Income Tax Appellate Tribunal - Ahmedabad
Assistant Commissioner Of Income-Tax vs Smt. Nina Arora on 9 July, 2001
Equivalent citations: [2002]80ITD348(AHD)
ORDER
T.N. Chopra, Accountant Member
1. This appeal filed by the revenue is directed against the order of the CIT(Appeals), Baroda dated 10-3-1995 for assessment year 1992-93. The following ground has been raised by the Revenue :
On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in directing the Assessing Officer to give credit of tax paid under Section 140A of the Income-tax Act while calculating interest charged under Section 234A of the IT Act.
2. The relevant fact may be briefly indicated. The assessee filed return of income for assessment year 1991-92 on 27-10-1993 declaring total income of Rs. 18,14,720. The assessee had paid following amounts by way of taxes for assessment year 1992-93 after the end of the accounting year i.e. after 31st March, 1992.
Amount (in Rs.) Date
1,00,000 24-4-1992
2,00,000 30-10-1992
3,00,000 16-01-1993
3,50,000 31-03-1993
________
9,50,000
________
The assessee had also paid advance-tax amounting to Rs. 1,03,520 before the end of the accounting year i.e., before 31st March, 1992. The Assessing Officer made the assessment vide order dated 7-3-1994 on a total income of Rs. 18,47,720 and levied interest under Section 234A amounting to Rs. 2,14,776. While calculating interest under Section 234A, the Assessing Officer did not take into consideration the payment of Rs. 9,50,000 made by the assessee after the end of the accounting year i.e. after 31st March, 1992. The assessee moved an application under Section 154 dated 20th June, 1994 requesting for rectification under Section 154 and reducing the interest to Rs. 47,492. In this application, the assessee claimed that the payment of Rs. 9,50,000 paid before filing the return of income should be considered while computing the interest under Section 234A. The Assessing Officer however rejected the application. Aggrieved, the assessee carried the matter in appeal before the learned CIT(A) who held that while calculating interest under Section 234A, payment made under Section 234A has got to be given credit. The CIT(A) accordingly directed the Assessing Officer to recompute the interest under Section 234A by giving credit for the amount of Rs. 9,50,000 paid before filing of the return. The CIT(A) accordingly allowed the appeal of the assessec. The revenue is aggrieved and hence the appeal.
3. The learned DR, assailing the impugned order of the learned CIT(A) argued that the Assessing Officer had correctly computed the interest under Section 234A for late furnishing of return by the assessee and payment of Rs. 9,50,000 made by the assessee after the end of the accounting year i.e. 31st March, 1992 cannot be treated as advance-tax and has therefore been ignored by the Assessing Officer while calculating the interest under Section 234A. The learned DR submitted that the provisions of Section 234A are unambiguous and provide that interest would be charged on the amount of tax on total income as determined on regular assessment "as reduced by the advance-tax if any, paid and any tax deducted or collected at source".
4. The learned counsel for the assessee, on the other hand, strongly relied upon the decision of Nagpur Bench of ITAT in the case of Murtuzabhai Mohammedbhaiv. ITO [1997] 58 TTJ (Nag.) 601 and argued that while computing under Section 234A self-assessment tax paid under Section 140A cannot be excluded.
5. We have considered the rival submissions. In the first instance, it is to be pointed out that the issue under consideration does not fall within the limited scope and ambit of Section 154. Section 154 confers jurisdiction on the Assessing Officer to carry out rectification in respect of apparent mistakes which are self-evident and stares one from the record. Issues which are debatable or controversial in nature and about which there can conceivably be two opinions would clearly be outside the limited purview of Section 154. In the instant case, as discussed hereinafter the language of Section 234A is explicit and clear words providing that interest for the late furnishing of return would be levied on the amount of tax on total income as determined under Section 143(1) or 143(3) as reduced by the advance-tax paid and any tax deducted at source. The said section does not provide for deduction of any self-assessment tax or any tax which does not have the characteristic of advance-tax or tax deducted at source. Be that it may, the issue raised by the assessee by way of rectification of application before the Assessing Officer was well outside the pale of the restricted purview of Section 154. The order of the Assessing Officer rejecting the rectification application is therefore liable to be sustained. On this ground itself, we are inclined to accept the appeal of the assessee and reverse the order of the CIT(A).
6. Even on merits, as we have briefly referred above, there is absolutely no doubt in our mind regarding the interpretation of the provisions of Section 234A for computation of interest for late filing of the return. The section speaks of two factors which are to be determined namely quantum of delay in furnishing the return and the amount on which interest is to be calculated. The section is quite explicit and unequivocal in providing that interest is to be calculated on the total income as determined under Section 143(1) or 143(3) as reduced by the following two payments :-
(i) advance-tax paid,
(ii) tax deducted at source.
Any payment which is not covered as advance-tax or tax deducted at source would not be liable to be reduced while computing the interest under Section 234A. Now coming to the provisions of Section 140A, it provides for payment of self-assessment tax as well as interest for the late furnishing of return. Self-assessment tax along with interest would obviously be calculated on the basis of the return furnished by the asscssee. However, the payments made by the assessee after the end of the accounting year cannot be characterised as self-assessment tax under Section 140A even when the said tax has not been calculated on the basis of the return being furnished by the assessee. In the instant case, amounts paid by the asscssee well before filing of the returns on 27-10-1993 cannot be treated as 'self-assessment tax'. Be that it may, there is no occasion for reducing these amounts while computing interest under Section 234A on the completion of assessment in the case of the assessee.
7. Regarding the reliance placed by the learned counsel on the decision of ITAT in the case of Murtiizcibhai Mohammedbhai(supra) rendered by Nagpur Bench of ITAT(supra), it may be pointed out that the said decision has been rendered in the context of processing under Section 143(1)(a) when the Assessing Officer is not entitled to deal with the controversial issues. The Tribunal has taken note of this important aspect while deciding the issue in favour of the assessee. Another important distinguishing feature which has to be taken note of is the retrospective amendments introduced by the Finance Act, 2001 in the provisions relating to levy of interest under Sections 234A, 2.34B as well as Section 140A. Explanation 4 below Sub-section (1) of Section 234A(1) has been omitted by the Finance Act, 2001 w.e.f. 1-4-1989. Similarly, in Section 140A, the Legislature has inserted Explanation (1A) w.e.f. 1-4-1989 which provides that interest payable under Section 234(A) shall be computed on the amount of tax on the total income as declared in the return as reduced by the advance-tax and tax deducted at source. In this new Explanation introduced w.e.f. 1-4-1989, there is no indication regarding tax payment made other than advance-tax and tax deducted at source. The aforesaid amendments have been made by the Legislature for clarifying the statutory provisions regarding levy and computation of interest under the various sections of Income-tax Act.
8. Having regard to the aforesaid legislative provisions, we see no ambiguity in the statutory position in so far as computation of interest under Section 234A is to be made after reducing the advance-tax and TDS only. The decision of Nagpur Bench of the Tribunal cited by the learned counsel is therefore not applicable.
9. At this stage, we may refer to the decision of Gujarat High Court which is the jurisdictional court for us, rendered in the case of Life Bond Fabric (P.) Ltd. v. CIT[1995] 216 ITR 529 : 82 Taxman 447 wherein their Lordships have held that while computing the interest under Section 139(8), credit cannot be allowed for taxes paid after the end of the accounting year and any such credit erroneously given by the Assessing Officer treating the payment as advance-tax would be liable to be rectified by taking recourse to the provisions of Section 154. Thus, the statutory provision is unambiguous that while computing the interest for late filing of the return, credit is to be given only to advance-tax and tax deducted at source and any tax payment made after the end of the accounting year would be liable to be ignored while computing the interest.
Another argument vehemently put across by the learned counsel for the assessee was that ignoring the payments of taxes made by the assessee after the end of the accounting year would lead to injustice inasmuch as interest under Section 234A would be levied even on the tax amounts already paid by the assessee. The learned counsel strongly urged that this approach would be contrary to the compensatory nature of the provisions contained under Section 234A. We are not impressed by the contention of the learned counsel. When the words of statute are clear, plain or unambiguous i.e. they are reasonably susceptible to only one meaning, the Courts are bound to give effect to that meaning irrespective of its consequence. It has been observed in "Maxwell on the interpretation of Statutes" (12th Edition) at page 205 as under :-
But convenience is not always a safe guide to construction. However difficult it may be to believe that Parliament ever intended the consequences of a literal interpretation, we can only take the intention of Parliament from the words which they have used in the Act and therefore the question is whether these words are capable of a more limited construction. If not, then we must apply them as they stand, however unreasonable or unjust the consequences and however strongly we may suspect that this was not the real intention of Parliament.
As we have already pointed out Section 234A provides in clear terms that advance-tax and tax deducted at source are to be excluded while computing interest for the late furnishing of the return. There is absolutely no question of departing from the express language of the statute on the supposed grounds of equity and justice. It has been held by the Hon'ble Supreme Court in the case of CIT v. TV Sundaram lyengar & Sons (P.) Ltd. [1975] 101 ITR 764 that if the language of the statute is clear and unambiguous, it would be wrong to discard the plain meaning of the words used in the section in order to meet a potential injustice.
10. The Karnataka High Court in the case of Union Home Products Ltd. v. Union of India [1995] 215 ITR 758 [1996] : 84 Taxman 303 has observed, repelling a similar contention based on hardship involved in Section 234A, that in actual application of these provisions of Sections 234A, 234B and 234C, there may be situations where an assessee may render itself liable to payment of interest under each of these provisions simultaneously for the time period but this would not alter the basic character of the levy being compensatory. Thus, the supposed hardships or inequitable consequences claimed by the learned counsel would not empower an appellate authority to modify or rewrite the statutory provision. The contentions of the learned counsel on this ground are, therefore, without merit and are rejected.
11. For the aforesaid reasons, we hereby reverse the findings of the CIT(A) and allow the appeal of the Revenue.