Case Law Details
M/s GIE Jewels Vs. Income Tax officer (ITAT Jaipur)
Section 115J/115JA are special provisions. Section 207 envisages that tax shall be payable in advance during any financial year on current income in accordance with the scheme provided in Sections 208 to 219 (both inclusive) in respect of the total income of the assessee that would be chargeable to tax for the assessment year immediately following that financial year. Section 215 (5) of the Act defined what is “assessed tax”, i.e., tax determined on the basis of regular assessment so far as such tax relates to income subject to advance tax. The evaluation of the current income and the determination of the assessed income had to be made in terms o f the statutory scheme comprising Section 115J/115JA of the Act. Hence, levying of interest was inescapable. The assessee was bound to pay advance tax under the said scheme of the Act. Section 115J/115JA of the Act were special provisions which provided that where in the case of an assessee, the total income as computed under the Act in respect of any previous year relevant to the assessment year is less than 30% of the book profit, the total income of the assessee shall be deemed to be an amount equal to 30% of such book profit. The object is to tax zero tax companies.
Section 115JB, with which we are concerned, is a self-contained code pertaining to MAT, which imposed liability for payment of advance tax on MAT companies and, therefore, where such companies defaulted in payment o f advance tax in respect of tax payable under Section 115JB, it was liable to pay interest under Sections 234B and 234C of the Act. Thus, it can be concluded that interest under Sections 234B and 234C shall be payable on failure to pay advance tax in respect o f tax payable under Section 115JA/115JB. For the aforestated reasons, Circular No. 13/2001 dated 9.11.2001 issued by CBDT reported in 252 ITR(St.)50 has no application. Moreover, in any event, para 2 of that Circular itself indicates that a large number of companies liable to be taxed under MAT provisions of Section 115JB were not making advance tax payments. In the said circular, it has been clarified that Section 115JB is a self-contained code and thus, all companies were liable for payment of advance tax under Section 115JB and consequently provisions of Sections 234B and 234C imposing interest on default in payment of advance tax were also applicable.
Honorable Supreme Court in case of JCIT vs. Rolta India Ltd. (supra) has decided this issue on merit after considering the decision of Honorable Karnataka High Court in case of Kwality Biscuits Ltd. vs. CIT 243 ITR 519 and held that the interest u/s 234B and 234C shall be payable on failure to pay advance tax in respect of the tax payable u/s 115JA and 115JB. Following the decisions of Honorable Supreme Court in case of JCIT vs. Rolta India Ltd. (supra), Honorable Bombay High Court as well as Honorable Punjab and Haryana High Court cited above we do not find any error or illegality in the impugned orders of the ld. CIT(A).
FULL TEXT OF THE ITAT ORDER IS AS FOLLOWS:-
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