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Where a return of income could not be filed by the assessee due to unavoidable circumstances, and assessee proved to have a bona fide belief , coupled with the voluntary payment of tax liability, the Chief Commissioner was not justified in declining the benefit of a waiver of interest to assessee under section 234B.
Parliament amended Explanation 1 to section 234B by the Finance Act, 2006 with effect from April 1, 2007 to provide along with tax deducted or collected at source, the MAT credit under section 115JAA also to be excluded while calculating assessed tax.
In the present case, the assessee deposited a sum of Rs.10 lacs under section 140A of the Act. In addition thereto, the assessee had also suffered tax deduction at source to the tune of Rs. 25,533/-. Eventually, the Assessing Officer, assessed the tax liability of the assessee at total of Rs. 15,08,474/-. Thus the assessee had short-paid tax to the tune of Rs. 4,82,941/-. To our mind, however, when we look at the ratio of the decision of the Delhi High Court in the case of Dr. Prannoy Roy (supra), such distinction would not be material. What was held by the Delhi High Court was that charging of interest from an assessee for late filing of return though the tax was already paid, would render the provision penal in nature, which the statute did not provide. If we apply the same ratio in the present case, the only modification we need to adopt is that the assessee must be held to be liable to pay interest under section 234A of the Act on the difference of amount between the tax assessed and the amount which he had paid before the due date to which even the assessee has not raised any serious objection.
Whether on the facts and in the circumstances of the case, the ITAT is correct in law in deleting the interest charged u/s 234B and 234C while computing income u/s115JB without appreciating the facts that the said section specifically state that all provision of the Act shall apply to the assessee being company mentioned in the said section and therefore section 115J of the Act is no more available for the assessee for delaying the payment of advance tax in view of the insertion of section 115JA 115JB in the Act.
It is a fact that the documents were given to the petitioner only after more than two years. But the reasons stated by the Chief Commissioner would unequivocally indicate that initially the request was made to release the books of account and documents; then the returns were prepared even without the originals.
It is the contention of the assessee that since the income earned by him from M/s Vijaya Diagnostic Centre Pvt. Limited has been treated as salary, the assessee is not obliged under the Act to pay advance-tax as provided u/s 208 of the Act. The assessee has also contended that as per the provisions of section 192 of the Act in case of payment of salary the entire tax payable has to be deducted by the employer at the time of payment of salary.
The proviso to sub-section (1) to section 209, inserted by the Finance Act, 2012 is prospective in nature and not with retrospective effect. The proviso was brought into operation with effect from 1-4-2012, therefore, the assertion of revenue is disagreed with. 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.
The undisputed fact in the present case remained that the tax on the entire income received by the assessee was required to be deducted at appropriate rates by the respective payers u/s 195(2) of the Act. Had the payer made the deduction of tax at the appropriate rate, the net tax payable by the assessee would have been Nil. Thus there was no liability to pay advance tax by the assessee.
No doubt, payment of interest under Sections 234A, 234B and 234C is mandatory but it is for the Assessing Authority while passing the original assessment order or while passing the reassessment or rectification order to direct payment of interest.
The case of the revenue is that section 234D as introduced on 1st June, 2003 was retrospective in operation by necessary implication. However, as doubts were raised about its retrospectivity, the same was clarified by adding an explanation to section 234D by Finance Act, 2012.
