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TMI Blog2023 (2) TMI 274X X X X Extracts X X X X X X X X Extracts X X X X ..... eased to; (a) quash and set aside the computation of interest under Section 234B(2A) in the impugned order at Annexure-'A' to this petitioner and the same may be made giving effect to the prepaid taxes; (b) pending the admission, hearing and final disposal of this petition, to direct the respondent No.2 not to recover the settled amount to the extent of interest under Section 234B(2A)." 3. A survey under Section 133A of the Income Tax Act was carried out by the Income Tax Department on 15.03.2018 and 16.03.2018 at the premises of the petitioner group. The notice under Section 143(2) was issued on 28.09.2018. The petitioner preferred an application for settlement before respondent No.1 under Section 245C(1) on 09.12.2019, which was later withdrawn. After, the order of the Principal Commissioner of Income Tax, Rajkot under Section 264 was passed on 19.03.2020, the second application for settlement before the respondent No.1 under Section 245C(1) was filed on 21.08.2020. The respondent No.1 allowed the said application to proceed further. The final report under Rule 9 was called for from the Principal Commissioner of the Income Tax and respondent No.1 finally passed an orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mencing on the 1st day of April of such assessment year and ending on the date of making such application, on the additional amount of income-tax referred to in that sub-section; (b) where as a result of an order of the Settlement Commission under sub-section (4) of section 245D for any assessment year, the amount of total income disclosed in the application under sub-section (1) of section 245C is increased, the assessee shall be liable to pay simple interest at the rate of one per cent. for every month or part of a month comprised in the period commencing on the 1st day of April of such assessment year and ending on the date of such order, on the amount by which the tax on the total income determined on the basis of such order exceeds the tax on the total income disclosed in the application filed under sub-section (1) of section 245C; (c) where, as a result of an order under sub-section (6B) of section 245D, the amount on which interest was payable under clause (b) has been increased or reduced, as the case may be, the interest shall be increased or reduced accordingly;" 8. For an additional amount of income tax referred to in Section 245C(1), the assessee has been made l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1994, had surrendered the entire amount of Rs. 1,60,000/- unconditionally and had also authorized the department to adjust the same against any of his tax dues. The contention of the counsel for the Revenue, that the order passed by the Assistant Commissioner under Section 132(5) of the Act does not partake character of assessment though the assessee was willing to surrender the amount, would not change the position insofar as the petitioner's liability to deposit tax is concerned. We are referring to the said order only for the purpose of recording the Assistant Commissioner's views on the declaration made by the assessee concerning such amount. Far more fundamental fact is the declaration itself made by the assessee in his letter dated 10.01.1994. The contention that since no final assessment was framed, there was no question of adjustment of the amount towards any assessed income tax liability of the assessee also would not change the position. The question of depositing the tax in the context of the settlement proceedings arose by virtue of amended Section 245D of the Act. The amount of Rs. 1,60,000/- lying with the department had to be adjusted towards such liability. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the tax which is already paid within the due date, merely because the return was not filed in time, would make the provision penal in nature and exposes it to challenge of its vires. In the present case, the assessee had already deposited tax of Rs.10 lacs before the due date of filing return. The return, of course, was filed belatedly. While framing the assessment of such belated return, the Assessing Officer held that the assessee should pay further tax of Rs.4,82,941/- (after giving credit of Rs.25,533 which was paid by way of tax deducted at source). Thus, the Revenue's demand for interest for the entire amount of Rs.14,82,941/- under section 234A would fall foul to the ratio of the decision of the Delhi High Court in the case of Dr.Prannoy Roy (supra). The Revenue can collect interest under section 234A only on the additional sum of Rs.4,82,941/- and not on the entire amount. Permitting the Revenue to collect interest on the entire amount, though admittedly tax of Rs.10 lacs was already paid before the due date of filing of return, would render the provisions of section 234A penal in nature which was frowned upon by the Delhi High Court and on that basis, the decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (London) Ltd. v. Bremith Ltd. the Court did not feel bound by earlier decision as it was rendered 'without any argument, without reference to the crucial words of the rule and without any citation of the authority'. It was approved by this Court in Municipal Corporation of Delhi v. Gurnam Kaur. The bench held that, 'precedents subsilentio and without argument are of no moment'. The court thus have taken recourse to this recourse to this principle for relieving from injustice perpetrated by unjust precedents. A decision which is not express and is not founded on reasons nor it proceeds on consideration of issue cannot be deemed to be a law declared to have a binding effect as is contemplated by Article 141. Uniformity and consistency are core of judicial discipline. But that which escapes in the judgment without any occasion is not ratio decidendi. In B. Sharma Rao v. Union Territory of Pondicherry it was observed, "it is trite to say that a decision is binding not because of its conclusion but in regard to its ratio and the principles, laid down therein'. Any declaration or conclusion arrived without application of mind or preceded without any reason cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4B comes into operation when there is default in payment of advance tax. Liability to pay interest under Section 245D(2C) arises when additional amount of income-tax is not paid within time specified under sub-section (2A). Section 245D(6A) fastens liability to pay interest when tax payable in pursuance of an order under sub-section (4) is not paid within the specified time. Therefore, when interest is charged in respect of the said provisions it does not amount to double levy of interest, as the infractions are different." Thus, neither the decision in the case Anjum M.H.Ghaswala nor the case of Damani Brothers involve directly the question with respect to charging of interest under section 234A of the Act even when tax was already paid before the due date. We, therefore, cannot uphold the contention of the counsel for the Revenue that the decision of the Delhi High Court in the case of Dr.Prannoy Roy (supra) should be held to have been decided per incuriam or sub-silentio. 10. It is, of course, true that there is minor difference between the case of Dr.Prannoy Roy (supra) and the case of the present assessee on hand. In the case of Dr.Prannoy Roy (supra), the assessee had paid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to 1988-89 under Sections 139(8), 215 and 217 of the Act ? The Court has held thus : "7. In relation to issue No.1, the contentions raised on behalf of the petitioners may have merited consideration if the Apex Court decision had not categorically dealt with the issue, though in a different context. The question posed before the Apex Court in the case of Commissioner of Income-tax Vs. Hindustan Bulk Carriers (supra) was what would be the second terminus for the purposes of computing the amount of tax or arriving at the figure of tax for the purposes of levy of interest under Sections 234A, 234B and 234C of the Act. In that context the Apex Court has come to the conclusion that the order of the Commission made under Section 245D(4) of the Act is in relation to the additional income tax payable on the undisclosed income, namely, income which was not disclosed in the return of income filed by an assessee. Hence, for the purposes of computing the interest which is chargeable under the provisions of the Act the contention that the second terminus (the first being already provided in the Act and there being no dispute as to the same) would not be the terminus normally provided by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITR 1 (SC). The further plea that there is no requirement to pay interest as no points of terminus have been fixed is equally untenable because the Constitution Bench held that the levy is mandatory. Equally without substance is the plea taken that the terminus has to be as provided in relation to disclosed income. It cannot be even countenanced that no interest is chargeable for that portion of the income forming part of the total income as determined by the Commission which was not earlier disclosed before the Assessing Officer." xxx xxx " There is another way of looking at the issue. Section 234B(3) provides differently for regular assessment and reassessment. In a reassessment, ordinarily income assessed is more than what was determined originally. If two different periods are provided to meet such a situation, it is inconceivable that the Legislature intended to totally give a go by to interest on the income which for the first time is disclosed before the Commission. By analogy and harmony, the period has to be till the date of the Commission's order. To put it differently, the interests charged in terms of sections 234A, 234B and 234C become payable on the income alre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on that arose for consideration was whether the Settlement Commission constituted under Section 245B has jurisdiction to reduce or waive interest chargeable under Sections 234A, 234B and 234C while passing the orders of settlement under Section 245D(4) of the Act. The Court held that the Commission, after examination of the records and reports submitted to it on availing and affording an opportunity to the applicant and to the Commission of being heard may pass such order as it thinks fit on the matters covered by the application, provides that Section 245D(4) confers wide powers on the Commission in the process of settling a case, the Act still mandates that the same will be done in accordance with the provisions of the Act. The Court, while answering to the question as to whether under Sub-section 6 which contemplates providing for the terms of settlement of tax, penalty or interest, empowers the Commission to waive or reduce the interest payable under Sections 234A, 234B or 234C of the Act, when arises for settlement before the Settlement Commission, answers that the interest for default in furnishing return of income, in payment of advance tax and interest for deferment of adv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as to be rejected." 13. Reverting to the facts on hand, it appears that the challenge herein is to the orders passed under Section 245D(4) of the Income Tax Act dated 29.01.2021 for the Assessment Year 2015-16 to 2018-19, wherein it levied the interest under Section 234B(2A) and the prepaid taxes have not been credited. 14. The petitioner is a partnership firm. A survey under Section 133A was carried out on 15.03.2018 and 16.03.2018. The application for settlement before the respondent was after the notice under Section 143(2) has been issued on 28.09.2018. Such an application dated 09.12.2019 has been withdrawn. The order came to be passed by the Commissioner of Income Tax, Rajkot under Section 264 on 19.03.2020 and the petitioner preferred second application for settlement under Section 245C(1) on 21.08.2020, which was allowed. Final order passed on 29.01.2021 under Section 245D(4) included the interest under Section 234B(2A). His request was rejected by the respondent for calculating the interest only on the additional income offered without providing the set off on the prepaid taxes. 15. In case of M/s. Shiv Shipping Services and in case of M/s. Shiv Shipping & Logistics, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion passes subsilentio. 19.1 In the very decision, this Court had taken note of the various other decisions of the Apex Court as well to eventually hold that the double levy of interest is not permissible and that principle is applicable when the interest is chargeable more than once for the same set of infractions. It also has pointed out as to how the provisions of the Act operate in different fields and there is no statutory bar on the levying of the interest as the levy is separately for different infractions. 19.2 Section 234B would apply when there is a defect in payment of advance tax. Under Section 245D(2C), the interest liability arises when within the time specified under sub-section (2A) the additional amount of income tax is not paid, whereas the interest needs to be paid under Section 245D(6A) when the tax payable in pursuance of an order under sub-section (4) is not paid within the specified time period. 20. In the matter before this Court, the assessee had deposited a sum of Rs. 10,00,000/- under Section 140A of the Act and eventually, the assessing officer assessed the tax liability of the assessee at total Rs. 15,08,474/-. Thus, the tax short paid was Rs. 4,82, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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