Case Law Details

Case Name : M/s GIE Jewels Vs. Income Tax officer (ITAT Jaipur)
Appeal Number : ITA No. 794/JP/2017
Date of Judgement/Order : 08/12/2017
Related Assessment Year : 2013-14
Courts : All ITAT (5330) ITAT Jaipur (105)

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:-

These two appeals by the assessee are directed against two separate orders of Ld. CIT(A), Jaipur both dated 12.09.2017 for A.Ys. 2013-14 & 2014-15 respectively. The assessee has raised common grounds in these appeals, the grounds for A.Y. 2013-14 are as under:-

“1. On the facts and in the circumstances of the case and in law, the Learned CIT(A) has erred in confirming the action of the Learned Assessing officer in charging interest u/s 234B of the Income Tax Act, 1961 by wrongfully applying provisions of section 208 of the Income Tax Act, 1961 for depositing Alternative Minimum Tax (AMT) as self assessment tax and as advance tax. Thus the action of the Ld. AO deserves to be held bad in law and the consequent interest u/s 234B of Rs. 436625/-deserves to be deleted.

2. The Learned CIT(A) has erred in confirming the action of the Learned Assessing officer in treating AMT as Income Tax to be deposited in Advance as per the provisions of Section 208 of the Income Tax Act, 1961 and charged interest u/s 234B by alleging default in depositing advance tax. Thus the action of the Ld. AO deserves to be herd bad in raw and consequent interest u/s 234B of Rs. 436625/- deserves to be deleted.

3. On the facts and in the circumstances of the case and in law, the Learned CIT(A ) has erred in confirming the action of the Learned Assessing officer in not allowing application of assessee filed u/s 154 for not treating AMT as Income Tax without assigning any reason for such dis allowance.

4. The appellant craves leave to add, amend, modify, alter and/or withdraw any ground of appeal on or before the date of hearing. ”

2. The assessee is a partnership firm and engaged in the business of manufacturing, exports of silver and Gold jewellery as well as precious and semi precious stones. During the assessment proceedings completed u/s 143(3) the Assessing Officer accepted the return of income however, charged interest u/s 234B because the assessee did not pay the advance tax as per the provisions of section 115JC r.w.s. 208 of the Income Tax Act. The assessee subsequently filed an application u/s 154 of the I.T. Act and submitted that there is an apparent mistake on record of the assessment for charging interest u/s 234B. The assessee contended before the AO that the provisions of section 234B were not applicable for charging interest on account of non-payment of advance Alternative Minimum Tax (AMT). The AO rejected the application filed by the assessee u/s 154 of the Act. The assessee challenged the action of the AO rejecting the application u/s 154 before the ld. CIT(A) and contended that the provisions of section 234B were not applicable on alternative minimum tax liability u/s 115JC. The ld. CIT(A) has impressed with the contention of the assessee and upheld the decision of the AO in levying interest u/s 234 and rejecting the application filed by the assessee u/s 154 of the Act.

3. Before us, the ld. AR of the assessee has submitted that while filing the return of income the assessee made payment of alternative minimum tax under the provisions of section 115JC however, while completing the assessment the AO charged interest u/s 234B for not paying the alternative minimum tax as per scheme of advance tax u/s 208. The Ld. AR has contended that the provisions of advance tax u/s 208 is not applicable to the facts of the case and in respect of the tax payment made u/s 115JC. He has further contended that the reliance of CIT(A) on the decision of Honorable Supreme Court in case of JCIT vs. Rolta India Ltd 196 taxmann 594 as well as Honorable Karnataka High Court in case of Jindal Thermal Power Co. Ltd. vs. DCIT 154 taxman 547 is misplaced as these decisions are not on section 115JC but these decisions were rendered with reference to section 115JB which is in respect of MAT whereas section 115JC was introduced in the statute w.e.f. 01.04.2013 and proceeds for payment of alternative minimum tax for the assessee other than corporate assessee. The ld. AR then contended that in case of corporate assessee the books of accounts are required to be maintained as per the provisions of Companies Act whereas in case of other assessee when the books of account are not required to maintain as per companies Act then, it is not possible to estimate the income in advance with a reasonable accuracy. The ld. AR has thus contended that the provisions of Section 115JB cannot be compared with the provisions of section 115JC and therefore, the assessee cannot be expected to pay the advance tax on the basis of books profits in terms of section 115JC. The ld. AR then contended that the alternative minimum tax as per the provisions of section 115JC is payable an adjusted total income and as such income is deemed to be total income. There is nothing under this provision requiring payment of advance tax u/s 208 of the Act. Thus, in the entire chapter there is no a single word referring to payment of interest of any type leave aside section 234B. The ld. AR has further contended that deeming provisions create a legal fiction only for a definite purpose and they are limited to that purpose only and should not be extended beyond that unless it is clearly and expressly provided. Therefore, it is not permissible to impose the liability of supposition of law. In support of his contention he has relied upon the following decisions:-

(i) CIT vs. Elphinstone Sps & Wvg. Mills Co Ltd 40 ITR 142 (SC)

(ii) Balkrishnan Memon (MK) vs. ACED 83 ITR 162 (SC)

(iii) CIT vs. Amarchand N Shroof 48 ITR 59 (SC)

(iv) Executor & Trustees of Sir Cawasji Jehangir Vs. CIT 35 ITR 537 (Bom)

To sum up his arguments, the ld. AR has submitted that the provisions of section 115JC are introduced in the statute with the purpose to tax the other persons in addition to companies paying zero tax. The purpose of this section is limited to pay tax as per this provision and cannot extend to other provisions of the Act. i.e. 208 or 234B. There is vast different in the payment of advance tax and that of alternative minimum tax. The Advance tax is levied on current income and payment is based on estimate where as AMT is based on book profit which can be arrived at only on finalization of accounts by the auditors. In such circumstances AMT cannot be paid in advance tax and can be paid only after the end of the financial year that too on finalization of accounts. Therefore, it is patently wrong to apply advance tax provisions on payment of AMT. He has further contended that in case advance tax is found in excess of regular tax the same is refunded on completion of assessment u/s 143(1) or u/s 143(3). The excess payment of advance tax is not carried forward to set off against tax liability of subsequent assessment years whereas in case of payment AMT the same is never refunded and as per the provision of section 115JD(4) the payment of AMT shall be carried forward for credit up to subsequently 10th assessment years. Further, in case of advance tax the Revenue is liable to pay interest u/s 244A(a) of the Act but no such refund is allowed on payment of AMT. Thus, the ld. AR has submitted that the assessee cannot be held liable for advance tax section 208 on account of tax liability u/s 115JC and consequently no interest can be levied u/s 234B on such tax liability.

4. On the other hand, the ld. DR has submitted that the issue is covered by the decision of Honorable Supreme Court in case of CIT vs. Rolta India Ltd. 330 ITR 470 as well as decisions of Honorable Gujarat High Court in case of JCIT vs. Sumit Industries Ltd. 54 taxmann.com345 and decision of Honorable Punjab and Haryana High Court in case of CIT vs. Rana Sugars Ltd. 14 taxmann.com 191. The ld. DR has also relied upon the orders of the ld. CIT(A) and submitted that the ld. CIT(A) has followed the decision of Honorable Supreme Court as well as Honorable High Court while deciding this issue.

5. We have considered the rival submissions as well as relevant material on record. At the outset, we find that this issue of levy of interest u/s 234B in respect of tax liability in accordance with the provisions of section 115JC of the Act is a highly debatable issue and therefore, would be beyond the purview and scope of the provisions of section 154 of the Act where by only a mistake apparent and manifest on record can be rectified which does not require a long drawn reasoning or arguments on the issue. Therefore, the issue of levy of interest u/s 234B and applicability of the provisions of sections 207 and 208 of the Act cannot be decided in the proceedings u/s 154 of the Act. However, since neither the AO nor the CIT(A) has raised this objection against the application filed by the assessee u/s 154, therefore, we would consider and determine this issue on merits. The main thrust of the arguments of the ld. AR of the assesee is that the provisions of section 115JB cannot be compared with section 115JC because the assessee other than the corporate assessee are not required to maintain the books of accounts as per the provisions of Companies Act and therefore, it is not possible to estimate the book profit with a reasonable accuracy prior to finalization of accounts, the ld. AR has also contended that provisions of section 115JC are deeming provisions and cannot be extended to the other provisions of the Act to fasten any tax liability on the assessee. It is pertinent to note that section 115JC has been substituted by Finance Act, 2012 w.e.f. 01.04.2013 to bring in its fold all assessee other than a company. Prior to its substitution section 115JC was applicable only in respect of certain limited liability partnership. For ready reference we quote section 115JC as under:-

115JC. (1) Notwithstanding anything contained in this Act, where the regular income-tax payable for a previous year by a person, other than a company, is less than the alternate minimum tax payable for such previous year, the adjusted tota l income shall be deemed to be the total income of that person for such previous year and he shall be liable to pay income-tax on such total income at the rate of eighteen and one-half per cent.

(2) Adjusted total income referred to in sub-section (1) shall be the total Income before giving effect to this Chapter as increased by—

(i) deductions claimed, if any, under any section (other than section 80P) included in Chapter VI-A under the heading “C.—Deductions in respect of certain incomes”; 28[***]

(ii) deduction claimed, if any, under-section 10AA29 [; and]

29[(iii) deduction claimed, if any, under section 35AD as reduced by the amount of depreciation allowable in accordance with the provisions of section 32 as if no deduction under section 35AD was allowed in respect of the assets on which the deduction under that section is claimed.]

(3) Every person to whom this section applies shall obtain a report, in such form as may be prescribed 30, from an accountant, certifying that the adjusted total income and the alternate minimum tax have been computed in accordance with the provisions of this Chapter and furnish such report on or before the due date of furnishing of return of income under sub-section (1) of section 139.]

We find that the provisions of section 115JC though applicable to a different set off of persons however, the scheme and objective of the said provision is akin and pari materia to the provisions of section 115JB. The purpose and objects of introduction of provision in the statute is to pay the tax by the persons other than company on book profit even if the tax liability on regular assessment is zero. Therefore, the intent of legislation to introduce this provision is to bring the person other than the company in the preview of payment of tax of AMT on book profit who are otherwise paying zero tax or very less tax. In fact this is not a true tax liability but only collection of tax which can be adjusted against the future tax liability of assess and therefore, it ensures that the persons as specified under these provisions cannot be allowed to pay no tax for a long period of time. The ld. AR of the assessee has tried to make a distinction between the payment of advance tax and payment of AMT based on books profit and submitted that the payment of advance tax if found in excess of regular tax the same is refunded whereas the payment of AMT is never refunded but it can be adjusted as per the provisions of section 115JD (iv) of the Act. Further, the advance tax carries the interest u/s 244A but no such refund or interest is payable on the AMT. We find that this contention of the ld. AR is misconceived as even if an advance tax based on book profit is paid more the tax liability u/s 115JC on final book profit then the said excess amount of advance tax which is over and above tax payable u/s 115JC is refundable and also the provisions of section 244A are applicable on such refund. Therefore, the ld. AR has tried to project the AMT as an excess payment whereas the advance payment made based on book profit even found excess the same is refundable. The Hon’ble Supreme Court in case of CIT vs. Rolta India Ltd. (supra) has upheld the levy of interest u/ss 234B and 234C in case of the assessee being a company on the basis of book profit u/s 115JB. An identical issue has been considered by the Hon’ble Mumbai High Court in case of JCIT vs. Sumit Industries Ltd.(supra) and held in paras 7 to 10 as under:-

“7. The said question is raised in Tax Appeal No. 677/2006. It appears from the decision of the Apex Court that the decision of the Tribunal will have to be reversed. The Apex Court in case of Jt. CIT v. Rolta India Ltd. [2011] 330 ITR 470/196 Taxman 594/9 taxmann.com 36  held as under:

“It is clear from reading Sections 115JA and 115JB that the question whether a company which is liable to pay tax under either provision does not assume importance because specific provision(s) is made in the section saying that all other provisions of the Act shall apply to the MAT Company (Section 115JA(4) and Section 115JB(5)). Similarly, amendments have been made in the relevant Finance Acts providing for payment of advance tax under Sections 115JA and 115JB. So far as interest leviable under Section 234B is concerned, the section is clear that it applies to all companies. The prerequisite condition for applicability of Section 234B is that assessee is liable to pay tax under Section 208 and the expression “assessed tax” is defined to mean the tax on the total income determined under Section 143(1) or under Section 143(3) as reduced by the amount of tax deducted or collected at source. Thus, there is no exclusion of Section 115J/115JA in the levy of interest under Section 234B. The expression “assessed tax” is defined to mean the tax assessed on regular assessment which means the tax determined on the application of Section 115J/115JA in the regular assessment. “

8. Relying on the above said decision of Honorable Apex Court, where the issue of deletion of interest leviable under Section 234B and 234C of the Act, the Division Bench of this Court in the case of Riddhi Siddhi Gluco Boils Ltd. v. Asstt. CIT has held as under:

‘1. The assessee has challenged the order of Income Tax Appellate Tribunal dated 31.3.2010 raising following questions for our consideration:

“Whether, in the facts and circumstances of the case the Income Tax Appellate Tribunal was right in law in holding that interest is leviable u/s 234B & 234C of the Act in case of an assessment order being framed on “Book Profits” u/s 115JB of the Act? “

2. On having heard learned senior counsel Shri Soparkar and having considered material on record, we are of the opinion that issue perhaps is no longer res integra as the same is decided by the Apex Court in case of Joint Commissioner of Income Tax v. Rolta India Ltd. reported in[2011] 330 ITR 470 (SC)as under :

“It is clear from reading Sections 115JA and 115JB that the question whether a company which is liable to pay tax under either provision does not assume importance because specific provision(s) is made in the section saying that all other provisions of the Act shall apply to the MAT Company (Section 115JA (4) and Section 115JB(5)). Similarly, amendments have been made in the relevant Finance Acts providing for payment of advance tax under Sections 115JA and 115JB. So far as interest leviable under Section 234B is concerned, the section is clear that it applies to all companies. The prerequisite condition for applicability of Section 234B is that assessee is liable to pay tax under Section 208 and the expression “assessed tax” is defined to mean the tax on the total income determined under Section 143(1) or under Section 143(3) as reduced by the amount of tax deducted or collected at source. Thus, there is no exclusion of Section 115J/115JA in the levy of interest under Section 234B. The expression “assessed tax” is defined to mean the tax assessed on regular assessment which means the tax determined on the application of Section 115J/115JA in the regular assessment. “

3. Tax Appeal since raises no other question of law, same requires no further consideration. Tax Appeal is dismissed. ‘

9. The said issue is also decided by the decision of Honorable Punjab and Haryana High Court in the case of Swaraj Mazda Ltd. v. CIT[2014] 223 Taxman 11/42 taxmann.com 363 where the issue was whether the assessee was liable to pay interest under sections 234B and 234C in respect of tax determined on basis of Section 115JA was answered in favour of the revenue as under:

2. ITA No. 406 of 2005 has been preferred by the assessee under Section 260A of the Income-tax Appellate Tribunal, Chandigarh Bench (for brevity,: the Tribunal”) in ITA No. 805/CHD/2000, for the Assessment Year 1998-99, claiming following substantial questions of law:-

“(i) Whether under the facts and circumstances of the case on the true and correct interpretation of the provisions of Section 115JA the interest under Sections 234B and 234C is to be charged under Section 143(1) (a) as a prima facie adjustment whereby no such charge made under Section 143(3)?

(ii) Whether on the true and correct interpretation of the provisions o f Sections 115JA, 234B, 234C debatable issues can be covered under Section 143(1)(a)?

3. Briefly, the facts as narrated in ITA No. 406 of 2005 may be noticed. The assessee filed its return of income for Assessment Year 1998-99 on 27-11-1998 at Rs. 7,45,871/-after excluding brought forward losses of Rs. 10,23,33,050/-. Since after claiming brought forward losses of Rs. 10,23,33,050/-, the taxable income worked out to be less than 30% of the book profit, the assessee filed its return of income at Rs. 2,23,69,890/- by applying the provisions of Section 115JA of the Act. The return was processed under Section 143(1)(a) of the Act on 31.05.1999. While processing the return, the Assessing Officer vide order dated 14-11-2000, Annexure A.3, made an adjustment to the returned income for an amount o f Rs. 5,80,579/- being the capital expenditure debited to profit and loss account and additional tax of Rs. 40,640/- was levied on the same and also interest under Sections 234B and 234C of the Act amounting to Rs. 12,50,250/- and Rs. 5,91,911/-respectively was charged. Feeling aggrieved, the assessee filed an appeal before the Commissioner of Income Tax (Appeals) [CIT(A)]. Vide order dated 5-7-2000, Annexure A.2, the appeal was allowed. Aggrieved by the order, the revenue filed an appeal before the Tribunal. Vide order dated 17-12-2004, Annexure A.1, the Tribunal allowed the appeal, set aside the order of the CIT(A) and restored that of the Assessing Officer. Hence, he present appeal by the assessee.

4. Learned counsel for the parties are ad-idem that the solitary issue involved in all the three appeals is whether interest under Sections 234B and 234C of the Act can be charged in respect o f income which has been determined on the basis of book profit under section 115JA of the Act.

5. The matter is no longer res integra. This Court in CIT v. Nahar Spg. Mills Ltd. [2011] 339 ITR 557/[2012] 209 Taxman 143/20 taxmann.com 792, following the judgment of the Honorable Supreme Court in Jt. CIT v. Rolta India Ltd. [2011] 330 ITR 470/196 Taxman 594/9 taxmann.com 36  came to the conclusion that interest under Sections 234B and 234C of the Act would be payable on failure to pay advance tax in respect of tax payable under Section 115JA/115JB of the Act.

6. In view of the above, it is held that the appellant was liable to pay interest under Sections 234B and 234C of the Act in respect o f tax determined on the basis of Section 115JA of the Act. The substantial questions of law are answered against the assessee and in favor of the revenue. Consequently, all the three appeals are dismissed. ‘

10. Since the question of law is already concluded vide the judgments rendered in the above decisions, we are not assigning elaborate reasons for disposing of these appeals. Accordingly, the questions of law are answered in favor of the Revenue and against the assessee. The appeals stand allowed accordingly. ”

Thus, it is clear that the Honorable Supreme Court has considered this issue in case of JCIT vs. Rolta India Ltd. 330 ITR 470 and by following the said decision of the Hon’ble High Court has held that the provisions of section 234B are applicable in case of failure to pay advance tax in respect of tax payable u/s 115JA/115JB of the Act. A similar view has been taken by the Honorable Punjab and Haryana High Court in case of CIT vs. Rana Sugars Ltd. (supra) and held in paras 6 and 7 as under:-

6. The Apex Court in Rolta India Ltd.’s case (supra) had recorded as under:-

“7. In our view, 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.

8. Section 115J was inserted by Finance Act, 1987 w.e.f. 1.4.1988. This section was in force from 1.4.1988 to 31.3.1991. After 1.4.1991, Section 115JA was inserted by Finance Act o f 1996 w.e.f. 1.4.1997. After insertion of Section 115JA, Section 115JB was inserted by Finance Act, 2000 w.e.f. 1.4.2001. It is clear from reading Sections 115JA and 115JB that the question whether a company which is liable to pay tax under either provision does not assume importance because specific provision(s) is made in the section saying that all other provisions of the Act shall apply to the MAT Company (Section 115JA(4) and Section 115JB(5)). Similarly, amendments have been made in the relevant Finance Acts providing for payment of advance tax under Sections 115JA and 115JB. So far as interest leviable under Section 234B is concerned, the section is clear that it applies to all companies. The pre -requisite condition for applicability of  Section 234B is that assessee is liable to pay tax under Section 208 and the expression “assessed tax” is defined to mean the tax on the total income determined under Section 143(1) or under Section 143(3) as reduced by the amount of tax deducted or collected at source. Thus, there is no exclusion of Section 115J/115JA in the levy of interest under Section 234B. The expression “assessed tax” is defined to mean the tax assessed on regular assessment which means the tax determined on the application of Section 115J/115JA in the regular assessment.

9. The question which remains to be considered is whether the assessee, which is a MAT Company, was not in a position to estimate its profits of the current year prior to the end of the financial year on 31st March. In this connection the assessee placed reliance on the judgment of the Karnataka High Court in the case of Kwality Biscuits Ltd. v. CIT reported in [2000] 243 ITR 519 and, according to the Karnataka High Court, the profit as computed under the Income Tax Act, 1961 had to be prepared and thereafter the book profit as contemplated under Section 115J of the Act had to be determined and then, the liability of the assessee to pay tax under Section 115J of the Act arose, only if the total income as computed under the provisions of the Act was less than 30% of the book profit. According to the Karnataka High Court, this entire exercise of computing income or the book profits of the company could be done only at the end of the financial year and hence the provisions of Sections 207, 208, 209 and 210 (predecessors of Sections 234B and 234C) were not applicable until and unless the accounts stood audited and the balance sheet stood prepared, because till then even the assessee may not know whether the provisions of Section 115J would be applied or not. The Court, therefore, held that the liability would arise only after the profit is determined in accordance with the provisions of the Companies Act, 1956 and, therefore, interest under Sections 234B and 234C is not leviable in cases where Section 115J applied. This view of the Karnataka High Court in Kwality Biscuits Ltd. case was not shared by the Gauhati High Court in Assam Bengal Carriers Ltd. v. CIT reported in [1999] 239 ITR 862 and Madhya Pradesh High Court in Itars i Oil and Flours (P.) Ltd. v. CIT reported in (2001) 250 ITR 686 as also by the Bombay High Court in the case of CIT v. Kotak Mahindra Finance Ltd.reported in [2003]  130 Taxman 730 which decided the issue in favour of the Department and against the assessee. It appears that none of the assesses challenged the decisions of the Gauhati High Court, Madhya Pradesh High Court as well as Bombay High Court in the Supreme Court. However, it may be noted that the judgment of the Karnataka High Court in Kwality Biscuits Ltd. was confined to Section 115J of the Act. The Order of the Supreme Court dismissing the Special Leave Petition in limine filed by the Department against Kwality Biscuits Ltd. is reported in [2006] 284 ITR 434. Thus, the judgment of Karnataka High Court in Kwality Biscuits stood affirmed. However, the Karnataka High Court has thereafter in the case of Jindal Therma l Power Company Ltd. v. Dy. CIT [2006]  154 Taxman 547 distinguished its own decision in case of Kwality Biscuits Ltd. (supra) and held that 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. “

7. In view of the above, the order of the Tribunal cannot be sustained. Accordingly, the substantial question of law is answered in favour of the revenue and against the assessee. ”

Hence, it is clear that the 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).

In the result, the appeals of the assessee are dismissed.

Order pronounced in the open court on 08/12/2017

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