Gujarat High Court
Principal Commissioner Of Income Tax - 4 vs M/S Torrent Private Limited on 9 October, 2018
Author: Akil Kureshi
Bench: Akil Kureshi, B.N. Karia
C/TAXAP/1224/2018 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/TAX APPEAL NO. 1224 of 2018
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PRINCIPAL COMMISSIONER OF INCOME TAX - 4
Versus
M/S TORRENT PRIVATE LIMITED
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Appearance:
MRS MAUNA M BHATT(174) for the PETITIONER(s) No. 1
for the RESPONDENT(s) No. 1
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CORAM: HONOURABLE MR.JUSTICE AKIL KURESHI
and
HONOURABLE MR.JUSTICE B.N. KARIA
Date : 09/10/2018
ORAL ORDER
(PER : HONOURABLE MR.JUSTICE AKIL KURESHI)
1. Revenue is in appeal against the judgment of the Income Tax Appellate Tribunal dated 13.04.2018 raising following question for our consideration:
"Whether the Appellate Tribunal has erred in law and on facts in granting relief to the assessee on levy of interest u/s.234B of the Act?"
2. For the assessment year 200304, the assessee had filed the return of income. The assessee was liable to pay tax on the book profit in terms of section 115JB of the Income Tax Act, 1961 ('the Act' for short). The Assessing Officer added the provision created by the assessee in respect of deminision in the value of investment relied on the amendment in Page 1 of 4 C/TAXAP/1224/2018 ORDER section 115JB by Finance Act, 2 of 2009 but which was brought with retrospective effect from 01.04.2001. In the present case, we are not concerned with such addition but however, what we are concerned is with the resultant interest charged by the Assessing Officer under section 234B of the Act for short payment of advance tax.
3. Commissioner of Income Tax (Appeals) deleted such interest on the ground that the liability of additional tax has arisen on account of retrospective amendment and the assessee therefore cannot be expected to have paid advance tax on such income. The Revenue carried the matter in appeal before the Tribunal and placed heavy reliance on the decision of Supreme Court in case of Joint Commissioner of IncomeTax v. Rolta India Ltd. reported in [2011] 330 ITR 470 (SC). The Tribunal confirmed the view of Commissioner of Income Tax (Appeals) relying upon the judgment of this Court in case of Commissioner of IncomeTax v. Vodafone Essar Gujarat Ltd. reported in [2017] 397 ITR 55 (Guj) [FB]. Hence, this appeal by the Revenue.
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C/TAXAP/1224/2018 ORDER
4. We do not find any error in the view of the Tribunal as facts would stand. Liability of the assessee for additional tax arose on account of retrospective amendment in section 115JB of the Act. It is undoubtedly true that Supreme Court in case of Rolta India Ltd. (supra) had held that interest under section 234B would be payable on failure to pay income tax in respect of the tax payable under section 115JA of the Act (which was a predecessor provision to section 115JB).
5. In this judgment, the question of such liability having arisen on account of retrospective amendment in the statute did not arise. This Court in case of CIT v. National Dairy Development Board reported in (2017) 397 ITR 543 (Guj) considered a situation where the assessee had paid the advance tax which was later on found insufficient on account of insertion of explanation6(6) of the Act by Finance Act, 2008, with retrospective effect from 01.04.2003. It was held that the assessee's computation on payment of advance tax was according to the provisions contained in chapterXVII of the Act in absence of retrospective amendment in section 43(6) of the Act, Page 3 of 4 C/TAXAP/1224/2018 ORDER no liability to pay additional tax of the assessee existed. Such liability arose on account of subsequent amendment brought into statute with retrospective effect. It was further held that interest on short payment of advance tax cannot be levied. Reliance was placed on the decision of Division Bench of Calcutta High Court in case of Emami Ltd. vs. CIT, reported in 337 ITR 470.
6. In the result, Tax Appeal is dismissed.
(AKIL KURESHI, J) (B.N. KARIA, J) ANKIT SHAH Page 4 of 4