Case Law Details
DCIT Vs Reliance Industries Ltd. (ITAT Mumbai)
The issue under consideration is whether the interest u/s 234B for less payment of advance tax will be levied on account of additions made to total income, consequent to retrospective amendment?
In the present case, additions was made to book profits computed u/s 115JB, towards deduction claimed on eligible profit u/s 80HHC of the Act, on the basis of retrospective amendment to Section 115JB of the Act, by omitting clause (iv) to (vii) to explanation 1 by the Finance Act, 2011 with effect from 01/04/2005. Further, at the time of payment of advance tax, said provisions were very much was on statute, and assessee was entitled to deduct amount claimed as deduction u/s 80HHC from book profit u/s 115JB of the Act. Therefore, the assessee has taken the advantage of provisions as was there in statue at the time of payment of advance tax.
ITAT states that the assessee should not be fastened with interest liability on additions made on the basis of subsequent amendment, since, the assessee could not have foreseen the liability, at the time of estimating his income for the purpose of payment of advance tax. a party cannot be called upon to perform an impossible Act, i.e to comply with the provision, which was not in force at the relevant time. The sum and substance of the ratios laid down by the Hon’ble High court of Bombay is that liability arising on account of retrospective amendment could not be fastened on the assessee, where the assessee could not have foreseen the liability, at the time of estimating his income for the purpose of payment of advance tax and hence, the assesee cannot be expected to pay advance tax on the part of disputed amount. Therefore, ITAT are of the considered view that no interest can be levied u/s 234B of the Act, for shortfall in payment of advance tax on the basis of retrospective amendment to law.
Hence, the appeal filed by the revenue is dismissed.
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