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TMI Blog2022 (8) TMI 582X X X X Extracts X X X X X X X X Extracts X X X X ..... ay advance tax on the respective due dates in respect of such windfall gain. If on a particular due date for payment of advance tax, the facts show that there is no liability to pay advance tax, non-payment of advance tax on the due date may not be considered sufficient to attract interest u/s 234C. If the returned income is higher due to unexpected income received subsequent to earlier due dates, the shortfall in payment of advance tax instalment in earlier date may not attract interest. As far as income under the head business/profession is concerned, interest under section 234C of the Act shall not be chargeable on default in payment of advance tax in respect of such income only in the first year of business/profession. For income in the nature of windfall gain/unexpected income under other heads of income, provisions of S. 234C (1) shall not apply to any shortfall in the payment of the advance tax due on such income if the same is of the nature which can't be foreseen by the assessee so as to enable him to estimate such income for the purpose of payment of advance tax. However, the above relaxation in payment of advance tax instalments is subject to condition that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yable, interest, figures of income returned and other figures embodied in the return were accepted by the CPC Bangalore. Except, interest u/s 234C was enhanced by Rs 12, 31,304/- by CPC, Bangalore. 4. In response to the said intimation the assessee had filed an application for rectification u/s 154. This application of the assessee, filed u/s 154 also rejected by CPC Bangalore. Being aggrieved, assessee preferred an appeal before the National Faceless Appeal Centre (NFAC), Delhi. 5. Ld. CIT (A), (NFAC) also endorsed the views taken by CPC Bangalore and appeal of the assessee was rejected. Against this action of (NFAC) assessee preferred an appeal before us for adjudication. We have examined the intimation issued u/s 143(1) by CPC Bangalore, order of Ld. CIT (A) and submission of assessee along with the paper book. 6. For sake of clarity and proper appreciation of the issue involved we are reproducing herein below the provisions of Section 234C: Interest for deferment of advance tax. 234C. (1) [Where in any financial year, - [(a) an assessee, other than [the assessee referred to in clause (b)], who is liable to pay advance tax under section 208 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [(c) income under the head Profits and gains of business or profession in cases where the income accrues or arises under the said head for the [first time; or]] [(d) the amount of dividend income,] 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) [or clause (c) [or clause (d)]], as the case may be, had such income been a part of the total income, as part of the [remaining instalments of advance tax which are due or where no such instalments are due], by the 31st day of March of the financial year:] [Provided further 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 increase in the rate of surcharge under section 2 of the Finance Act, 2000 (10 of 2000), as amended by the Taxation Laws (Amendment) Act, 2000 (1 of 2001), and the assessee has paid the amount of shortfall, on or before the 15th day of March, 2001 in respect of the instalment of advance tax due on the 15th day of June, 2000, the 15th day of September, 2000 and the 15th day of December, 2000 :] [Provid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons under the head capital gains arose in the case of assessee i.e., on 28-02-2018 and 28-03-2018. Assessee promptly discharged his liability of advance tax u/s 234C on 15-03-2018 and 31- 03-2018 respectively. We have considered the order of Ld. CIT (A) wherein he relied on circular no 13/201-Income Tax, dated 09-11-2001, issued by the CBDT and the decision of hon ble Supreme Court in the case of CIT Vs Rolta India Ltd. Vide CIVIL APPEAL NO. 135OF 2011 has upheld the levy of interest u/s 234B and 234C. in a case of assessee being a company on the basis of book profit u/s 115JB. An identical issue had been considered by the hon ble Mumbai High Court in the case of JCIT Vs Summit Industries Ltd (Supra.) and decided in the favour of the revenue. Similarly, hon ble Karnataka High Court in the case of Kwality Biscuits Ltd Vs CIT 243 ITR 519 and hon ble ITAT Jaipur bench in the case of M/s GIE Jewels (ITA No. 794/JP/2017), decided in the favour of charging interest u/s 234C of the Act. 8. We have analysed circular no.13, cases decided in favour of revenue (supra.) and relied upon by the Ld. CIT (A). This circular and the case laws relied upon by the Ld. CIT (A) are distinguishable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2(3)(3), Mumbai Section 234C of the Income-tax Act, 1961 - Interest, chargeable as - Assessment year 1996- 97 - Capital gains accrued to assessee on account of sale of an asset in months of May 1995 and July 1995 - It filed its return for assessment year 1996-97 showing long-term capital gains - Assessee had paid advance tax in instalments after date of sale of assets in view of amendment to proviso to section 234C by Finance (No. 2) Act, 1996 with effect from 1-4-1997 - Revenue authorities held that capital gains in instant case had accrued in months of May, 1995 and July, 1995 and assessment year in question being assessment year 1996-97, amended provision was not applicable as it came into effect from assessment year 1997-98 - Whether amendment to proviso to section 234C by Finance (No. 2) Act, 1997, with effect from 1-4-1997 is clarificatory in nature and same is to be applied retrospectively - Held, yes - Whether since assessee had paid taxes as part of instalments due after date of sale of asset in accordance with amended provisions of section 234C, as such, there was no default on assessee s part and, thus, no interest was chargeable from it - Held, yes [2011] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yment of advance tax instalment in earlier date may not attract interest. As far as income under the head business/profession is concerned, interest under section 234C of the Act shall not be chargeable on default in payment of advance tax in respect of such income only in the first year of business/profession. For income in the nature of windfall gain/unexpected income under other heads of income, provisions of S. 234C (1) shall not apply to any shortfall in the payment of the advance tax due on such income if the same is of the nature which can't be foreseen by the assessee so as to enable him to estimate such income for the purpose of payment of advance tax. However, the above relaxation in payment of advance tax instalments is subject to condition that the assessee has paid the whole of the amount of tax payable in respect of his total income (including windfall gains, if any), as part of the remaining instalments of advance tax which are due (after accrual of windfall gain) or where no such instalments are due, i.e., in cases of windfall gain accruing after 15th of March of financial year, by the 31st day of March of the financial year. 13. In the light of discussion ..... X X X X Extracts X X X X X X X X Extracts X X X X
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