Case Law Details
IN THE ITAT DELHI BENCH ‘E’
Deputy Director of Income-tax
versus
MGB Metro Group Buying HK Ltd.
IT Appeal Nos. 4833 & 4834 (Delhi) of 2012
[Assessment Years 2005-06 & 2006-07]
November 16, 2012
ORDER
Joginder Singh, Judicial Member
The Revenue is aggrieved by the impugned order dated 22.06.2012, passed by the learned first appellate authority, wherein the interest levied under section 234B of the Act was deleted.
2. During hearing of this appeal, we have heard Shri Jasdeep Singh, ld. Senior DR whereas nobody is present for the assessee. Ld. Senior DR defended the assessment order levying the interest u/s 234B of the Act and invited our attention to section 209 for computation of advance tax. Plea was also raised that section 202 of the Act was also not considered by Hon’ble High Court while coming to a particular conclusion. Plea was also raised regarding amendment in section 209 inserted by the Finance Act, 2012 w.e.f. 1.4.2012. He also relied upon the decision from Hon’ble Apex Court in the case of CIT v. Anjum M.H. Ghaswala [2001] 252 ITR 1/119 Taxman 352.
3. We have considered the submissions put forth by the ld. Senior DR and perused the material available on record. The facts, in brief, are that a survey operation u/s 133A of the Act was conducted at the business premises of the assessee having liaison office at Okhla on 18.01.2007. During survey, mainly computers were found, prints were collected therefrom, which were inventorised. The claim of the assessee of exemption u/s 9(1)(i) of the Act was rejected and the assessee’s income was computed as 15.29% markup on the total expenses incurred by the assessee. Such working was claimed to be based on Rule 10B(1)(e) of the Rules by considering the transactional net margin method. Interest u/s 234A, 234B and 234C was also held to be leviable by the Assessing Officer. On appeal, the ld. CIT (A) by following the decisions as contained at page 38 of the impugned order held that the interest u/s 234B is not leviable. Aggrieved Revenue is in appeal before the Tribunal. So far as the contention of the ld. Senior DR regarding amendment inserted by the Finance Act, 2012, we are reproducing hereunder the proviso which is effective from 1.4.2012 :-
“Provided that for computing liability for advance tax, income-tax calculated under clause (a) or clause (b) or clause (c) shall not, in each case, be reduced by the aforesaid amount of income-tax which would be deductible or collectible at source during the said financial year under any provision of this Act from any income, if the person responsible for deducting tax has paid or credited such income without deduction of tax or it has been received or debited by the person responsible for collecting tax without collection of such tax.”
We are of the view that the aforesaid proviso inserted by the Finance Act, 2012 is prospective in nature and not with retrospective effect. The proviso was brought into operation w.e.f. 1.4.2012 whereas the Assessment Years involved are 2005-06 and 200607, therefore, we are not in agreement with this assertion of the ld. Senior DR because the said proviso is not retrospective in nature. Even otherwise, the language used in section 209(1) is regarding payment of advance tax in the financial year, therefore, the proviso is not attracted for the impugned assessment year. So far as the reliance by the ld. Senior DR in the case of Anjum M.H. Ghaswala (supra) is concerned, we find that while coming to a particular conclusion, the Hon’ble Delhi High Court also considered the aforesaid decision and then reached to a particular conclusion, consequently, the assessee was held to be not required to deposit any advance tax. In view of this fact, it was held that interest u/s 234B is not leviable. The Hon’ble Delhi High Court in the case of DIT v. Jacabs Civil Incorporated/Mitsubishi Corpn. [2011] 330 ITR 578/[2010] 194 Taxman 495, on identical issue, held that since the assessee is not liable for advance tax, therefore, cannot be charged interest for failure to pay advance tax. Identical view was expressed by Hon’ble Uttaranchal High Court in the case of CIT v. Sedco Forex International Drilling Co. Ltd. [2003] 264 ITR 320/[2004] 134 Taxman 109. In view of the facts stated in the impugned order and also in the absence of any adverse material brought on record, we find no infirmity in the same, therefore, the stand of the CIT (A) is affirmed.
4. Finally, both the appeals of the Revenue are dismissed.
