2009 (1) TMI 6

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..... as delivered by F.I. REBELLO, J. - The assessee has preferred this Appeal against the order dated 13th January, 2006 whereby the Appeal preferred by the assessee against the order of C.I.T. (Appeals) was dismissed. 2. Three questions had been framed. In our opinion, if read together, they raise the same question and accordingly the Appeal is admitted on the following question:- "Whether on the facts and in the circumstances of the case and in law, the Tribunal was right in holding that interest under Section 234B and 234C was leviable in case of computation of income under the provisions of Section 115JA of the Act?" 3. It was the submission on behalf of the assessee that in a case of computation of income under the provisions .....

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..... n 234B and Section 234C is compensatory in nature it has no element of penalty. Therefore, if there is non-payment or short payment of tax on the current income, then the assessee has to pay interest as the income has accrued to the assessee for the previous year. The distinction as sought to be made in respect of companies falling under Section 115J was not accepted. While holding so, the learned Bench observed that the view being taken is supported by the judgment of the Gauhati High Court in the case of Assam Bengal Carriers Ltd. vs. CIT (1999) 239 ITR 862 as also the judgment of the Madhya Pradesh High Court in the case of Itarsi Oils and Flours (P) Ltd. vs. CIT (2001) 250 ITR 686. The Court further held that they disagreed with .....

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..... be made applicable, until and unless the accounts are audited and the balance sheet is prepared as even the assessee may not known whether the provision of section 115J would be applicable or not. The liability would be after the book profits are determined in accordance with the Companies Act. Accordingly, the Court held that interest could not be charged under Section 234B and 234C of the Income Tax Act. In the instant case we are concerned with Section 115JA under Chapter XIIB. The terminology used in Section 115JA is same or similar as contained in Section 115J. The judgment of the Karnataka High Court was taken in Appeal by way of Special Leave to the Supreme Court in Commissioner of Income-tax v. Kwality Biscuits Ltd., (2006) 284 .....

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