Income Tax Appellate Tribunal - Mumbai
Charbhuja Industrioes P.Ltd, Mumbai vs Assessee
आयकर अपील य अ धकरण,
धकरण मंुबई यायपीठ 'lh'
lh मंुबई ।
IN THE INCOME TAX APPELLATE TRIBUNAL
"C" BENCH, MUMBAI
सव ी वजयपाल राव,
राव या.
या स एवं, डी.
डी क णाकर राव,
राव लेखा सद य ।
BEFORE SHRI VIJAY PAL RAO, JM & SHRI D. KARUNAKARA RAO,RAO, AM
आयकर अपील सं./I.T.A.
I.T.A. No.6
No. 6 9 01/Mum/2012
( नधारण वष / Assessment Year :2008-09)
M/s Charbhuja Industreis बनाम Addl. CIT-2(1)
बनाम/
Pvt. Ltd., 502, Abhaya Mumbai
Vs.
Steel House, Baroda Street
Mumbai-9
(अपीलाथ /Appellant
Appellant)
Appellant .. ( यथ / Respondent)
Respondent
आयकर अपील सं./I.T.A.
I.T.A. No.6902/Mum/2012
No. 6902/Mum/2012
( नधारण वष / Assessment Year :2009-10)
M/s Charbhuja Industreis बनाम Addl. CIT-2(1)
बनाम/
Pvt. Ltd., 502, Abhaya
Vs. Mumbai
Steel House, Baroda Street
Mumbai-9
थायी ले खा सं . /जीआइआर सं . /PAN/GIR No. :AABCC7512P
(अपीलाथ /A Appellant)
ppellant .. ( यथ / Respondent)
Respondent
नधा
नधा रती क ओर से/Assessee by : Shri Vimal Punmiya
राज ब क ओर से/ Revenue by : Shri Ravi Prakash
सनवाई
ु क तार ख / D at e o f H e a ri n g : 16th January 2014
घोषणा क तार ख/D
ख a te O f P ro n o u n c e m e n t: 24th January 2014
आदे श / O R D E R
PER : वजयपाल राव, या.स. / VIJAY PAL RAO, JM
These appeals by the assessee are directed against the two separate orders of Commissioner of Income Tax(Appeals) both dated 14.9.2012 for the assessment year 2008-09 and 2009-10 respectively.
2. The assessee has raised the solitary common ground in these appeals. The ground raised for the assessment year 2008-09 is as under: 2
ITA No.6901 & 6902/M/2012 Charbhuja Industries Pvt. Ltd.
"The Ld. Commissioner of Income Tax (A) erred in confirming charging interest u/s 234B of ` 18,79,294/- and u/s 234C of ` 3,70,502/- in view of the provisions of u/s 115JB of the Income Tax Act, 1961."
3. The assessee is engaged in the business of processing of mineral oil seeds. It filed return of income declaring income of ` 82,96,100/- under the normal provisions of the Act and ` 93,76,366/- as per Section 115JB. The A.O while completing the assessment u/s 143(3) computed book profit for the purpose of MAT u/s 115JB and accordingly levied the interest u/s 234B and 234C. The assessee paid the tax on the income assessed by the A.O however challenged the levy of interest u/s 234B and 234C before the CIT(A). The assessee contended before the CIT(A) that at the relevant point of time there are various decisions including the decision of Hon'ble Supreme Court in case of CIT Vs Kwality Biscuits Ltd. 284 ITR 434 wherein it has been held that no interest u/s 234B and 234C is leviable once the Income Tax is determined u/s 115JB. The assessee has also relied upon the various decisions of Hon'ble High Courts including a decision of Hon'ble Jurisdictional High Court in case of Snowcem India Ltd. Vs DCIT 178 Taxman 478 as well as decision of Hon'ble Gujarat High Court in case of DCIT Vs Associated Crown Closures (P.) Ltd. 315 ITR 291. Placing the reliance on the various decisions the assessee contended before the CIT(A) that the non-payment of advance tax on the book profit was under
bonafide belief of the assessee and therefore, the interest u/s 234B and 234C cannot be charged. The CIT(A) did not accept the contention of the assessee and held that in view of the decision of Hon'ble Supreme Court in case of JCIT Vs Rolta India Ltd. 196 Taxman 594 levy of interest u/s 3 ITA No.6901 & 6902/M/2012 Charbhuja Industries Pvt. Ltd.
234B and 234C is mandatory and consequential and hence confirmed the same.
4. Before us the Ld. A.R of the assessee has submitted that the CIT(A) has totally ignored the fact that during the assessment years under consideration the judgement of Hon'ble Supreme Court in case of CIT Vs Kwality Biscuits Ltd. (supra) was the law of the land on this point and therefore the assessee could not be expected to pay advance tax in respect of book profit for the purpose of MAT u/s 115JB. The Ld. A.R has further submitted that since the entire exercise of computing the income or book profit could be only at the end of financial year and in view of the decision of Hon'ble Supreme Court as well as Hon'ble High Court the assessee was not required to pay the advance tax in respect of MAT.
Thus, the non-payment of advance tax of MAT u/s 207 to 210 of the Income Tax Act would not attract the levy of interest u/s 234B and 234C of the Income Tax Act. The Ld. A.R has also relied upon the decision of Hon'ble Calcutta High Court in case of Binani Industries Ltd. Vs CIT 329 ITR 323 as well as decision of this Tribunal in case of Deepak Fertilizers and Petrochemicals Corporation Ltd. Vs DCIT 304 ITR (AT) 167 (Mum) and submitted that it has been held that the provisions of Section 207 and onwards cannot be invoked for the purpose of computation of income u/s 115J for the reason that the income would be computed only after finalization of books of account after the end of the financial year. Consequently, no interest can be charged for non-payment of advance tax of MAT. The decision of Hon'ble Supreme Court in case of JCIT Vs Rolta 4 ITA No.6901 & 6902/M/2012 Charbhuja Industries Pvt. Ltd.
India Ltd. (supra) has been delivered subsequent and much after the end of the financial year and therefore, the assessee cannot foresee the non- existing law. He has further submitted that in the peculiar facts and circumstances of the case the interest u/s 234B and 234C cannot be levied when the assessee was under bonafide belief that advance tax was not payable in respect of MAT. On the other hand, the Ld. D.R has relied upon the orders of the authorities below as well as decision of Hon'ble Supreme Court in case of JCIT Vs Rolta India Ltd. (supra).
5. We have considered the rival submissions as well as relevant material on record. There is no dispute regarding the fact that during the assessment years under consideration the settled law on the point was the decision of the Hon'ble Supreme Court in case of CIT Vs Kwality Biscuits Ltd. 284 ITR 434 as well as a number of other decisions including decisions of Hon'ble Jurisdictional High Court in case of Snowcem India Ltd. Vs DCIT 313 ITR 170 and in case of CIT Vs Natural Gems Ltd. 327 ITR 269 wherein it has been held that no advance MAT was payable by the company. Therefore, the assessee had no reason to belief or foresee a subsequent decision fastening the liability of payment of advance tax. Even otherwise the decision in case of JCIT Vs Rolta India Ltd. (supra) is a subsequent decision and therefore, the impossibilities at the relevant point of time cannot be thrashed upon the assessee. In the facts and circumstances as discussed above no fault can be found with the assessee in not depositing the advance tax of MAT in view of the decision of the Hon'ble Supreme Court as well as various decisions of the Hon'ble High 5 ITA No.6901 & 6902/M/2012 Charbhuja Industries Pvt. Ltd.
Court. The assessee had the bonafide reason to believe that advance tax was not payable in respect of MAT u/s 115JB as it was settled law laid down by the Hon'ble Supreme Court and Hon'ble High Court which hold good till the subsequent decision of Hon'ble Supreme Court in case of JCIT Vs Rolta India Ltd. (supra). Therefore, prior to the decision of Hon'ble Supreme Court in case of JCIT Vs Rolta India Ltd. (supra) settled proposition of the law on the point was that no advance tax was payable on MAT computed u/s 115JB and accordingly, the interest u/s 234B and 234C cannot be levied for non-deposit of advance tax on MAT for the year under consideration. Hence, we delete the levy of interest u/s 234B and 234C in this case.
6. In the result, the appeals of the assessee are allowed. Order pronounced in the open Court on this 24th day of January 2014 Sd/- Sd/-
(डी. क णाकर राव) ( वजयपाल राव)
लेखा सद य या यक सद य
(D. KARUNAKARA RAO) (VIJAY PAL RAO)
Accountant Member Judicial Member
Place: Mumbai : Dated: 24th January 2014
Subodh
Copy forwarded to:
1 Appellant
2 Respondent
3 CIT
4 CIT(A)
5 DR
/TRUE COPY/
BY ORDER
Dy /AR, ITAT, Mumbai