Emem Freight Forwarders Vs Dy. CIT (ITAT Mumbai)
Section 210 of the Act requires the assessee to pay advance tax at his own or in pursuance of the order of the assessing officer on or before each of the due dates specified under section 211 of the Act. In the instant case, the assessment year involved is 2006-07. Survey operation under section 133A of the Act was conducted at the business premises of the assessee on 5-3-2008 i.e., after close of the financial year relevant to the assessment year 2006- 07. Now the question arises whether the assessee as per the provisions of section 210 read with section 208 of the Act for the financial year relevant to the assessment year 2006-07 for which it declared the income on 5-3-2008 is liable to pay advance tax during financial year 2005-06. This income was not in existence during financial year 2005-06 neither as per assessee’s own account or in pursuance of the order of the assessing officer under section 210 of the Act, as this income has arisen only when survey has taken place as on 5-3-2008. The assessee cannot foresee during financial year 2005-06 that there will be survey in 2008 and as per Revenue, they have found certain discrepancies and assessee will be compelled to disclose income for assessment year 2006-07 to buy peace and avoid litigation. There is no iota of evidence brought by the Revenue that this income has actually arisen in assessment year 2006-07. Even the provisions of section 209(1) of the Act talks of the payment of advance tax in the financial year. In our view, in view of the peculiar facts of this case, in the financial year neither the assessee can foresee accrual of the income which has arisen as on 5-3-2008 nor the assessing officer could have required the assessee to pay advance tax in pursuance of an order made under section 210 of the Act. In view of this fact, we are of the view that due to the clear mandate of section 234B (1) of the Act, since the assessee was not liable to pay advance tax under section 208 or 210 of the Act, therefore, that the assessee was not liable to pay advance tax in respect of income of Rs. 90 lakhs which he declared on 5-3-2008. Since the assessee was not liable to pay advance tax, no question of deferment of advance tax under section 234C of the Act arises. In view of this fact, we are of the view that it is a case where interest cannot be levied under section 234B and 234C of the Act on the assessee.
FULL TEXT OF THE ITAT ORDER IS AS FOLLOWS:-
This appeal filed by the assessee is against the order of the learned Commissioner (Appeals)-33, Mumbai dated 30-11-2010 pertaining to assessment year 2006-07.
2. The assessee has even though taken six grounds of appeal, but grounds No. 2 to 6 were not pressed, therefore, they are dismissed as not pressed.
3. The only ground, which survived for our disposal reads as under :–
1. The learned Commissioner (Appeals)-33 erred in not reducing interest charged under section 234B and 234C of Rs. 9,58,591 as against interest chargeable of Rs. 1,66,906 in the facts and circumstances of the case.
4. The assessee is engaged in the business of freight forwarding. There had been a survey at the premises of the assessee on 5-3-2008. During the course of survey, few discrepancies were noticed and the assessee to avoid litigation disclosed/offered a sum of Rs. 90 lakhs detailed as under :–
