It is ordered accordingly." 8. Aggrieved by the above findings, revenue is in appeal before us now. 9. We have perused submissions advanced by both sides in light of records placed before us. 10. Admittedly, additional income under section 115 JB of the Act came to be computed on account of retrospective amendment made to section 115 JB by Finance Act (No. 2), 2009, with retrospective effect from 01/04/2001, wherein clause (i) was introduced to provide for increase in book profit by the amount set aside for provision in diminution in the value of asset. Since the clause (i) was not on statute book during the relevant assessment year, the assessee did not increase the book profits while estimating the payment of advance tax. 11. The Ld.Counsel placed reliance on following decisions: * Decision of Hon'ble Karnataka High Court in case of Sh. Vijay Kumar Saboo in ITA No. 65 and 66 of 2005 by order dated 18/07/2011 * Decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 22. Even on the merits of the appeal of revenue, issue is decided against the revenue. On identical issue considering levy of interest u/s. 234B of the act on retrospective amendment in section 115JB of the act Honourable Bombay high court in [2015] 60 taxmann.com 303/234 Taxman 133/379 ITR 36CIT v. JSW Energy Ltd. has held that interest u/s. 234B of the act cannot be charged when liability on the assessee has arisen because of retrospective amendment in the act. Honourable High court has held as under :- 11. Then, Mr. Tejveer Singh vehemently contended that in relation to question no. 2, the findings require detailed probe by this Court. He submits that the Tribunal was not right in law when it held that no interest under section 234B of the I.T. Act can be levied. Though several items have to be calculated while computing book profit and in terms of explanation to section 115JB of the I.T. Act, that explanation has been brought on the statute book and with retrospective effect from 1st April, 2001, therefore, this calculation of the tribunal is erroneous in law. 12. However, Mr. Kaka, learned senior counsel invited our attention to section 234B of the I.T. Act to submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ility to pay advance tax as provided under sections 207 and 208 of the I.T. Act within the time prescribed under section 211 of that Act. Noting the rival contentions, the Calcutta High Court proceeded to hold that the last date of relevant financial year was 31st March, 2001 and on that date, admittedly, the appellant before it had no liability to pay any amount of advance tax in accordance with the then law prevailing in the country. Consequently, the appellant paid no advance tax and submitted its regular returns on 31st October 2001, within the time fixed by law wherein it declared its total income and the book profit both as Nil. The amendment to section 115JB by virtue of Finance Act, 2002 and which was referred to in the Calcutta High Court judgment has retrospective effect from 1st April, 2001. 17. In the present case, what the assessee has pointed out is that some of the amounts included in the book profits as per Explanation (h) to section 115JB were brought in by the Finance Act, 2008 with retrospective effect from 1st April, 2001. The assessee cannot be held to be liable for failing to make a provision for payment of advance tax which was not possible on the last date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e that the judgments, decree or orders, etc., had, in fact, held that persons situate like the appellants were not liable as service providers. This is also clear from the Explanation to the valuation section which says that no act or acts on the part of any person shall be punishable as an offence which would not have been so punishable if the section had not come into force. 8. The liability to pay interest would only arise on default and is really in the nature of a quasi-punishment. Such liability although created retrospectively could not entail 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 the punishment of payment of interest with retrospective effect. It is this principle which has been laid down which is followed by the Calcutta High Court. It is that principle relied upon by the Calcutta High Court which has been applied by the Tribunal to the facts and circumstances of the present case. We do not think that the assessee before us can be c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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