Income Tax Appellate Tribunal - Delhi
Maharashtra Feeds P. Ltd., New Delhi vs Acit, Central Circle, Faridabad on 6 February, 2024
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH 'E', NEW DELHI
Before Dr. B. R. R. Kumar, Accountant Member
Sh. Yogesh Kumar US, Judicial Member
ITA No. 1253/Del/2021: Asstt. Year: 2014-15
ITA No. 1254/Del/2021 : Asstt. Year: 2015-16
Maharashtra Feeds P. Ltd., Vs ACIT,
46, Rajasthani Udyog Nagar, Central Circle -II,
G.T. Karnal Road, Faridabad
New Delhi-110033 Haryana-121001
(APPELLANT) (RESPONDENT)
PAN No. AAACM1220B
Assessee by : Sh. K. Sampath, Adv. &
Sh. Rajkumar, Adv.
Revenue by : Ms. Smita Singh, Sr. DR
Date of Hearing: 08.11.2023 Date of Pronouncement: 06.02.2024
ORDER
Per Dr. B. R. R. Kumar, Accountant Member:
The present appeals have been filed by assessee against the orders of ld. CIT(A)-3, Gurgaon dated 31.08.2021.
2. Since, the issue involved in both appeals are similar, they were heard together and being adjudicated by a common order. In IT A No. 1253/Del/2021, the assessee has ra ised following ground:
"That on the facts and in the circumstances of the c ase and in law, the ld. CIT (A) erred in confirming the ac tio n of the Assessing Officer in cha rging and sustaining interest u/s. 234A, 234B and 234C o f the Act at Rs. 6,73,470/-, Rs . 2,79,19,712/- and Rs . 17,63,823/- respectively."2
ITA Nos. 1253 & 1254/Del/2021 Maharashtra Feeds P Ltd.
3. The order passed u/s. 154 is as under:
" The abovementioned applicant is a company engaged in the business of manufacturing of poultry and cattle feeds. A search /survey action was carried out at the business premises of the applicant on 18.12.2014. The case was centralized with this office. Thereafter, notice u/s 153A for the A. Y.s 2009-10 to 2014-15 were issued by this office on 20/07/2016 and served on the applicant. In response to these notices, the applicant e-filed the returns of income for the said assessment years. Subsequently, the applicant filed application u/s 245D (1) of the Income Tax Act, 1961 on 13.12.2016 for the A.Y. 2009-10 to 2015-16.
The application was admitted vide order u/s 245D(1) of the Income Tax Act, 1961 dated 21.12.2016.
In pursuance of order u/s 245D(4) of the Income Tax Act, 1961 dated 27.06.2018, an order under section 245D (4) was passed on 03.08.2018. Now, the assessee has filed an application that while computing the interest u/s 234A/B/C is incorrect because interest under section 234A/B/C is applied on the returned income not on the assessed income.
On observation of the records, it is found that the only claim in respect ot interest u/s 234C of the Income tax act 1961 by the assessee company has been found to be correct. The claim of assessee company in respect of interest w/s 234A & 234B of the income Tax Act, 1961 is not acceptable on the following grounds:
234B(2A) of the Income Tax Act, says that:-
(a) where an application under sub-section (1) of section 243C. for any assessment year has been made, the assessee shall be liable to pay simple interest at the rate of one per cent for every month or part of a month comprised in the period commencing on the 1st day of April of such assessee year and ending on the date of making such application, on the additional amount of income-lat referred to in that sub-section:
(b) where as a result of an order of the Settlement Commission under sub-section (4) of section 245D for any assessment year, the amount of total income disclosed in the application under subsection (1) of section 24SC is increased, the assessee shall be liable to pay simple interest at the rate of one per cent for every month or part of a month comprised in the period commencing on the 1st day of April 3 ITA Nos. 1253 & 1254/Del/2021 Maharashtra Feeds P Ltd.
of such assessment year and ending on the date of such order, on the amount by which the tai on the total income determined on the basis of such order exceeds the tax on the total income disclosed in the application fled under sub-section (l) of section 245C;
(c) where as a result of an order under sub-section (6B) of section 245D, the amount on which interest was payable under clause (b) has been increased or reduced, as the case may he, the interest shall be increased or reduced accordingly;
234C of the Income Tax Act says that:-
234C. (1) Where in any financial year,-
(a) an assessee, other than the assessee referred to in clause (b), who is liable to pay advance tax under section 208 has failed to pay such tax or-
(i) the advance tax paid by such assessee on its current income on or before the 15th day of June is less than fifteen per cent of the tax due on the returned income or the amount of such advance tax paid on or before the 15th day of September is less than forty-five per cent of the tax due on the returned income or the amount of such advance tax paid on or before the 15th day of December is less than seventy-five per cent of the tar due on the returned income, then, the assessee shall be liable to pay simple interest at the rate of one per cent per month for a period of three months on the amount of the shortfall from fifteen per cent or forty-five per cent or seventy-five per cent. as the case may be of the tax due on the returned income;
(ii) the advance tux paid by the assessee on the current income on or before the 15th day of March is less than the tax due on the returned income, then, the assessee shall be liable to pay simple interest at the rate of one per cent on the amount of the shortfall from the tax due on the returned income:
In Brij Lal & Others vs. CIT (2010) 328 TTR 477 (SC) The following broad propositions were laid down regarding charging of interest:-4
ITA Nos. 1253 & 1254/Del/2021 Maharashtra Feeds P Ltd.
When the Parliament uses the words "as if such aggregate were the total income" in Section 24SC(1B), it presupposes aggregation of the returned income and additional income disclosed.
The provisions of Section 2344, 234B and 234C are applicable to the proceedings of the Settlement Commission under Chapter XIX-A. An application under s. 245C(1) is a return.
Application has to pay the additional amount of tax with interest without which the application for settlement would not be maintainable.
The order under s. 245D(4) is not an order of regular assessment.
Legislature has not contemplated levy of interest between the stage of order under S. 245D(1) and the order under S. 245D(4).
Thus, interest under s. 234B is chargeable till the date of order of the Settlement Commission under s. 245D(1) i.e., admission of the case on the returned income plus the additional income. This preposition was also laid down in CIT vs. Hindustan Bulk Carriers 259 ITR 449 (SC), wherein it was held that interest u/s 2344, 234B and 234C will be on the consolidated amount of income disclosed before the I.T. authorities and other undisclosed income, which is for the first time disclosed before the Commission.
It is to be noted that Sec. 234B(4) envisages increase or reduction of interest, if the amount on which the interest was chargeable undergoes a change due to any order passed w/s 245D(4). In view of this, the departmental view is that the Settlement Commission us 245D(4) and not only on the amount which was offered by the assessee in the application.
In view of the above the rectification application filed by the assessee u/s 154 of the Income Tax Act, 1961on the quantum of interest charged u/s 234A & 234B is hereby rejected.
The assessee application on the issue of quantum of interest under section 234C is acceptable as interest under section 234C is levied on return of income filed 5 ITA Nos. 1253 & 1254/Del/2021 Maharashtra Feeds P Ltd.
under section 245C (1) of the Income Tax Act, 1961. Therefore, the same is rectified."
4. Aggrieve d, the assesee filed appeal before the ld. CIT(A).
5. The ld. CIT(A) relying o n the explanator y note to the provisions of Finance Act 2015 and the Circular No. 19 of 2015 of CB DT affirm the action of the Assessing Officer. For the sake of ready reference, the order of the ld. CIT(A) is repro duced here under:
"6.3 The abo ve a mended provision has been e xplained by the Expla nato ry notes to the pro visions o f the Finance Act, 2015 in the Circular no . 19 of 2015 as under:
Interes t for defaults in payment of adva nce tax in case o f re- assessment and where additio nal income is disc losed be fore the Settlement Commission under sectio n 245C 48.1 The provisions contained in sub-section ( 3) o f section 234B of the Income-ta x Act, befo re its amendment by the Act, provided that whe re the total income is incr eased on re assessment unde r section 147 or section 153A the assessee s hall be liable fo r interest at the rate of 1 per cent. On the amount o f the increa se in total income for the perio d commencing from date o f determination of total income under sub-section ( 1) of section 143 or o n regula r assessment and e nding o n the date o f reassessment under sec tion 147 or section 153A o f the Income-tax A ct.
48.2 Inte rest is charged unde r section 234B o n the princ iple tha t the amount of ta x dete rmined o n the to tal income determined under section 143(1) or o n assessment or reassessment or total income declared in a se ttlement a pplication was the tax payer's true liability right from the beginning and it was with refere nce to that amount the advance tax should have been paid within the prescribed due date. Accordingly , clause (3) of section 234B o f the I ncome-ta x Act has been amended so as to provide that the period fo r which the interest is to be computed will begin from the 1st day o f April next fo llo wing the financial year and end on the 6 ITA Nos. 1253 & 1254/Del/2021 Maharashtra Feeds P Ltd.
date of determination of total incom e under sec tion 147 o r section 153A.
48.3 The prov ision contained in sub-section (4) ,prior to its amendment by the Act, pro vide d that whe re o n an order of the Settlement Commission under sub-section (4) of section 245D, the amount on which inte rest was payable under sub-se ction (1) or subsection ( 3) is increased o r re duced, the interest shall be incre ased or reduced accor dingly . However , in c ase an applic ation is filed befo re the Settlement Commission unde r s ection 245C declaring an a dditional amount of income-tax, there is no s pecific provisio n in section 234B fo r charging inte rest o n that additio nal amount.
48.4 Ac cordingly, a ne w sub-section (2A) has been inser ted in section 234B o f Income-tax Act so as to pro vi de that where an applic ation under sub-sectio n (1) of section 245C for any assessment year has been made , the assessee s hall be liable to pay simple interest at the rate of one per cent for every month or par t of a month comprised in the period commencing on the 1st day of A pril o f such assessment ye ar and ending on the date of making s uch applicatio n, on the additional amount o f income-tax referred to in that sub- section.
48.5 It has a lso been pro vided that where as a result of an o rde r of the Se ttlement Commission under sub-section (4) of se ctio n 245D for any assessment year, the amount o f to tal income disc losed in the a pplication unde r sub-section (1) o f section 245C is incre ased, the a ssessee shall be liable to pay simple interest at the rate o f o ne per cent for every month o r part of a month comprise d in the period commencing on the 1st day of April o f such assessment year and ending on the date of such o rder , on the amount by which the tax on the to ta l income de termine d o n the basis of such orde r e xceeds the tax on the total income disc losed in the a pplicatio n filed under sub- sect ion (1) of sec tion 245C.
48.6 Sub-section (6B) o f section 245D o f the Income-tax Ac t provides tha t the Settlement Com mission may, with a view to rectifying any m istake a ppa rent fro m the record, ame nd any or der passed by it under sub-section (4) o f sectio n 245D of the Income-
7ITA Nos. 1253 & 1254/Del/2021 Maharashtra Feeds P Ltd.
tax Act, as a result of which the to tal income dete rmined by the Commission may increase or decrease. Acco rdingly, section 234B of the Income-ta x Act has been a mended so as to provide that where as a result of re ctification order under s ub-sec tion (6B) of section 245D, the amount on which interest was payable unde r clause (b) of subsection (2A) of s ection 234B is increased o r reduce d, the interest sha ll also be increased or re duced accordingly.
48.7 Applic ability: These amendments have taken e ffe ct from 1s t day o f June , 2015. Heard the arguments o f bot h the parties and peruse d the mater ial available on record.
6.4 Furthe r, it has been clarified in the OM No. F . No. 370149/31/2016-T PL date d 28.3.2016 of the CBDT , that provisio ns o f section 234B (2A) shall be applicable to the c ases pending with the Hon'ble Settlement Commission as on 1.6.2015 as well. The rele va nt pa rt of the same is re produced as under:
F . N o . 3 70 1 49 / 31 / 2 01 6- TP L G ov e rn m en t of I n di a Min i st ry o f F in a n c e D ep a rt m en t o f R ev e n ue ( C en t ra l Bo a rd of D i r e c t T a x e s) N ew D elh i, 2 8t h M a r ch , 2 01 6 OF F IC E M EM OR AN D UM * ** * ** Su b j ec t: Bu dg et p r o po sa l s f o r t h e F .Y . 20 1 6- 1 7 , in t e r a lia i n r el a ti on t o th e p r ov i s io n s of s e ct i on 23 4 B o f th e I T A c t a s a p p li ca b l e to t h e IT S C - r eg .
K in dl y r ef e r to r ef e r en c e I D N O .F . N o . 2 9 9/ 5 6/ 20 1 5 - IT ( In v - II I) da t ed 2 0 . 0 1 .2 0 1 6 , a l on g wi t h a c op y o f D O l et t e r d a t ed 0 8 . 0 1 .2 0 1 6, r e c eiv e d f r om V i c e- ch a i r ma n o f t h e I n c om e t ax S e tt l em en t C o mm i s si on ( IT SC ) . K ol k a ta on t h e s u b j e c t m ent i on e d a bo v e .
2 . In t h i s c on t e xt , I ha v e b e en di r e ct ed t o c on v ey t h a t p r i o r t o th e a m en d m en t by F in a n c e A ct , 2 0 1 5 , in ca se a n a p pl i ca t i on w a s fil e d be f o r e t h e S et tl e m ent Co m mi s si on u n de r s ec t i on 24 5 C d e cl a r i ng an a m oun t o f in c om e- t a x , th e r e w a s no s pe ci fi c p r ov is i o n in s ect i on 2 3 4B f or ch a rg in g i nt e r es t on t h a t a d dit i on a l a m oun t .8
ITA Nos. 1253 & 1254/Del/2021 Maharashtra Feeds P Ltd.
3 . A cc o rd in gl y , a n a men dm en t w a s m a d e in th e s a i d s ec t i on by in s e rti ng a n ew su b -s e c ti on ( 2A ) i n s e c ti on 2 3 4 B s o a s t o pr o vi d e t hat w h er e a n appl ic a t i on u n d er s u b- s ect i on ( i) of s e ct i on 2 4 5C f o r a ny a s s e ss m en t y ea r h a s b ee n m a d e, th e a s s e s se e sh a l l b e l i a bl e t o pa y s im pl e in t e r est a t t h e r a t e o f on e p e rc ent f o r e v e ry m on th o r pa rt of a mon t h c o m p ri s ed in t h e p e ri od c om m e n ci ng on t h e i s d a y o f A p ri l o f s u c h a s s e ss m en t y ea r a nd en di ng on t h e d a t e of m a ki ng s u ch a pp li ca ti on, on th e a dd it i on a l a m ou nt o f i n co m e-t a x r e f e rr ed t o i n t h a t s ub - s e cti on . Fu rt h e r , wh e r e a s a r e su l t of a n o rd e r of th e S ett l e m ent C o mm is si on u n d e r su b- s e ct i on ( 4) o f se c ti on 2 45 D f o r a ny a s s e s sm ent y ea r, t h e a m ou nt of t ot a l in c om e di sc lo s ed in t h e a p pl i c a t i o n un d er s u b . s ect i on ( 1) o f s ec t i on 2 45 C is i n c r e a s e d, th e a s s e ss e e sh a l l b e lia bl e t o pa y si m p l e i nt e r e s t a t t h e r a t e of on e p e r c e n t f o r ev e r y m o nt h o r pa rt o f a m on th c o mp ri s ed i n t h e p e ri od c o mm en ci ng on t h e i s d a y of A pr i l o f s u c h a s s es s m en t y ea r a n d en d in g on th e d a t e o f su ch o rd e r , on th e a m oun t b y w hi c h t h e ta x on th e t ota l i n c om e d et e rm i n ed o n th e ba si s of s u c h or d e r ex c e ed s t h e t a x on th e t ot a l in c om e di sc l o s ed i n th e a pp li ca ti on f il ed u n de r su b -s e c ti on ( 1) of s e cti on 2 4 5 C. Th e s e a m en d m en t s h a v e c om e t o ef f e ct f r om 0 1 . 06 .2 0 15 .
4 . F urt h e r , t h e r e i s no a m bi gu it y i n s o fa r a s a p pl i ca bi li t y o f th e pr o v i si on s o f s e ct i on 2 3 4 B( A ) i s co n c e rn ed . Th e a m en d m en t t o th e pr o v i si on s o f s e ct i o n 2 3 4B w a s m a d e s ub s eq u ent t o j u dg em en t o f th e Ap e x C ou rt in t h e c a s e o f B rij l a l a nd C a lcu tt a Hi gh C ou rt i n t h e ca s e o f G M F oo d s. S i n c e t h e a p p li ca b il it y of t h e n ew pr o vi s i on c a me i nt o f o r c e f ro m 0 1 . 0 6 .2 0 15 , i t s ha ll b e a p pl i c a b l e to th e ca s e s p en d i n g w i th th e ITS C a s on 0 1 . 0 6 .2 0 1 5 a s on 0 1 .0 6 . 2 01 5 a s w el l.
5 . A s r eg ar ds th e i s s u e o f g ra n ti ng w a i v er of i nt e r es t t o th e p r e- 0 1. 0 6 .20 0 7 c as e s , i t ma y b e m en t i on ed th a t i t is a n a d mi ni st ra t iv e de ci si on an d d o e s n ot t a ll u n d e r th e do ma in a r ea o f TP L di vi s i o n o f C BD T. I t m ay h ow e v er , b e c l a r i f ie d t h a t n o o rd e r u n d e r s e ct i on 1 1 9 o f th e A ct can b e i s s u ed b y C BD T t o th e I TS C , a s I TSC i s n o t a n In c om e ta x a u t ho r i ty u nd e r s ec t i on 1 16 o f t h e A ct .
Sd / -
(D r . T. S Ma p w a l) D C I T, OSD ( T PL - IV ) Un d e r S e c r et a ry ( In v . I I I ) E- 2 , AR A C en t r e, Jh a n d ew a l a n E xt en s i o n, N ew D elh i -5 5 .
9ITA Nos. 1253 & 1254/Del/2021 Maharashtra Feeds P Ltd.
The same position has been clarified in the OM No. F.No. 299/56/ 2015-IT (Inv.III)/616 dated 8.4.2016 of the CBDT, which is repro duced as under:
F . N o . 2 99 / 56 / 20 1 5 -I T( I n v . III )/ 61 6 G ov e rn m en t of I n di a Mi ni st ry o f F i na n c e D ep a rt m en t o f R ev e n ue ( C en t ra l Bo a rd of D i r e c t T a x e s) * ** * ** * E - 2 , A RA C en t r e , G r oun d F l o o r , Jh a n de w a l a n E xt en si on , N ew D elh i D a t e d 8 t h Ap r il 2 0 16 T o, Al l P r. C h i ef C omm is si on e r o f I n c om e Ta x Al l D s G IT (I nv e s ti g a ti on ) [ E x c ep t D el hi & Mu mb a i ] , Al l C C sI T ( C e n t ra l ) Al l C sI T ( D R ) , I T SC Su b : Cl a rif i ca t i on on n ew ly i n se rt ed su b- s e ct i on 2A o f Se ct i on 23 4 B w . e .f . 0 1 .0 6 . 2 01 5 - r eg .
Si r / M a da m, K in dl y r e fer t o th e a bo v e.
2 . R ep o rt s / r ep r e s en ta t i on ha v e b e en r e c ei v e d i n t h e b oa rd ra i si n g th e is su e o f un c e r ta i nt y c a u s ed by t h e a m e nd m en t of in s e rti ng su b- s ect i on 2 à t o S ec t i on 2 34 B by Fi na n c e Ac t , 2 0 1 5 w . e .f . 01 .0 6 .2 0 1 5, i n so f a r, a s a pp l ic a bi li ty of pr o v i si on i s con c e r n ed . Tw o vi e w s h a v e em e rg ed , w h et h e r th e a m en d ed p r o vi s i on o f S e ct ion 2 3 4( 2 A) i s a pp li ca b l e on th e c a s e s p end in g b ef o r e I TS C a s on 0 1. 0 6 .20 1 5, o r t h e a m en d ed pr o v i si on s w il l b e a pp li ca b l e in t h e c a se s w h e r e a ppl ic a t i o ns a r e fil ed a ft e r 0 1 .0 6 . 2 01 5 .
3 . In th i s con n e ct i o n, I a m di r e ct ed t o en cl o s e th e c o p y of c om m un i ca t i on r e c ei v ed fr om TP L di vi s i on of C B D T vi d e F . N o. 3 70 1 49 / 3 1 / 2 0 1 6- T P L d a t ed 2 8 . 03 .2 0 16 i nt e r- a l l a c la r if yin g th e m a tt e r f or n e c e ss a ry c om pl ia n c e .
En c i: A s ab o v e.
Y ou r s fa i th fu ll y , Sd /-
(S un i ta V e rm a) D ir e c t o r (I n v. II I) , C B D T , N e w D elh i .
T el ./F a x: 0 1 1- 2 35 4 75 8 7 .
E- m ail : sun i la 7 1. v e r ma @ n i c.in 10 ITA Nos. 1253 & 1254/Del/2021 Maharashtra Feeds P Ltd.
6.5 The applicability o f provision of Section 234B ( 2A) has been fur ther e xamined by the Hon' ble Gujara t High Co urt in the case of Devdip Malls De velopers Pvt. Ltd. [2017] 85 taxmann.com 47 (Gujarat) . In the said dec isio n it has bee n held by the Ho n'ble High Court that interest u/s 234B ( A) was to be levied in respect of a dditio na l income offere d fo r tax be fore the Settlement Commission. The rele vant par t of the o rder is re produced as under:
" 10 .3 L ev y of i n t er e s t / c o mp ut a ti on o f in t e r e st sh a ll a ri se on l y a t th e s ta g e o f o rd e r u nd e r S e c ti on 2 45 D ( 4) o f th e I T A ct a n d w h en th e a ct ual a m oun t i s d et e r mi n ed , a f t er fol l ow in g d ue p r o c edu r e u nd e r S ec t i on 2 45 o f t h e I T A ct . Th e r e f or e , th e r el ev a n t d a t e w ou ld b e t h e d a t e o n w hi ch th e S e tt l em en t C om m is si on pa s s e s t h e o rd e r u nd e r S e ct io n 2 4 5D ( 4 ) of th e I T Act . Th e r e f o r e , a s su c h co n s i d e ri ng th e d e c is i on o f th e H on 'b l e Su p r em e C ou rt in th e c a s e o f t h e B ri j L a l (S up r a ) , t h e l egi sl a tu r e th ou gh t i t fi t t o c l a r if y th e p os it i on t ha t i n r e s p e ct o f t h e r egu l a r a s s e ss m en t , t h e i n t e r e s t on d e fa u l t of a d v a nc e la x i s pa ya ble u pt o th e da t e o f d et e rm in a t i on , si m i la r p r ov is i o n h a s t o a p p ly fo r a n a s s e ss e e goi ng f o r s e t tl em en t. It i s i n th i s c on t e xt t ha t cl a u s e s ( a ) a n d ( b) o f s ect i on 2 3 4B ( 2) v i s u a li z e s t hi s si t ua t i o n. A s righ t ly s u b m i t te d by S h ri Bh at t , l e ar n e d C ou n s el a p p ea ri n g on beh a l f o f th e R ev e n ue , i n th e e v ent , t h e a s s e s s e e ' s s ub mi ss i on i s a c ce p t ed , a s a ga i ns t t h e r egu l a r a s s e ss m en t p r o c ed ur e , wh e r e t h e a s s es s e e i s r equ i r ed t o p a y th e in t e r e st on d ef a ul t a d v a n c e t a x un d e r t h e p r o vi si on s o f s e c ti on 23 4 B( 1 ) , f ro m th e 1 s t d a y of Ap r il , f oll o w in g t h e en d o f f in a n ci a l y e a r t il l t h e da t e o f d et e rm in a ti on , th e a s s e s s e e g oin g f o r se tt l em e nt w o u ld n ot b e r equ i r e d t o p a y s u ch i n t e r e s t t h ou gh a d m it t e d ly th e r e i s a sh o rt fa l l . Su c h c an n ev e r b e t he i nt en ti on o f t h e le g is la t u r e . A t th i s s t a g e it is r equ i r e d t o b e n ot e d th a t it i s in th i s c ont e xt th a t th e i s s u e h a s b e en c la ri fi e d by th e B oa rd th at p r o v i s i on of Se c ti on 2 34 B (2 A ) w ou ld a pp ly t o a ll p en di ng p r o c e ed i n gs p en di ng a s on 0 1.0 6 . 20 1 5 . T h e C BD T h a s is s u ed th e c la ri fi c a to r y c i rc u l a r in e x e r ci s e o f p o w e rs u n de r S e ct i on 1 1 9 o f th e IT A ct . C on s id e ri n g t h e a f or e s a id fa ct s a n d c i rcu ms t a n c es , th e s ub mi ssi on on b eh a lf of th e p et i t i on e r s t h a t th e p r ovi si on of s e ct i on 2 34 B (2 A) s h a ll he a pp li c a b l e r et r o s p e cti v ely , is a b s ol ut el y mi s con c ei v ed . A s o bs e rv e d h e r ein a b ov e , li a bi li ty u n d er S e ct i on 2 3 4 B of th e I T A ct , w h i c h is m a n da t o r y wa s a l r ea d y t h e r e w hi ch fu rth e r ca m e t o be c l ar i fi e d w i t h r e s p e c t t o t h e a p p l ic a ti on b e f o r e t h e S et t l em ent C o mm is si on b y w a y o f s e cti on 2 3 4 B( 2 A) of t h e I T A ct . T h e r e fo r e , th e s ub mi ssi on on b eh a lf o f t h e p eti t i on e rs th a t t h e n e w l ia b il it y w oul d b e c r ea t ed b y w a y o f s ec ti on 2 3 4 B2 A) of th e I T A ct a n d th e r ef o r e , th e s a m e can n ot b e m a d e a p pli c a b l e r et r o sp e c ti v ely h a s n o s u bs t a n c e . A t th e c ost o f r ep e tit i o n, a s ob s e rv e d h e r e in a b ov e , se c t io n 2 3 4B o f t h e I T 11 ITA Nos. 1253 & 1254/Del/2021 Maharashtra Feeds P Ltd.
Act w a s v e ry mu c h t h e r e , h o w ev e r c on s i d e ri ng th e d e c i si on o f th e H on 'bl e S up r e m e C ou rt in t h e ca s e o f Br i j La l ( Su p r a ) , t h e t hi ng s w e r e r equ i r e d t o b e c la ri fi ed an d t ha t i s w h y t h e l egi sl a t u r e c a me ou t wi th s ect i on 2 3 4 ( 24 ) o f t h e I T A ct , w hi c h r eq u ir e s pa ym en t o f i nt e r e s t o n th e a dd it i on al a m ou nt det e r min ed b y t h e S et t l em en t C omm i s si o n wh i ch e xc e e ds t h e d i s c l o s u r e u nd e r S e cti on 2 4 5 C( 1 ) o f th e I T A ct .
1 0. 4 A t th i s st a g e i t i s r eq ui r ed t o b e n ot ed t h a t un d e r S e c tion 23 4 ( 2 A ) o f th e I T A ct , th e i n te r e st h a s b e en bi fu rc a t ed in t o tw o p a rt s i .e . ( 1) u pt o th e st ag e o f s e c ti on 2 45 C (1 ) a ppl ica t i on a n d ( 2) in t he ev en t o f a n y add it i on a l d e t e rm i na t i on of i n com e o f t h e d i s c l os u r e u nd e r s ect i on 2 45 (1 ) o f t h e I T A c t A s ob se r v ed h e r ei n a b ov e , if th e su b mi ss i on on beh al f of th e p et i t i o ne r s i s a cc ept e d , i n t ha t ca se , d e sp i t e sec t i on 2 3 4 B o f th e I T A c t w hi c h i s h el d t o b e m a n da t o ry , th e r e sh a l l n ot b e a n y in t e r e st l ia bil it y u pon th e a pp li ca t i o n on t h e a dd it i o n a l a m ou n t det e r mi n ed by t h e S e tt l em en t C o mm i s si on w h ic h e x c e ed s di s cl o su r e u nd e r S e cti on 2 45 C (1 ) o f th e I T A c t . I t c a nn ot b e t h e in t en ti on o f th e leg isl at u r e n o t t o c h a rg e t h e in t e r e st on th e a d d i ti on a l a m ou nt det e r mi n ed by t h e S e tt l em en t C o mm i s si on w h ic h e x c e ed s di s cl o su r e u nd e r S ect i on 24 5 C (1 ) of th e I T A c t. As ob s e rv e d h e r ei n a b ov e a nd it c ann ot b e d i s pu t e d th a t w h il e a p p r oa ch in g th e S et t l em en t C o mm is si on , h e ha s t o m ak e t r ue a n d co r r ect d is c lo s u r e. Th e ev ent u a li t y s u ch a s h app en ed in th e p r e s en t p et i t i on s h a s a ri s en onl y w h en it i s f ou n d t ha t on d et e rm in a ti on o f t h e a c tu a l a m oun t w h il e pa ss in g t h e o rd e r u n d e r Se c t i on 24 5 D (4 ) of t h e 1 1 A ct , i t h a s b e en f ou n d th a t t h e a m ou nt e xc e e ds th e di s cl o s u r e ma d e b y t h e a p pl ic a n t u n d e r S e c ti o n 2 4 5 C( 1 ) o f th e I T A ct . I f t h e a s s e s s e e w oul d h a v e m a d e th e t ru e a n d c o r r ect di s cl o su r e an d t h e r ea ft e r on d e t e rmi n a ti on a n d p a ss i ng th e o r d e r u n d er Se c t i on 2 45 D ( 4) of t he I T A c t , th e a m o u nt d e t er mi n ed do e s n ot ex c e ed th e am ou nt d i s cl o s e d a t th e t i m e o f di s cl o su r e u n d e r S e ct i on 2 4 5C ( 1) of th e I T A ct , su c h a n e v ent u a lit y w oul d n ot ha v e t a k en pl a c e . Un d e r th e c i r c um sta n c e s , t h e ca s e on b eh a l f of t h e p eti ti on e rs t h a t t he y a r e n ot li a bl e t o pa y th e i n te r e s t on th e a d di ti on a l a m ou nt u pt o t h e da t e o f o rd e r un d e r S e ct i on 2 4 5D ( 4) o f t h e I T A ct c a n n o t b e a cc e pt ed ."
6.6 From the above , directions of the Hon'ble Settlement Commission, ame nded provision, C irculars o f the CBDT and the ratio of the Ho n'ble Gujar at High Co ur t, it is cle ar that the appe llant was liable to pa y simple interest in two components:
" (a ) si m p l e in t e r es t @ 1 % f or e v er y m ont h/ p a rt o f m on th f o r th e pe ri o d com m en c in g f r o m 1 . 4. 2 0 1 4 a n d en d in g o n t h e d a te of m ak in g s u c h ap p li ca t i on / 5 2 45 C ( 1 3 .12 1 6) o n t h e a ddi t i on a l a m oun t o f t ax 12 ITA Nos. 1253 & 1254/Del/2021 Maharashtra Feeds P Ltd.
pa i d on t h e a d d it i o n a l in c om e di s cl o s e d i n th e a ppl i c a t i on u / s 24 5 C of th e A ct an d ( b) fu rth e r th e a p p ell a nt wa s li a bl e t o pa y sim pl e In t e r e st @ 1 % f o r e v er y m on t h / pa rt o f m on th f o r th e p e ri od c omm en ci ng on 1.4 .2 01 4 an d end in g on t h e da t e of o rd e r u / s 2 4 5 D ( 4 ) (2 7 .6 .1 8 ) on t h e a m ou nt w hi c h is eq u al t o d iff e r en c e o f t a x u p on t ota l i n co m e d e te rm in ed u / s 2 45 D ( 4 ) an d ta x u pon t ot a l i n com e d is c l o s ed in t h e a p pl ic a ti on fil ed u /s 24 5 C ( 1) o f th e Ac t ."
After per usa l of the order passed u/ s 153A r.w.s. 245D (4) of the Act, it is found that the AO has cha rged inte rest u/ s 234B of the Act in the ma nner provide d u/s 234B (2A) of the Act as direc ted by the Hon' ble Income Tax Settlement Commission vide orde r u/s 245D (4) (supra) . Therefo re, no mistake apparent from the record has bee n fo und in the o rder passe d by the AO u/s 153A r .w .s . 245D(4) of the Act in respect o f chargeability of intere st u/s 234B is co ncerned.
The submission of the appellant has been considere d in de tail and no merit has been found in the same in respect of chargeability of interest u/s 234B of the Act on account o f additional income disc losed be fore the Hon' ble Se ttlement Commission for Rs . 2,47,95,000/-, specifically keeping in view provisio n o f section 234B (2A) o f the Act and directio ns o f the Hon' ble Income Tax Settlement Commission vide order u/s 245D ( 4) of the Act (supra) regarding c harging of inte rest u/s 234B of the Act as amended w.e .f. 1.6.2015. Reference of the a ppellant to Annexure A to the main order o f the Hon'ble Se ttlement Commission u/s 245D(4) has been cons ide red. From the pe rusal of Annexure A , re produced as above, it is e vide nt that in the said Annexure which has been signed by the Additional Director of the Income Tax (Inv.) , the AO has been directe d to cha rge interest u/s 234B of the Act as pe r law. The A O in the orde r u/s 153A r.w.s 245D (4) (supra) has char ged the inter est u/s 234B (2A) as per the provisions of Income tax Act as applicable to the facts o f the present case. Further mention in the said Annexure that inte rest u/s 234B is to be cha rge d up to the date of orde r u/s 245D (1) on the income disc losed in the settlement application is with reference to firs t component (a) of the total interest to be char ged u/s 234B (2A)
(a) whic h was o therwise to be charge d upto the date of the applic ation u/s 245C (1) as pro vided u/s 234B (A) , howeve r, in 13 ITA Nos. 1253 & 1254/Del/2021 Maharashtra Feeds P Ltd.
Annexure A the same has been directed to be c harged upto the date of order u/s 245D ( 1).
Even otherwise if the appellant was ha ving any o bjection to the char ging o f interest u/s 234B as amended w.e.j .1.6.2015 in respect o f additiona l income disclosed be fore the Hon' ble Settlement Commission, the appellant should have file d a rectification application u/s 245D (6B) of the Act before the Hon'ble Settlement Commission as the said inte re st has been char ged by the AO in compliance of the direc tions give n by the Hon'ble Commissio n in the or der u/s 245D ( 4) of the Act.
6.7 Without prej udice to above findings and dis cussion, it is relev ant to mention he re that the present appeal is against the order passed by the AO u/s 154 of the Act and not against the order of the AO passed u/s 153A r.w.s. 254D (4) o f the Act dated 3.8.2018 giving effec t to the order o f Ho n'ble Settlement Commission. A mistake to be covere d u/s 154 of the Act sho uld be apparent from the record a nd sho uld not involve any debata ble issue where two opinions can be for med. I t should be obvio us and pate nt. I t has been he ld in T .S. Balaram, ITO vs. Volkart Brothe rs (1971) 82 ITR 50 (SC) that a m istak e appa rent o n the record mus t be an o bv ious and pate nt mistake and not something w hich can be establis hed by a long draw n process of reaso ning on the points on which the re may conceivably be tw o opinions. A dec ision on a deba table point o f law is not a mistake appare nt from recor d. It has also been he ld in CIT vs. He ro Cycle Pvt. Ltd. ( 1997) 228 ITR 163 (SC) that rectification u/s 154 can only be made when glaring mistake of fac t or law has bee n co mmitted by the Officer passing the orde r and it becomes appa rent from the reco rd. Rectific ation is not poss ible if the question is de batable . Hon'ble Calcutta High Court in CIT vs. Saty anara yan Bhalotia (1994) 74 taxmann 34 (Cal) has held that the mistake should not involve d statutor y interpreta tio n.
Keeping in v iew above facts and discussion it is held that there is no mis take apparent from reco rd in the or der passe d by the AO u/s 154 o f the Act and therefore, no merit is found in the gro unds of appe al taken by the appellant. Accordingly, the same are hereby dismissed."
14ITA Nos. 1253 & 1254/Del/2021 Maharashtra Feeds P Ltd.
6. We find that the Settlement order has been passed by the Hon'ble ITSC on 28.06.2018 for the A.Y. 2014-15 and A.Y. 2015-16 and directed the revenue to charge inter est u/s 234B upto t he date of order u/s 245D(1).
inter est u/s 234A to be char ged for delay in filing of the original return u/s 139/153C on the total income determined u/s 245D (4).
7. In this background, we have examined the judgment of Hon'ble Supreme Court in the case of Brij L al & Ors vs. Commissioner of Income Tax, Jalandhar in Civil Appeal No . 516- 527 of 2004 judgment dated 21.10.2010. The e ntire judgment of the Hon'ble Apex Co urt is as under:
" S . H. KA PAD I A , C J I 1 . L e av e g ran t ed .
2 . V id e r ef e r ra l o r de r s da t ed 1 4. 1 2 .2 00 4 a n d 2 0 .1 .2 00 5 t h e f oll ow in g q u e st i on s ha v e b e en r ef e r r ed to th e C on st i t ut i on B e nch o f th is C o ur t:
( i) Wh et h e r s ec ti on s 23 4 A, 2 34 B a n d 2 3 4 C of t h e In co m e T a x Ac t , 1 9 61 (for s h o rt " th e A c t" ) are at all a p p li ca b l e to pr o c e ed in g s of t h e S et t l em ent C o mm is s i on un d e r C h a pt e r XIX- A o f th e A ct ?
( ii) Wh eth e r th e S e t tl em en t C o m mi ss i o n can r e op en i ts c onc l ud ed pr o c e ed i n g s b y h a v in g r e c o u r s e t o s e ct i on 15 4 o f t h e Ac t , so as to l e vy in te r e st un d e r s e ct i on s 2 34 A , 2 3 4 B a nd 23 4 C o f th e A ct , th ou g h i t w a s n ot s o d o ne i n th e o ri gin al p r oc e e d in gs ?15
ITA Nos. 1253 & 1254/Del/2021 Maharashtra Feeds P Ltd.
( iii ) W h eth e r in th e a b s en ce of p e ri o d of l imi t a ti on p r e s c ri b e d f or ma k i ng th e o rd e r o f t h e S ett l e me n t, th e r e l ev a n t d a t e fo r det e r mi n in g t h e q u a n t um of in t e r e st cou ld b e t h e d a t e o f t h e sa i d o rd e r ?
3 . F o r th e s a k e o f c on v en i en c e, a ft e r h ea ri n g l ea rn ed c ou n sel on bot h si d e s , w e r e fra me th e a bo v e q u e st i on s.
( I) W h et h e r s e c ti on 23 4 B a p pl i e s to p r o c e edi ng s of the Set tl em en t C om m i s s i on u n d e r C h a pt e r X I X -A of t h e sa i d A ct ?
( II ) I f an s w er t o th e ab ov e q u e st i on is in th e a f fi r m a ti v e , w h a t is th e t e rmi n a l p oi n t f or l e v y o f su ch in t e r e st - Wh eth e r such in t e r e st sh ou ld be c o m pu t e d up to the date of the O rd e r u nd e r sec t i on 2 4 5D ( 1) o r u p t o th e d a t e of t h e O r d er o f t h e C o mm is si on un d e r s e ct i on 24 5 D (4 ) ?
( II I ) W h et h e r the S ett l e me n t C o m m i s si on c ou ld re o p e n it s c onc l ud ed p r oc e e di n gs b y in v ok i n g s e cti on 1 54 of th e s a id A ct s o as t o l e v y i nt e r e s t u nd e r se cti on 2 3 4 B, th ou g h i t w a s n ot s o don e in th e or i gin a l pr o c e edi ng s ?
R el e v an t p r o v i s i on s o f t h e I n c o m e T a x A ct , 1 96 1 :
4 . In o rd e r t o a n s w e r th e r e f ra m ed qu e st i on s , qu o t ed a b o v e, it w o u ld b e n e c e s sa r y f o r u s t o cit e t h e r el e v an t p r ovi s i on s o f t h e Ac t a n d t h e I nc o m e Ta x Ru l e s, a s t h e y st o o d a t th e m a t er ia l ti m e, w h i ch a r e a s u nd e r:
D e fin it i on s 2 (4 0) " r egu l a r a s s e s s m en t " m ea n s th e a ss e s s men t ma d e un d e r s u b- s ec t ion (3 ) o f s e c ti on 1 4 3 o r s e c t i o n 1 4 4;
2 (4 5) "t o t al i n c om e " m e a n s th e t ota l a mou n t o f in c om e r e f e rr e d to i n s e cti on 5 , c o m p u te d i n t h e m a nn e r la i d d o w n i n t hi s A c t;
C hap t e r X IV - Pr o c ed u r e fo r A s s e s sm e nt S el f-a s s e ss m ent 1 40 A . ( 1) Wh e r e a n y t a x i s pa y a b l e on th e b a si s o f a ny r et u rn r e qu ir e d to b e fu rni sh ed u n d e r s e ct i on 1 39 o r s e c ti on 1 4 2 o r a s t h e c a s e 16 ITA Nos. 1253 & 1254/Del/2021 Maharashtra Feeds P Ltd.
ma y b e , s e ct i on 14 8 , a f t er ta k i ng i nt o a cc ou n t t h e a m ou n t of ta x , i f an y , a l r ea d y pa i d u nd e r a n y p r o vi si on of th i s A ct , t h e as s e ss e e s h a l l b e l i a b l e t o pa y s u ch t a x t og et h e r w i th in t e r e st pa y ab l e u nd e r any p r ov i s io n of th i s A ct for any d el a y in fu rn i sh in g th e r etu rn o r a ny d e fa ul t o r d e la y in p a ym e n t o f adv an c e t ax , b e f or e fu rn i sh in g th e r e t u rn a n d t h e r et u rn s ha l l be a c c omp an i ed b y pr o o f o f pa ym ent of su ch ta x a n d i n t er e s t .
E xp l a na t i on .- - W h e r e th e a m oun t pa i d b y th e a s s e s s e e u nd e r t hi s sub - s e c ti on fa l l s s h o rt of th e a g g r eg a t e of t h e t a x a n d in te r e st as a f o r e sai d , t h e a mou n t s o p a i d s ha l l f i rst b e a d ju s t ed t o wa rd s th e in t e r e s t p a y a bl e a s a f o r es a id a n d t he b a la n c e , if a n y , s h a ll be a d ju s t ed t ow a r d s t h e t a x pa y a b l e .
( 2) A ft e r a r egu la r a s s e s sm en t un de r s e c ti on 1 4 3 o r s e cti on 1 44 ha s b e en m a d e , a n y a m oun t p a i d u n d e r su b- s e ct i o n ( 1 ) shal l be d ee m ed to have b e en paid t o w a rd s s u ch r egu l a r as s e ss m en t .
A s se s sm e nt 1 43 . (1 ) (a) W h e r e a r et u rn h a s b e en ma d e un d e r s ec t i on 1 3 9 , o r in r e sp on s e t o a n ot i c e u nd e r su b - s e c t i o n ( 1 ) o f s e ct i on 1 4 2 ,-
( i) i f an y t a x o r i nt e r e st is f ou n d d u e on th e b a s i s o f s u ch r etu rn , a ft e r a dj u s t m en t of a n y t a x ded u ct e d a t s ou r ce , a n y adv an c e t a x p a i d a n d a n y a m oun t p a i d ot h e r wi s e b y w a y o f t a x o r in t e r e st , th en , wi th ou t p re j ud i c e t o t h e p r ovi si on s o f sub - s ect i on ( 2 ), an i nt ima t i on s h a ll be s en t to the a s se s s e e sp e c i fy in g t h e su m s o p a y a bl e , a n d su ch i nt i ma t i on s h a l l b e de e m ed t o b e a no t i c e o f d e ma n d i ss u e d un d e r s e c ti on 15 6 a n d all th e pr o v i si on s o f t hi s A c t sh a l l a pp l y a c c o r d in gl y;
... . . P r ov i d ed a l s o t h a t a n i n t i ma t i on f o r a ny ta x o r in t e r e s t du e u nd e r th i s cl a u s e s h a l l n ot b e s en t a ft e r t h e e xp ir y o f t w o y ea r s f ro m t h e en d o f t h e a s s e ss m en t y ea r in wh i ch th e in c om e w a s fi rs t as s e s sab l e.
17ITA Nos. 1253 & 1254/Del/2021 Maharashtra Feeds P Ltd.
( b)W h er e a s a r e su l t o f a n o rd e r m a d e un de r su b - s ec ti on ( 3 ) of th i s se cti on o r s e cti on 14 4 o r s ec t i on 1 4 7 o r s e cti on 1 54 o r s e ct i on 1 5 5 o r s e ct i on 25 0 o r se cti on 2 5 4 o r s e cti on 2 60 o r s e ct i on 2 6 2 o r s e ct i on 2 6 3 o r s e c ti on 2 6 4 , or a n y o rd e r of s et t l em ent made u nd e r s ub - s e cti on (4) of s e cti on 2 45 D r elat in g to any ea rl i er a ss e s s men t year and p a s sed sub s eq u en t t o t h e f i lin g o f t h e r et u rn r e f er r e d t o i n cl a u s e (a ) , th e r e i s an y v a ri a t ion in t h e ca r ry f or w a r d l os s , d edu cti on , all ow an ce o r r el i e f c la i m ed i n t h e r e t urn , a n d a s a r e s u lt o f w hi ch, -
( i) i f an y t a x o r in t e r e st i s f ou nd du e , a n i n tim a t i on s ha l l b e s ent t o t h e a s s e s s e e sp e c if y i ng t h e su m s o p a y a bl e , a n d su ch in t ima ti on s h a ll b e d e em ed t o b e a n oti c e of d em a n d i s s u ed u nd e r s e ct io n 1 56 a n d a ll t h e p r o vi s i o n s o f th is A ct sh a l l a p pl y ac c o rdi ng ly , a n d ( ii) if an y r e fu nd i s du e , it sh a ll b e g ra n t ed t o t h e a ss es s e e:
Pr o v i d e d th a t a n i n t im a t i o n f o r a n y t a x o r in t e r e st d u e u n de r th i s cl au s e s h a ll n o t b e s en t a ft e r t h e e xpi r y o f f ou r y ea r s f r om th e en d of t h e f i n a nc i a l y e a r in w h i ch any su c h o rd e r w a s pa s s ed .
( 4) Wh e r e a r egu l a r a s se s s m en t u n d e r s ub - s e ct ion (3 ) of t hi s s ect i on o r s ec ti on 1 4 4 i s m a d e ,
--
( a ) a ny ta x o r i nt e r e s t p a i d b y th e a s s es se e un d e r sub -s e cti on ( 1) sh all b e d e em e d t o ha v e b e en pa id t o w a rd s suc h r e gu la r as s e ss m en t ;
Re c t if ic a t io n o f m i st ak e.
1 54 . (1 ) W i th a v i e w t o r ec t if y in g a n y mi st a k e a pp a r ent f r om th e r e c or d an in c om e- t a x a ut h o rit y r efe r r ed to i n s e c ti on 1 16 ma y ,- -18
ITA Nos. 1253 & 1254/Del/2021 Maharashtra Feeds P Ltd.
( a ) am en d a ny o rd e r pa ss ed b y i t un de r t h e p r ov i si o n s o f t h i s Ac t ;
( b) a m en d any i n t i ma t i on s ent by it un d e r s u b- s e ct i on (1 ) o f s e ct i on 1 43 or en h a nc e or r e d uc e th e a m ou n t of r e fun d gran t ed by i t u nd e r th at s u b- s e ct io n .
( 1A ) Wh e r e a n y m a t te r h a s b e en c ons i de r ed a n d d e ci d ed i n a n y pr o c e ed in g b y wa y o f a p p e a l o r r evi s ion r el a ti ng t o a n o rd e r r e fe r r e d t o in s u b- s e ct i on (1 ) , t h e a u th o ri t y pa ss in g su ch o rd e r ma y , n ot w it h s t a nd in g a ny t hi ng c on t a i n e d in a n y l a w fo r t h e t im e bei ng in f o rc e , a men d the o rd e r u n de r th a t su b- s e ct i on in r ela ti on t o a n y ma t t e r o t h e r th a n t h e m a tt e r wh i ch h a s b e en s o c ons i d e r ed a n d d ec i ded . ( 2 ) S ub j e ct t o t h e oth e r p r ovi si o ns of th i s s ect i on, t h e a u t h o ri t y c on c e rn ed- -
( a ) ma y m ak e a n a m en d m en t u n d e r su b -s e ct i on ( 1) of i ts ow n mo ti on, an d ( b) sha l l m ak e su c h a m en d m en t fo r r e c ti f yin g a ny su ch mi st a k e w hi ch h a s b e en b r o u gh t t o it s n ot i c e b y th e a s s es s e e , a n d w h er e th e a u th o ri t y c on c e rn ed i s t h e D epu ty C o m m i s si on e r (A pp ea ls ) , o r th e C om mi ss i on e r ( A p p ea l s) by t h e A s se s sin g O ffi c e r a l s o . (3 ) An a m en d m ent , which has th e e ff e ct of en ha n cin g an as s e ss m en t o r r ed u ci ng a r e fu nd o r ot h e r w i s e in cr e a s i n g t h e li a bi l i ty of t h e a s s e s s e e , s h a ll n ot b e ma d e u n d e r th i s s e c ti on u nl e ss th e au th o ri t y c on c er ne d ha s gi v e n n ot ic e t o th e a s s e s s e e of its in t en t i on so to do and has a ll ow ed th e a ss e s s e e a r ea s on a bl e o pp o rtu n it y o f b ein g h ea r d.
C hap t e r XVII - C o l le c t i o n and R e c o v e ry of Tax Li a b i li t y f or pa y m en t o f a d v a n c e t a x.
2 07 . Ta x s h a ll b e p a y a bl e i n a d va n c e d u ri ng a ny fin a n ci a l y ea r, in a c c o rdan c e w it h th e p r o v i si on s o f s ect i on s 2 08 t o 21 9 ( b ot h in clu si v e) , i n r e s p e ct o f t h e t ota l in c o me o f th e a s se s s e e wh i ch w o u ld b e ch a rg ea bl e t o t a x f o r t h e a ss e s s m en t y ea r i m m e dia t el y 19 ITA Nos. 1253 & 1254/Del/2021 Maharashtra Feeds P Ltd.
f oll ow in g t h e fi n a n c i a l y ea r , su ch i n c o m e b e i ng h e r e a f t er i n t hi s C hap t e r r e f e rr e d to as "cu r r ent i n c om e " . C om pu ta t i o n of adv an c e t ax .
2 09 . (1 ) Th e a m ou n t o f a d va n c e ta x p a ya bl e by a n a ss e s s e e in th e fin a n ci al y ea r s h a ll , su bj ec t t o th e pr o vi si on s o f s u b- s e ct i on s ( 2) and ( 3 ) , b e c o m pu t e d a s fol l o ws , n a me l y: - -
(a) wh e r e th e ca l cu l a ti on is made by the assessee for the pu rp o s e s of p a y m e n t o f a d v a n c e t a x u nd e r su b- s e c ti on ( 1 ) o r sub - s e c ti on (2 ) o r su b - s e c ti on (5 ) o r su b- s e cti on ( 6 ) o f s e c ti on 2 10 , h e s hal l fi rs t e s ti m a t e hi s c u r r en t in c om e a n d in c om e- t a x th e r e on sh a ll b e c a l c u la t ed a t t h e ra t e s in f o r c e i n th e fin a nc ia l y ea r;
Pa y m en t o f a d v a nc e t a x b y t h e a s s e ss e e o f h i s ow n a c c o rd o r i n pu r sua nc e of o rd e r o f A ss e s s i n g O f fi c er .
2 10 . (1) Ev e r y p e r s on who is l i a b le to pa y a dv a n c e tax u nd e r sec t i on 2 0 8 ( wh eth e r or n ot he has b e en p r ev i ou s l y as s e ss e d by way of r e gu la r a s s e s s men t) sh a ll , of his ow n ac c o rd , p a y, on or before ea c h of the due da t e s sp e ci fi ed in s ec t i on 2 11 , th e a pp r op ri a t e p e r c e nt a g e, s p ec i fi e d in th a t s ect i on , of t h e a d v a n c e t a x on hi s c u r r en t i nc o m e, c a l cu la t ed i n th e m an n e r la i d d o w n in s e ct i on 2 09 .
( 2) A p e rs on w h o p a y s a n y i ns ta l m ent o r in st a lm en ts of a d va n c e ta x u n d e r sub - s e c ti on ( 1 ) , m a y i n cr e a se o r r ed u c e t h e a m oun t of a dv an c e tax p a y a bl e in the r em a in i ng in st a l m e n t or in st al lm en t s t o a c c o rd w it h hi s e s ti ma t e o f hi s cu rr e n t in c om e an d th e a d v a nc e t a x p a y a b l e th e r e on , a n d m a k e p a ym en t o f t h e sa i d am ou n t in the r em a in i ng in st a lm en t or i n st a l m ent s ac c o rdi ng ly . I n t e r e s t p a ya bl e by a s s e ss e e .
2 15 . ( 1 ) Wh e r e, in a n y f in a n c ia l y ea r , a n a s s es s e e h a s pa id adv an c e t a x un d e r s ec t i on 20 9 A o r s e ct i on 2 1 2 on th e b a s i s of h is o w n e sti ma t e (i nc lu d in g r ev is e d e s t im a t e ) , a nd th e a d va n c e 20 ITA Nos. 1253 & 1254/Del/2021 Maharashtra Feeds P Ltd.
ta x so pa id is l e s s t h a n s e v en t y- fiv e pe r c en t o f th e a s s e ss e d ta x , si m pl e in t e r e s t a t t h e ra t e of fi ft e en p e r c en t p e r a n n um f ro m th e 1 s t da y of Ap ri l n e xt f ol l ow i n g t h e sa i d fin a nc i a l y e a r u p t o th e dat e of th e r e g ul a r a s s es s m e nt sh al l b e pa ya b l e b y t h e as s e ss e e u p o n t h e a m oun t b y w h i ch t he a dv a n c e ta x so p a id fall s s h or t o f th e a s s es s ed t a x :
Pr o v i d e d th a t i n t h e c a s e of a n a s s e ss e e , b e in g a com pa n y , t h e pr o v i si on s o f t h i s su b- s e c ti on sh a l l h a v e ef f e ct a s i f fo r t h e w o r ds " s e v en t y - fi v e p e r c ent ', t h e w o r ds " ei gh ty- th r ee a n d on e- th i r d p e r c e n t" h a d b e en s ub sti tu t ed . ( 2 ) Wh e r e b e f o r e t h e d a t e of co mp l e t i on of a r eg ul a r a s s e ss m en t , tax is p a id by the as s e ss e e un d e r s ec t ion 1 4 0 A or ot h e r wi s e, --
( i) i n t e r es t s h a ll b e c a l cu la t ed in a cc o r d a nc e w ith th e f o r e g oin g pr o v i si on u p to t h e d a t e on w hi ch t h e t a x i s s o pa i d; a nd ( ii) t h e r e a ft e r , i n t er e s t sh a l l b e c a l cu la t ed a t t h e ra t e a fo r e sa i d on th e a m ou nt b y w hi ch t h e ta x a s so pa i d ( in s o fa r a s i t r ela t es t o i n c om e s ub j e ct t o a d v a n c e ta x) f a ll s sh o rt o f t h e as s e ss e d t a x .
( 3) Wh e r e a s a r e s u lt o f a n o rd e r un d e r s e cti on 1 4 7 o r s e c ti on 1 54 o r s e ct i on 1 5 5 o r s e ct i on 25 0 o r se cti on 2 5 4 o r s e cti on 2 60 o r s e ct i on 26 2 o r s e ct i on 2 63 o r s e ct i on 26 4 o r a n o rd e r o f th e S et t l em en t C o m m is si on u n d e r s ub -
s ect i on (4 ) o f s e c ti on 2 4 5D , t h e a m ou nt on w h i c h i nt e r e s t w a s pa y ab l e u nd e r s ub - s e c ti on ( 1 ) h a s b e en i nc r ea s ed o r r edu c e d, a s th e ca s e ma y b e , th e i nt e r es t sh a l l be in c r e a se d o r r e du ced ac c o rdi ng ly , a n d- -
( i) in a ca s e w h e r e th e i nt e r es t i s i n c r ea s ed , t h e A s s e s si ng O ffi c e r sha l l s e r v e on t h e a s s e ss e e , a n ot i c e of d em a n d in t h e pr e sc rib ed f o rm s p e c i fy in g t h e su m p a ya bl e, a n d su c h n oti c e o f d e m an d sh a l l b e de e m ed t o b e a n oti c e u n d e r s e ct i on 1 5 6 a n d th e p r o v is i on s o f t h i s Ac t s ha ll a p p l y a c c o rd in gl y;
21ITA Nos. 1253 & 1254/Del/2021 Maharashtra Feeds P Ltd.
( ii) i n a ca se wh e r e th e i nt e r e s t i s r e d u c ed , th e e x c e ss in te r e st pa i d , i f an y , s ha l l b e r efun d ed .] ( 4 ) I n su ch ca s es a n d un de r su c h ci r cu m s t a n c es a s m a y b e p r e s cr ib ed , t h e A ss e s si ng O ffi c e r ma y r edu c e o r w a iv e th e i nt e r e st pa y a b le b y th e a ss e s se e u nd e r th i s s ect i on.
( 5) I n t hi s s ec ti on a n d s e ct i on s 2 1 7 a n d 2 7 3 , " a ss e s s ed t a x "
me an s th e tax d et e rm in ed on the b a s is of the r e gu la r as s e ss m en t ( r ed u c ed by th e a m ou n t of tax d ed u ct i b le in ac c o rdan c e w it h th e p r ov is io ns o f s e c t ion s 1 9 2 t o 1 9 4 , s e cti on 1 94 A , s e c ti on 19 4 C , s ect i on 1 9 4D , s e ct i o n 19 5 a n d s e cti on 1 96 A so fa r a s su c h t a x r ela t e s t o in c o me s u bj e ct t o a dv a n c e t a x an d s o fa r a s i t i s n ot d u e to v a ria t i on s i n th e ra t e s of ta x ma d e by t h e F in an c e A c t en a ct e d f o r t h e y e a r fo r w hi c h t h e r e gu la r as s e ss m en t i s m a d e .
( 6) W h e r e , i n r ela t i on t o a n a s s e ss m en t y ea r, a n a ss e s sm ent i s ma d e f o r t h e f i rs t tim e u nd e r s e ct i on 1 4 7 , t h e a s s e s s m e n t s o ma d e sh all be r e ga r d ed as a r eg u la r a s ses s m en t for the pu rp o s e s o f th i s s e c tion a n d s e ct i on s 21 6 , 21 7 a nd 27 3 .
In t e r est f o r d e fa u l t s in fu rn i s hi n g r etu rn of i n c om e .
2 34 A . ( 1 ) W h e r e th e r e t u r n o f i n c om e f or an y a s se s sm en t y ea r u nd e r su b- s ec ti on ( 1) o r s ub - s e c ti on ( 4 ) of s e c ti on 1 3 9 , o r i n r e sp on s e t o a n oti c e u n d e r su b- s e cti on ( 1) of s ec ti on 1 4 2 , i s fu rn i sh ed a ft e r th e du e d a t e , o r i s n ot fu rn i s h ed , th e a s s e s s e e shal l b e l iab l e t o p a y s i mp l e in t e r e st a t t he r a t e o f t w o p e r c en t f or e v e ry m ont h o r p ar t o f a m on th c omp ri s ed in th e p e ri od c om m enc i ng on t h e d a t e i mm ed i a t el y f ol l o wi ng th e du e da t e , an d, - -
( a ) w h e r e th e r et u r n i s fu rn i sh e d a ft e r t h e du e da t e , en d i n g o n th e d at e o f fu rn i s hi n g of th e r etu rn ; o r ( b) w h e r e n o r e tu r n h a s b e e n fu rni sh ed , en din g o n th e da t e o f c omp l et i on of th e a s se s s m en t u n d e r s e ct i on 1 4 4 , on th e a m oun t 22 ITA Nos. 1253 & 1254/Del/2021 Maharashtra Feeds P Ltd.
o f t h e t a x o n t h e t ota l in co m e a s d et e rm in ed un d e r s ub - s e cti on ( 1) o f s e c ti on 1 4 3 o r o n r egu la r a ss e s sm ent a s r ed u c ed b y t h e adv an c e ta x, if a n y , p a id , a nd a n y t a x de du c t ed o r c oll e ct ed a t s ou rc e ;
E xp l a na t i on 1 .-- I n th i s s e c ti on , "du e date" m ea n s the date sp e c i fi ed i n su b- s e c t ion ( 1 ) of s ec ti on 13 9 a s a p p li ca b l e i n t h e ca s e o f th e a s s e s s e e .
E xp l a na t i on 2.- -I n t h is su b- s e ct i on , "t a x o n th e t ot a l in c o me a s det e r mi n ed u nd e r s ub - s e c ti on (1 ) o f s e ct i on 1 4 3 " s ha l l n o t in clu d e th e a ddi ti on a l in c o m e- ta x , i f a n y , pa ya b l e un d e r s e c ti on 1 43 .
E xp l a na t i on 3 .- - Wh e r e , in r e la ti on t o a n a s s e s sm ent y ea r , a n as s e ss m en t i s m a d e f o r t h e fi rs t tim e un d e r s e c t io n 14 7 , t h e as s e ss m en t s o ma d e sh a ll b e r ega rd e d a s a r e gu la r a s s es sm en t f or th e pu rp o s e s o f th is s ect i on.
E xp l a na t i on 4 . - I n th is su b- s e ct i on , "t a x on t h e t ota l i n co me a s det e r mi n ed u n d e r s ub - se c t io n ( 1) o f s e cti on 1 43 o r on r e g ul a r as s e ss m en t " s h a l l , f or th e p ur p os e s o f c om pu t in g t h e i n t e r e st pa y ab l e u n d e r s e ct i on 1 40 A , be d e e m ed to be ta x on tot a l in c om e a s d e c la r ed in th e r etu rn .
( 2) Th e i n t e re s t pa y a b l e u n d e r su b- s e c tion ( 1 ) sh a ll b e r e d uc ed by t h e in t e r e st , i f a ny , p a i d un d e r s e cti on 1 40 A t o w a rd s t h e in t e r e st ch a rg ea bl e un de r t hi s se ct i on .
... ... ...... . (4) Where as a r e su l t of an o rd e r un de r s e c ti on 1 54 o r s e ct i on 1 5 5 o r s e ct i on 25 0 o r se cti on 2 5 4 o r s e cti on 2 60 o r s e ct i on 26 2 o r s e ct i on 2 63 o r s e ct i on 26 4 o r a n o rd e r o f th e S ett l e m ent C o m mi ss i on under su b- s e ct i on (4) o f s e cti on 2 45 D , t h e am ou n t o f t a x on w h i ch in t e r e st w a s pa ya bl e un de r sub - s e c ti on (1 ) o r s u b- s ec t i on ( 3 ) o f t h is s ec ti on ha s b e en in c r ea s ed o r r e d u ce d , a s t h e c a s e m a y b e , t h e in t e r e st s h a ll b e in c r ea s ed o r r e d uc e d a c c o rdi ng l y , a n d- -23
ITA Nos. 1253 & 1254/Del/2021 Maharashtra Feeds P Ltd.
( i) in a ca s e w h e r e th e i nt e r es t i s i n c r ea s ed , t h e A s s e s si ng O ffi c e r sh all s e r v e on th e a ss e s s e e a not i ce o f d em a n d i n t h e pr e sc rib ed f o rm sp e ci fyi n g th e sum pa y a b l e, a n d su c h n ot i c e of de m a n d sh a ll b e d e em e d t o b e a n o ti ce u n d e r s e ct io n 15 6 a n d th e p r o v is i on s o f t h i s Ac t s ha ll a p p l y a c c o rd in gl y;
( ii) i n a ca se wh e r e th e i nt e r e s t i s r e d u c ed , th e e x c e ss in te r e st pa i d , i f an y , sh a l l b e re fu n d ed.
( 5) Th e p r o v i s i on s o f t h is s e ct i on s h a ll a p pl y in r es p e ct o f as s e ss m en t s f o r t h e a ss e s sm ent y e a r c o mm en ci ng o n t h e 1s t da y of A pr il , 1 9 8 9 a n d s u b s equ en t a s s e s sm en t y e a rs.
In t e r est f o r d e fa u l t s in pa y m en t o f a d v a n c e t a x.
2 34 B . (1 ) S u b j ec t t o t h e ot h er p r o vi s i o n s o f th i s s e c ti on , w h er e , in an y f i nan c ia l y ea r , a n a s s e s se e w h o i s li a b l e t o p a y a d va n c e ta x u nd e r se c ti on 2 0 8 h a s f a il ed t o pa y su c h ta x o r, w h e r e t h e adv an c e tax pa i d by su c h a s s e ss e e under the p r o v isi on s o f s e ct i on 21 0 is l e s s t h a n n in et y p e r c ent of t h e a ss e ss e d t a x , th e a s s es s e e s h a ll b e l ia b l e to p a y sim p le i n t e r e s t a t t h e r a t e of tw o p e r c en t fo r ev e ry m ont h o r pa rt o f a m on th co mp ri s ed i n th e p e r io d f r o m th e 1 st d a y o f A p r il n ex t f oll o w in g su ch fi n a n c ia l y ea r t o t h e da t e o f d e t er mi n a ti on o f to t a l in c o m e un d e r s u b- s ect i on ( 1) of s e c ti on 1 4 3 a nd wh e r e a r e g ul a r a s s e s s m e n t i s ma d e , t o th e d a t e o f s u ch r egu l a r a s se ss m en t , on a n a m oun t equ a l t o th e a s s e s s ed t a x o r, a s t h e ca s e ma y b e, on th e a m oun t by w h ich th e a d v a n c e ta x p a id a s a f o r e sa id fa l l s s h o rt o f t h e as s e ss e d t a x .
E xp l a na t i on 1 .- - I n t hi s s e ct i o n , " a s s e ss ed t a x " m ea n s
(a) for th e p ur p o s es of co m pu t i n g the in t e r est p a ya bl e u nd e r sec t i on 1 4 0A th e t a x on th e t ota l i n co m e a s d ec la r e d in th e r etu rn r e f e r r ed t o in th a t s e c ti on;
( b) i n a n y ot h e r c a s e, th e ta x on t h e t ot a l in c o m e d et e r mi n ed u nd e r su b- se c t io n ( 1 ) of s ect i on 1 4 3 o r on r egu la r a s s e ss men t , 24 ITA Nos. 1253 & 1254/Del/2021 Maharashtra Feeds P Ltd.
as r edu c ed b y t h e a mou n t o f ta x d edu ct ed o r col l ect e d a t s ou r c e in a c c o rd an c e w it h t h e p r o v i si on s o f Ch a p t e r X V II on a n y i nc om e w hi ch i s s u bj e c t t o s u ch d edu ct i on o r c ol l ect i on a nd wh i ch i s ta k en in t o a cc ou n t i n c o mpu t in g s u ch t o t a l i nc o m e.
E xp l a na t i on 2 .- - Wh e r e , in r e la ti on t o a n a s s e s sm ent y ea r , a n as s e ss m en t i s m a d e f o r t h e fi rs t tim e un d e r s e c t io n 14 7 , t h e as s e ss m en t s o ma d e sh a ll b e r ega rd e d a s a r e gu la r a s s es sm en t f or th e pu rp o s e s of t h i s s e c ti on . E xp la n a t i on 3 .-- In Ex pl a n a ti on 1 an d i n su b- s e ct i on (3 ) "t a x on t h e tot a l i nc o m e d et e r mi n ed u nd e r s ub - s e c ti on (1 ) of s ec t i on 14 3 " sh a l l n ot in cl u d e the add it i on al in c om e- t a x , if a n y , p a y a bl e u nd e r sec t i on 14 3 .
( 2) Wh e r e, b ef o r e t he da t e o f d e t er m in a ti on of t ot a l i nc om e u nd e r su b - s ect i on ( 1 ) of s ec ti on 1 4 3 o r c om pl eti on o f a r e gu la r as s e ss m en t , tax is p a id by th e a ss e s s e e un d e r s ec ti on 1 40 A o r ot h e r w i s e, - -
( i) i n t e r es t s h a ll b e c a l cu la t ed in a cc o r d a nc e w ith th e f o r e g oin g pr o v i si on s o f t hi s s e c ti on u p t o t h e d a te on wh i ch th e t a x i s so pa i d , an d r edu c ed b y th e in t e r est , i f a n y , pa id un d e r s e c ti on 1 40 A t ow a rd s t h e in t e r e st ch a rg ea b l e u n de r t hi s s e c t i o n ;
( ii) t h e r e a ft e r , i n t er e s t sh a l l b e c a l cu la t ed a t t h e ra t e a fo r e sa i d on t h e am ou n t by w hi ch th e t a x s o p a i d to g et h e r w it h t h e adv an c e t ax p a id f a l ls sh o rt o f t h e a s s e s s ed ta x.
( 3) Wh e r e , a s a r e su lt of a n o rd e r o f r e a s se s sm en t o r r e- c omp u t ati on un d er s ec ti on 1 4 7 , t h e a mou n t on wh i ch in te r e st w a s p a y abl e u n de r s u b- s ect i on (1 ) i s in c r ea s ed , t h e a s s e s s e e shal l b e l iab l e t o p a y s i mp l e in t e r e st a t t he r a t e o f t w o p e r c en t f or e v e ry m ont h o r p ar t o f a m on th c omp ri s ed in th e p e ri od c om m enc i ng on th e d a y f oll o w in g t h e da t e o f d et e rmi n a ti on o f to t al i n com e un d e r su b- se c ti on (1 ) o f s ec ti on 1 4 3 a n d w h e r e a r egu l a r ass e s s m en t i s m a d e a s i s r e f e r r ed t o in su b - s e ct i o n (1 ) f oll ow in g t h e d a t e o f s u ch r eg ul a r a s s e s sm ent a n d en d in g o n t h e da t e of th e r ea s s es sm ent o r r e- c o mp ut a ti on u nd e r se ct i on 1 4 7 , 25 ITA Nos. 1253 & 1254/Del/2021 Maharashtra Feeds P Ltd.
on th e a m ou n t b y w hi ch th e t a x o n t h e t ot a l in c om e d e t er m i ne d on t h e b a s is o f t h e r ea s s e ss m ent o r r e- c omp u ta t i on e x c e ed s t h e ta x on th e to t a l in c om e d et e rmi n e d under su b- s e c ti o n (1) o f s e ct i on 1 43 o r on the ba s i s of t he r e g ul a r a ss e s s men t af o r e said .
( 4) Wh e r e , a s a r e s ul t o f a n o rd e r un d e r s e c ti on 1 5 4 o r s e cti on 1 55 o r s e ct i on 2 5 0 o r s e ct i on 25 4 o r se cti on 2 6 0 o r s e cti on 2 62 o r s e ct i on 26 3 o r s e c ti on 2 6 4 o r a n o rd e r of t h e S e t tl em en t C o mm is si on u n d e r su b- s e ct i on (4 ) o f s e cti on 2 45 D , t h e a m oun t on w hi ch i nt e r e s t wa s p a y a bl e u nd e r su b -s e c t i o n ( 1 ) o r s u b- s ect i on ( 3 ) h a s b e e n in c r ea s ed o r r e du c ed , a s t h e ca se m a y b e , th e in t e r e st s h a ll b e in c r ea s ed o r r ed u c e d a cc o rd in gl y , a nd --
( i) in a ca s e w h e r e th e i nt e r es t i s i n c r ea s ed , t h e A s s e s si ng O ffi c e r sh all s e r v e on th e a ss e s s e e a not i ce o f d em a n d i n t h e pr e sc rib ed f o r m s p e ci fyi n g th e s u m p a y a bl e a n d su c h n o t ic e o f de m a n d sh a ll b e d e em e d t o b e a n o ti ce u n d e r s e ct io n 15 6 a n d th e p r o v is i on s o f t h i s Ac t s ha ll a p p l y a c c o rd in gl y;
( ii) i n a ca se wh e r e th e i nt e r e s t i s r e d u c ed , th e e x c e ss in te r e st pa i d , i f an y , sh a l l b e re fu n d ed.
( 5) Th e p r o v i s i on s o f t h is s e ct i on s h a ll a p pl y in r es p e ct o f as s e ss m en t s f o r t h e a ss e s sm ent y e a r c o mm en ci ng o n t h e 1s t da y of A pr il , 1 9 8 9 a n d s u b s equ en t a s s e s sm en t y e a rs.
In t e r est f o r d e fe rm e n t of a dv a n c e t a x .
2 34 C . (1 ) Wh e r e in a n y f in a n ci a l y ea r ,- -
(a) the c om pa n y w hi ch is l ia b l e to pa y a d v a n ce tax u nd e r sec t i on 20 8 h a s f a il ed t o p a y su c h t a x o r --
( i) t h e a dv an c e t a x p a id by t h e c omp a n y on i t s cu rr en t i n c om e on o r b e f o r e th e 1 5 t h d a y o f J u n e i s l e s s th a n fi ft e en p e r c en t o f th e t a x du e on t h e r et u r n e d i n co m e o r th e a m oun t of su c h adv an c e t a x p a id on o r b ef o r e t h e 1 5t h d a y o f S ept em b e r i s le s s 26 ITA Nos. 1253 & 1254/Del/2021 Maharashtra Feeds P Ltd.
th a n f o rt y -f iv e p e r c en t of t h e ta x d u e on th e r et u rn ed i n c om e o r th e a mo u n t of s u ch a d va n ce t a x p a id on o r b e f or e t h e 1 5 th da y o f D ec e mb e r i s l e s s t h a n s e v en ty - fiv e p e r c en t o f t h e t a x du e on th e r etu rn e d in c om e , th en , t h e c o mp a ny sha l l b e l i a bl e to p a y si m pl e i n t e r e st a t t h e ra t e o f o n e a n d on e-h a l f p er c en t pe r m on t h fo r a p e ri od o f th r e e m on t hs on t h e a m ou nt o f t h e sh o rtf a ll f ro m fi ft e e n p e r c en t or f o rty - fiv e p e r c ent o r s e v en t y- fiv e per c en t, as the case may be, of th e tax due on th e r etu rn ed i n c om e ;
( ii) t h e a d v a n c e t a x pa i d b y th e c o m pa n y on it s cu r r en t in c om e on o r b e f or e th e 15 t h d a y o f Ma r ch i s l e s s t ha n th e ta x du e on th e r et u rn e d in c om e , t h en , th e c omp a n y sh a l l b e lia bl e t o p a y sim pl e i nt e r e s t a t t h e ra t e of on e a n d on e-h a l f p e r c ent o n t h e am oun t of the sh o rt fa ll f r om th e tax due on the r e t u rn ed in c om e :
E xp l a na t i on .- - I n th i s s e ct i on , " t a x d u e on th e re t u rn ed i n c om e "
me an s t h e ta x ch a r g e a bl e on t h e t ot a l i n c om e d ecl a r ed i n t h e r etu rn o f in c om e fu rn i sh ed b y t h e a s se s s e e f o r t h e a s s e ss men t y ea r co m m en ci n g o n th e 1 s t da y o f A p ri l i mm e di a t e ly f ol l ow i ng th e fi na n ci al y e a r i n wh i ch t h e a dv a n c e t a x i s pa i d o r p a ya bl e , as r edu c ed b y t h e a mo u n t o f ta x d e du c ti bl e or c ol l e c ti bl e a t s ou rc e in a cc o rd a n c e w it h th e p ro vi s i on s o f C ha p t e r XV II o n a n y in c om e w hi ch i s s ub je c t t o su ch d ed uc ti on o r co ll e ct i on a n d w hi ch i s ta k en in t o a c c ou nt in c o mp ut i n g s u ch t ot a l i n co m e ;
( 2) Th e p r o v i s i on s o f t h is s e ct i on s h a ll a p pl y in r es p e ct o f as s e ss m en t s f o r t h e a ss e s sm ent y e a r c o mm en ci ng o n t h e 1s t da y of A pr il , 1 9 8 9 a n d s u b s equ en t a s s e s sm en t y e a rs.
C hap t e r X I X- A - S e tt l em en t of C a s e s D e fi ni t i on s 2 45 A . I n t hi s C hap t e r , u n l e s s t h e c on t e xt ot h e r w i s e r equ i r e s ,- -
( b) "case" means a ny p ro c e ed i ng u nd e r t hi s A ct for the as s e ss m en t or r e-27
ITA Nos. 1253 & 1254/Del/2021 Maharashtra Feeds P Ltd.
as s e ss m en t of a n y p e r s on i n r e sp e c t o f a n y y e a r o r y ea r s , o r b y w ay of app e a l o r r e v i s i on in c on n e ct i on w ith su c h a s s e ss m en t o r r e- a s se ss m en t , wh i ch m a y b e p en d i n g b e f o r e a n In c om e T a x Au t ho r ity on th e da t e on w h ich a n a p p l ic a ti on u nd e r s ub - s e c ti on ( 1) o f s e cti on 2 4 5C i s ma d e:
Pr o v i d e d th a t wh e r e a n y a pp e a l o r a p pli c a ti on fo r r e vi si o n h a s be en p r ef e r r ed a ft e r t h e e xpi ry of t h e p e ri od sp e c i fi ed f o r t h e fil in g of s u c h a p p e a l o r a p pl i c a ti on f o r r e v i si on un d er t hi s A ct an d w h i ch h a s n ot b e en a d m i tt ed , su c h a pp ea l o r r evi si o n sh a ll n ot b e d e em ed t o be a p r o c e edi ng p e n di ng w it hi n t h e m ea n i ng o f th is cl a u s e;
Ap pl i cat i on f o r s et tl em en t o f c a s e s . 24 5 C ( 1) An a s s es se e ma y , at a n y s t ag e o f a c a s e re la t i n g t o h im , ma k e a n a p pl i c a ti on i n su c h fo rm and in s u ch manner as may be p r e sc r ib ed , and c ont a i ni ng a fu ll a n d t ru e d is cl o s u r e of h is in c om e w hi c h ha s n ot be en di s cl o s ed before th e As s e s sin g Of fi c e r, the ma n n e r in w hi ch suc h in c om e h a s b e en d e ri v ed , t h e a d di ti on a l a m ou nt o f in c om e - t a x p a y a b l e on s uc h in c om e a nd s uch oth e r p a rti cu la r s as ma y b e p r e s c ri b e d, t o t h e S ett l e m en t C om m i ss i on t o h a v e t h e ca s e s et tl e d a nd a n y s u ch a p p l i c a t i on s h a ll b e di sp o s ed o f i n t h e ma n n e r h er e i n a ft e r pr o vi d ed :
Pr o v i d e d t h at n o su c h a p p l i c a ti on sh a l l be m a d e u nl e ss ,- -
( a ) th e a ss e s s e e h a s fu rn i s h ed th e r e t u rn o f in c om e wh i ch he i s o r w as r equ i r e d t o fu rn i sh u n d e r a ny of th e p r o vi si on s o f t hi s Ac t ; an d ( b) t h e ad di ti on a l a mou n t o f in c om e t a x p a ya b l e on t h e i n c om e di s cl o s ed in the a pp li ca t i on e xc e e d s on e h u nd r ed th o u sa n d ru p e e s .
( 1A ) F o r t h e pu r p os e s o f s u b- s e ct i on ( 1 ) o f th i s s e ct i on a n d s ub - s ect i on ( 2 A ) t o ( 2D ) o f S ect i on 24 5 D , th e a d di t i on a l a m ou n t o f in c om e - t a x p a y a bl e i n r e sp e ct o f t h e in c om e d i sc lo s ed i n a n 28 ITA Nos. 1253 & 1254/Del/2021 Maharashtra Feeds P Ltd.
app li ca ti on ma d e u n de r s ub - s ec ti on ( 1 ) of th i s se c ti on s h a ll b e th e am oun t ca l c ul a t ed in a c c o rd a n c e w i t h t h e p r o vi si on s o f su b- s ect i on s ( 1 B) t o ( 1 D ).
( 1B ) Wh e r e th e i n c om e di s cl o s ed in t h e a p pl i ca ti on r el a t e s t o on l y on e p r e v i ou s y ea r ,--
( i) i f th e ap p li ca n t h a s n ot fu rn i sh ed a r et u rn i n r e sp e ct o f t h e to t al in c om e o f t ha t y ea r ( w h et h e r o r not a n a s s e s sm en t h a s be en m ad e in r e sp e ct of t h e t o ta l i n c om e o f th a t y ea r) , th en , e xc e pt in a c a se c o v er e d b y cl a u s e ( ii i ) , t a x sh a ll b e ca l c ul a t ed on th e in c o m e d i s c lo s ed i n th e a pp l i c a t i on a s i f s u ch in c om e w er e th e t ot a l i nc o m e ;
( ii) i f th e ap pli c a nt h a s fur n i sh ed a r e tu rn i n r e sp e ct o f t h e tot a l in c om e of th a t y ea r (w h eth e r o r n ot a n a s s e ss m ent ha s b e en ma d e i n pu r s u a nc e of su c h r etu rn ) , t a x sh a l l b e c a l cu la t ed on th e a gg r ega t e of t he t ot a l in c om e r e t u rn ed a nd t h e in c om e di s cl o s ed in t h e a p p lic a t i on a s if s u ch a gg r ega t e w e r e th e t ot a l in c om e ;
( iii ) i f t h e p r o c e ed in g p end in g b efo r e th e i n c o m e- ta x a ut h o r it y i s in th e n a t u r e of a p r o c e edin g f o r r ea s s e ss m en t o f th e a p p l i ca n t u nd e r sec t i on 1 4 7 o r b y w a y o f a pp ea l o r r ev is i on i n c onn e cti on w it h s u c h r e a ss e s s men t, a n d th e a p p l i ca n t h a s n ot fu rn i s h ed a r etu rn in r e sp e ct o f t h e t o t a l in c o m e o f t ha t y ea r in t h e c ou r s e o f su ch p r oc e e d in g f or r ea s s e ss m ent , t a x s h a ll b e ca l c u l a t ed on th e a g g r eg at e of t h e t ota l i nc o m e a s a s s ess ed in th e e a rl i e r pr o c e ed in g f or a s s e ss m ent un d e r s e c ti on 1 4 3 or s e cti on 1 44 o r s e ct i on 1 4 7 a n d th e i n co m e d i s c l o s ed in t h e a p pli c a ti on as i f su ch ag g r eg a t e w e r e th e t ota l i n co me .
F OR M N O . 3 4 B [S e e ru l es 44 C a n d 44 C A ] F o rm of a p p li ca t i on fo r s ett l e m ent of c a s e u n de r s ec t i on 2 4 5 C ( 1) o f t h e In c om e- t a x Ac t , 1 96 1 IN THE S ET T L E M EN T C O M M IS S I O N. . .. . .. .. .. . .. . .. . .. .. . .. . .. . .. . .. . .. . .. . .. . .. .. . S et tl e men t app li ca ti on N o . . .. . .. .. . .. . .. . .. .. . .. . .. . .. .1 9 .. . .. . .-1 9 . .. . .. . .. .29
ITA Nos. 1253 & 1254/Del/2021 Maharashtra Feeds P Ltd.
Ve ri fi ed today t he .. . .. .. . .. . .. . .. . .. .. . .. . .. . .. .. . .. . .. day of .. . .. . .. . .. .. . .. . .. .1 9 Pl a c e . . .. . .. . .. . .. . . .. . .. .. . .. . .. . .. .. . .. .
Si gn ed (A p p li c a nt ) P r o c edu r e on r e c ei pt of an a pp l i ca t i o n u nd e r sec t i on 24 5 C ...... ... ...
2 45 D . ( 1) O n r e c ei p t o f a n a pp li c a ti on un d e r s ec ti on 2 4 5 C , t h e Set tl em en t C o m mi s s i on sh a l l ca l l for a r ep o rt f r om the C o mm is si on e r a n d on t h e b a si s o f th e ma t er i a l s c ont a in ed in su c h r e p or t a n d h a v in g r eg a rd t o th e n a tu r e a n d c i r cu m s t a nc e s of the ca s e o r th e c o m pl e xit y o f t h e in v e s ti ga t i on i n v ol v ed th e r ein , t h e S et tl e m en t C om mi s si on ma y , by o rd e r , a ll ow t h e app li ca ti on t o b e p r o c e ed ed w i th o r r ej e ct th e a pp li ca t i on :
Pr o v i d e d th a t a n a p pl i ca ti on s ha l l n ot b e r ej ec t ed u n d e r t hi s sub - s e c ti on un l e s s an op p or tu ni t y has b e en g i v en to the app li ca nt o f b ein g h ea r d :
Pr o v i d e d fu r t h e r t h a t t h e C om m i s si on e r sh a l l fu rni sh th e r ep o rt w it hi n a p e ri od of f o rt y -f i v e days of the r e c e ip t of c om m un i ca t i on f r o m t h e S ett l e m ent C o mm is si on in ca s e of a ll app li ca ti on s ma d e u n de r S e ct i on 2 4 5 C o n o r a ft e r t h e 1 st d a y o f J ul y , 1 99 5 a n d i f t he C o mm i s si on e r fa il s t o fu rn i sh t h e r ep o rt w it hi n th e s a id p e r iod , t h e S ett l e m ent C om mi s si on m a y m a k e th e or d e r w it h out such r e po r t. ( 2 B) If th e S e t tl e men t C o mm is si on i s s a ti s fi ed , on a n a ppl i c a t i on m a d e in th i s b eh a l f b y th e a s s es s e e , t ha t h e i s un a b l e f o r g o od a n d su f fi ci ent r e a s on s to p a y th e a dd it i on a l a m ou nt o f in c om e t a x r ef e r r ed t o i n su b -
s ect i on ( 2A ) w i t h in t he t im e sp e ci f i ed i n th a t s u b- s ec t i on , i t ma y e xt en d the ti m e for p a y m ent of the a m oun t w h ich r e ma in s u np aid o r all o w p a y men t t h e r e of b y in s ta lm en t s if th e a s se s se e fu rn i sh es a d equ a t e s ec u r it y for t h e p a y men t t h er e o f .
( 2C ) W h er e t h e a d d it i on a l a m ou nt o f in c om e - t a x i s n ot p a id w it hi n th e ti m e sp e ci fi ed u nd e r su b- s e ct i on (2 A) , t h en , w het h e r o r n ot t h e S e tt l em ent C om m is s i on h a s ex t end ed th e t im e for pa y m en t o f th e a m ou nt w h i ch r em a in s u n pa i d o r ha s a l l ow e d 30 ITA Nos. 1253 & 1254/Del/2021 Maharashtra Feeds P Ltd.
pa y m en t t h e r e of b y i n s t a l m e n ts u n d e r su b- s ec t i on ( 2B ), t h e as s e ss e e sh a l l b e l i a b l e t o p a y s i mpl e i n te r e st a t f ift e en p e r c en t pe r ann u m on t h e a m oun t r em a i ni ng u n pa id f r om th e d a te o f e xpi r y o f t h e p e ri od o f t hi rt y - f iv e d a y s r e f e r r ed t o in s ub - s ect i on ( 2A ) .
( 4) Af t er e xa mi na t i on o f th e r e c o rd s a n d th e r e p or t o f t h e C o mm is si on e r , r e c ei v ed u nd e r su b - s ec ti on (1 ) , a n d t h e r ep o rt , i f an y , of th e C om m i s s i on e r r ec e iv ed u n de r su b - s e ct io n (3 ) , a n d aft e r g i vi ng an o p po r t un i t y to th e a p pl i ca n t and to the C o mm is si on e r to be h ea rd , eit h e r in p e r s on or th ro u g h a r ep r e s en ta ti v e d ul y a u th o ri z e d in th is b eh a l f, and a ft e r e xa m i n in g su c h fu rt he r e v id en c e a s ma y b e p l a c ed b e fo r e i t o r obt a i n ed by it , th e S et tl e m en t C om m i s si on ma y , in a c c o r da n c e w it h th e p r o v i si on s of t h i s Ac t, p a s s s uch o rd e r a s i t th in k s fit on th e ma tt e rs c ov e r ed b y t h e a pp l i ca t i on an d a n y ot h e r m a t t e r r ela tin g t o th e ca s e n ot c o v e r ed b y t h e a p pl i c a t i on , bu t r e f e r r ed to in t h e r ep o rt o f t h e C om m i s s i on e r un de r su b - s e ct io n ( 1 ) or sub - s e c ti on (3 ) . ( 6 ) Ev e r y or d e r p a s s e d u nd e r s ub - se c ti o n (4 ) shal l p r ov id e f or th e t e r ms o f s ett l e m e nt in c lu di ng a n y d e m a nd by w ay o f ta x , p en a l ty o r in t e r e st , t h e ma n n e r in w h i c h a n y su m du e u n d e r th e s ett l em en t sh a l l b e p a i d a n d a ll o t h e r m a tt e r s t o ma k e t h e s et t l em e n t e f f ec tiv e a nd s h a ll a l s o pr o vi d e t h a t t h e s ett l e m ent s ha ll b e v oi d if i t i s su bs equ en tly f oun d by t h e Set tl em en t C o mm i s s i on t h a t it h a s b e en o b ta i n e d b y f ra u d o r mi s r e pr e s en t a t i on o f fa ct s .
( 6A ) W h e r e a n y ta x p a y a bl e in p u rs u a n ce o f a n o rd e r u n d er s u b- s ect i on (4 ) is n ot p a i d b y t h e a s s es s e e w i th in t h ir t y- fi v e d a y s of th e r ec e i pt o f a c op y o f t h e o rd e r b y h i m , t h en , w h eth e r o r n o t th e S ett l em ent C o m mi s si on ha s ext en d ed th e t im e f o r pa y m en t o f su ch ta x or h a s a l l ow ed p a y m en t th e r e of b y in st a lm en t s , t h e as s e ss e e sh a l l b e l i a b l e t o p a y s i mpl e i n te r e st a t f ift e en p e r c en t pe r ann u m on t h e a m oun t r em a i ni ng u n pa id f r om th e d a te o f e xpi r y o f t h e p e r i od of th i rt y - fi v e d a y s a f o r e sa i d .31
ITA Nos. 1253 & 1254/Del/2021 Maharashtra Feeds P Ltd.
( 7) W h e r e a s ett l e m en t b ec o m es v oid a s p r ovi d ed u nd e r su b- s ect i on ( 6 ), t h e p ro c e edi ng s w it h r es p e c t t o t h e ma t t e r s c o v er e d by th e s ett l e m en t sh a l l b e d e em e d t o h a v e b e en r e viv e d fr o m th e st a g e at w h i c h th e a ppl i c a t i on w a s a l l ow ed t o b e p r oc e ed ed w it h by th e S et t le m en t C om mi ss i o n a nd th e in c om e-t a x au th o ri ty c on c e rn ed , m a y , n ot w it h st a n di ng a n yt hi n g c ont a i n ed in a n y oth e r p r ov i s i on of th is A ct , c o m p le t e su ch p r o c e ed i ng s a t an y t i m e b ef o r e th e e xpi r y o f t w o y e a r s f r om t h e end o f t h e fin an ci a l y ea r in w hi c h t h e s ett l em ent b e ca m e v oi d .
P ow e r of S ett l e men t C o m mi s si on to r e op en c o m pl et ed pr o c e ed in g s .
2 45 E . If the S e t tl em en t C o m mi s si on is of th e opi ni on (t h e r ea s on s f o r s u ch o p in i on t o b e r e c or d ed b y it in w rit in g) th a t , f or th e p r op e r di s p o s a l o f th e c a s e pen di ng b e f o r e it , it i s n e c e ss a ry o r e xp ed i en t t o r e op en a n y p r o ce ed in g c on n ec t e d w i th th e c a s e bu t w h ic h ha s b e en co mp l et e d u n d e r t h i s A ct b y a ny in c om e - t a x a ut h o ri t y b ef o r e th e a p pli ca ti on un d e r s e cti on 2 45 C wa s ma d e , it m a y , w i t h th e c on c ur r en c e o f t h e a pp l i ca n t , r e op en su ch p ro c e e di ng a n d p a s s su ch o rd e r t h e r e on a s i t th in k s fit , as if th e case in r el a ti on to w h ic h th e a pp l i c a ti o n fo r s ett l e m ent ha d b e e n m a d e b y th e a pp li c a nt un d e r t h a t s e cti on c ov e r ed su ch pr o c e e d in g a l so :
P ow e r s and p r oc e d u r e o f S et t l em ent C o mm i s si on .
2 45 F . ( 1) In a d dit i o n t o t he p o w e rs c on f e rr e d on t h e S et tl e men t C o mm is si on un d e r th i s C ha pt e r, it sh a l l ha v e a ll t h e p ow e r s w hi ch a r e v es t ed i n a n in c om e - ta x a u th o ri t y u nd e r t h i s A ct .
( 2) W h e r e a n a p pl ic a ti on m a d e u nd e r s e c t i on 2 4 5 C h a s b e en all ow ed to be p r o c e ed ed w it h un d e r sec t i on 245D, t he Set tl em en t C o mm i s si on sh a l l, u nt il a n o rd e r i s p a s sed u n de r sub - s e c ti on (4 ) o f s e c ti on 24 5D , h a v e , s ub j e ct t o th e p r o vi si on s of sub - se cti on ( 3) of th a t s e ct i on , e xc l us iv e ju ri sd i cti on to 32 ITA Nos. 1253 & 1254/Del/2021 Maharashtra Feeds P Ltd.
e x e rci s e th e p o w e rs a n d p e rfo rm t he fu nc ti on s of a n in c o m e- t a x au th o ri ty un d e r t h i s A c t i n r el a ti on t o t he c a s e:
( 3) N ot wi th s t a n d in g a n y t hi n g c on t a in e d in su b -s e ct i on ( 2 ) a n d in th e a bs en c e o f a ny e xp r es s d i r e c t i o n to th e c o nt ra r y b y t h e Set tl em en t Co mm is si on , n ot h in g c on t a i n e d in th i s s e ct io n s h a ll af f ect t h e op e ra ti on o f a n y oth e r p r o v i si on o f t h i s A ct r e q u irin g th e ap pl i ca n t t o p a y ta x on t h e ba s i s o f s el f- a ss e s sm e n t in r ela ti on t o th e m a t t e r s b ef o r e t h e S ett l em en t C om m i ss ion .
( 4) F o r t h e r em ov a l o f d ou b t, i t i s h e r eb y d e c l a r ed th a t , i n t h e abs en c e o f a n y e xp r e ss d i r ect i on b y th e S ett l em ent C om m i s si on to th e c ont ra r y , n oth i ng in th i s C h a pt e r s ha l l affect the op e ra ti on o f t h e p r o v i s i on s o f t h i s A c t i n s o f a r a s th e y r el a t e t o an y mat t e r s oth e r than th o s e before the S e t tl em en t C o mm is si on . O r d er o f s et tl e m en t t o b e c onc l u siv e .
2 45 - I. Ev e r y o rd e r o f s et tl e m en t p a s s e d u nd e r s ub - sec ti o n (4 ) o f s e ct i on 2 4 5D s h a ll b e c on c lu siv e a s t o t h e ma t t e rs s t a t ed th e r ein an d n o m a tt e r c o v e r ed b y s u ch o rd e r sh a l l, s a v e a s ot h e r w i s e p r ov i d ed in th i s Chapter, be r e op en e d in any pr o c e ed in g u nd e r t hi s A c t o r u nd e r a n y oth e r la w f o r t h e t im e bei ng i n f o rc e .
5. At this stage, it may be n ot ed t ha t s e ct i on 24 5 C s t o o d sub st it u t ed b y Fi na nc e A ct , 2 0 07 , w . e .f . 1 .6 .2 00 7 . P ri o r t o i t s sub st it u ti on, th e p r ov i s o t o s e ct i on 2 4 5 C( 1 ), a s sub sti tu t ed b y th e F in an c e Ac t , 1 98 7 , w . e .f . 1 .6 .1 9 8 7 a n d la t e r on a m en d e d by F in an ce A ct , 19 9 5, w . e. f . 1. 7 . 1 99 5 , r ea d a s un d e r:
" P r o v id ed t h a t n o s u ch a pp li c a ti on s h a l l be m a d e un l e ss ,--
( a ) th e a ss e s s e e h a s fu rn i s h ed th e r e t u rn o f in c om e wh i ch he i s o r w as r equ i r e d t o fu rn i sh u n d e r a ny of th e p r o vi si on s o f t hi s Ac t ; an d 33 ITA Nos. 1253 & 1254/Del/2021 Maharashtra Feeds P Ltd.
( b) t h e ad di ti on a l a mou n t o f in c om e t a x p a ya b l e on t h e i n c om e di s cl o s ed in the a pp li ca t i on e xc e e d s on e h u nd r ed th o u sa n d ru p e e s ."
6 . S e cti on 2 4 5 C ( 1) r ea d w it h t h e p ro v i s o t h e r et o, a s su b s t i tu te d by F in an ce A ct , 20 0 7 w . e .f . 1 .6 .2 0 07 , r ea ds a s u n d e r:
2 45 C . ( 1) A n a s s e s s e e ma y , a t a ny st a g e of a c a se r ela t i ng t o h im, m a k e a n a pp l i c a t i o n in s uch f or m a nd in su c h m a n n e r a s ma y b e p r e sc r i b ed , a nd c on ta in i ng a f u ll a nd tr u e d is cl o s u r e o f h is i n c om e wh i ch h a s n ot b e en d is cl o s ed b e f o r e t h e A s s e s si ng O ffi c e r , th e m a nn e r i n w hi c h su ch in c o m e ha s b e en d e riv e d, t h e add it i on al am ou nt o f in c om e- ta x p a y a bl e on su c h i n c om e a nd su c h oth e r pa rt i c ul a r s a s m a y b e p r es c rib ed , t o t h e S et tl em en t C o mm is si on t o h a v e t h e ca se set t l ed a nd a n y su ch a p pli c a t i o n shal l b e d is p os e d o f in t h e m a n n e r h e r e i na ft e r p r o vi d ed :
Pr o v i d e d t h at n o su c h a p p l i c a ti on sh a l l be m a d e u nl e ss ,- -
( i) th e ad d i ti on a l a mou n t o f in c om e t a x pa ya b l e on th e i n c om e di s cl o s ed in th e a pp li c a ti on ex c e ed s th r e e la k h rup e e s; a n d ( ii) s u c h ta x a nd t he i nt e r e s t t h e r e on , wh i ch w ou l d h a v e b e en pa i d u n d e r t h e p r o v i si on s o f t hi s A ct h a d t h e in c om e d i s c l os ed i n th e a p p li cat i on b e e n d ec la r ed i n t h e r e t urn of i n c om e b ef o r e t h e As s es si n g O f fi c e r on th e d a t e of a p pl i c a t ion , h a s b e en p a i d o n o r be f o r e th e da t e of ma k in g th e a p p l i c a t ion a n d t h e pr o o f o f su c h pa y m en t is a tt a c h ed wi t h th e a pp li c a ti o n .
A n a ly s i s o f t h e Ac t
7 . L iab i l it y t o p a y a d v a nc e t a x a ri s e s u nd e r s e ct i on 2 07 . Th e sa i d s e cti on i s b a s ed on th e p r in ci pl e " pa y a s y ou ea r n ". It r equ i r e s t ax t o b e p a id d u ri n g th e fi na n c ia l y e a r . It ha s t o b e i n r e sp e ct o f t h e to t a l i n c o m e o f t h e a s s e ss e e w h i ch w o ul d b e cha rg e abl e to t a x u n de r t h e A ct . Th e s a i d t ot a l i n c o m e i s not a s u nd e r st o od i n s e c ti on 2 ( 4 5) bu t it is equ a t ed to " cu r r en t in c om e " fo r t h e p u rp o s e s o f Ch a p t e r XV I I . A ft e r t h e Am end i ng 34 ITA Nos. 1253 & 1254/Del/2021 Maharashtra Feeds P Ltd.
Ac t of 1 9 87 , a dv a n c e t a x i s t o b e pa i d on th e cu rr e n t in c om e w hi ch w ou l d be c h a rg e a bl e to ta x for the a s s e s sm ent y ea r im m ed iat el y f o ll ow i n g t h e fin a n c ia l y e a r . S e ct i on 2 1 0 c a s ts t h e r e sp on sib i l it y of p a y m en t of advance tax on th e a ss e ss e e w it h o ut r equ i rin g t he assessee to su b m it hi s e st i m a t e of adv an c e ta x p a y a bl e . Pr o v i si on f o r p a y m en t o f a d va n c e t a x i s mo d e of q ui c k c o ll e ct io n of tax. T h us , se c t i on 2 0 7 d e fin e s li a bi l i ty t o p a y a d v a nc e t a x i n r e sp e ct o f in c om e s r ef e r r e d to in s ec t i on 2 0 8 . H ow e v er , a d v a n c e ta x p a id i s a dj u sta b l e t o wa rd s th e t a x d u e . A d v a n c e t a x i s c oll e ct ed e v en b e fo r e th e in c om e ta x b e c om e s d u e a n d p a y a bl e . By i t s v e ry n a tu r e, a dv a nc e ta x i s pr e- a s s e ss m en t c oll e ct i on of t a x es eit h e r b y d edu ct i on of t a x a t s ou rc e o r b y p a y m e n t of a d va n c e t a x w hi c h h a s t o b e a d j u s t ed to wa rd s in c o m e ta x l ev ie d on th e t ota l in co m e . Th e a b o v e t w o me t h od s o f r e a l iz a ti on ev en b e f o r e a n y a s se s s m en t i s a ut h o riz ed by s e ct i on 4 ( 2) a r e in c o r p or a t ed in C ha pt e r XV I I wh i ch d ea l s w it h " c o ll ect i on a n d r e c ov e r y " . In fa c t, s e ct i on 1 90 ( 1) c l a ri fi e s th a t th i s m et h o d o f pa y m en t o f t a x w ill n ot p r eju di c e th e ch a rg e o f t a x u nd e r s e ct i o n 4 ( 1) n or w il l it m o di f y th e l i a b il it y of t h e as s e ss e e t o pa y in c om e t a x p u rsu a n t to a n a ss es s m e n t o rd e r . [ Se e M od i I n du st ri e s L i mi t e d , M odi na g a r and Oth e r s v. C o mm is si on e r o f I n c om e Ta x, D e lh i a n d An o t h er , 2 16 I T R 75 9 a t 7 80 ] At on e p o in t o f t i m e , s e ct i on 2 0 9( 1 )( a ) ( ii i) ( r el a ti n g t o c omp u t ati on of advance tax) p r o vi d e d that th e in c om e tax ca l cul a t ed on the tot a l i n c om e w i th r e fe r en c e t o wh i ch the de m a n d f or a d v a n c e ta x w a s ma d e sh ou ld b e r ed u c ed b y t h e am oun t o f in c o m e t a x d e d u ct ib l e i n a c c o rd a n c e wi th s e ct i on s 1 92 t o 1 9 4 , 1 94 A a nd 1 9 5 o n a n y in co me in c lu d ed in th e t ot a l in c om e . Th e l e v y o f in t e r e st u nd e r s e ct i on 2 15 i s p a rt o f t h e pr o c e ss o f a s s e s s m en t . I f t h e i n c o m e t a x l ia b i l it y on t h e fi rst da y of th e a s s e s s m en t year is l a rg e r than the a m ou nt of adv an c e ta x s ta n di n g t o t h e cr ed it of t h e a ss e s s e e t h en in t e r e st w il l h av e t o b e pa i d u nd e r s e ct i on 2 1 5 on 75 % o f th e d e fi c it am oun t o f t a x f ro m t h e fi r s t d a y of t h e a ss e s sm ent y e a r to t h e 35 ITA Nos. 1253 & 1254/Del/2021 Maharashtra Feeds P Ltd.
da t e o f co mpu t a ti o n of t ot a l in c om e vi d e a ss e s sm ent o rd e r . In t e r est un d e r s e c t i on 2 15 i s ch a rg e a b le f r om th e fi r st d a y o f Ap r il n e xt f oll o w in g th e fi na n c i a l y ea r w h er e in th e a d va n c e t a x w a s p a id up t o t h e d at e of r eg ul a r a s s es s m en t , i f n o ta x h a s be en pa i d un d er s e c ti on 140A or o th e rw i s e . H o w ev e r , s e cti on 2 15 (2 ) pr o vi d e s th a t wh e r e a d va n c e ta x p a id i s l e ss t h a n 7 5 % of th e " a s s es s ed t a x" , bu t th e a s se s s e e ha s p a id ta x un d e r s e c ti on 1 40 A o r o th er w i s e be f o r e th e da t e of co m pl e ti on of r e g ul a r as s e ss m en t th en t h e i n t er e s t sh a l l b e l i mi t ed t o th e i nt e r e s t on th e sh o rtf all b et w e en t h e " a s s e s s ed t a x " a n d t h e a d va n c e t a x pa i d for th e p e ri o d fr o m the fi r s t Ap r il n ext f oll ow in g the fin an ci a l y e a r u p t o d a t e o f p a y m en t u n d e r s e ct i on 1 40 A p lu s in t e r e st o n th e sh o rt fa l l b et w e en "a s s e s se d t a x " a n d " t ot a l t a x pa i d " f o r th e p e ri o d f ro m th e da y f ol l o w in g t h e da t e o f such pa y m en t u n d e r s e ct i on 14 0 A u p to th e date of r egu l a r as s e ss m en t . C o m in g t o s ec ti on 140A, as a r e s ul t of the am en d m en t o f s e ct i on 1 4 0 A (1 ) b y D i r e ct T ax La w s Am end men t Ac t , 1 98 7 w . e . f. 1 .4 .1 9 89 a n d v i d e F in a n c e A c t of 1 9 99 , t h e as s e ss e e i s r equ i r e d t o c a l cu l a t e t h e ta x pa ya b l e on th e ba si s o f th e r etu rn t o b e f urn i sh ed un d er se c t ion 1 3 9 or u n d e r s e c ti on 1 42 o r u n d e r s e c ti o n 1 48 a ft e r t a k in g i nt o a cc oun t t h e a m oun t o f t ax p a i d u n d e r th e A ct ; t o c a l cu la te a l s o in t e r e st pa ya bl e u nd e r sec t i on 2 34 A o r u nd e r s e ct i on 2 3 4B /2 3 4 C f o r a ny d e fa ul t o r d el a y i n p a y m e nt o f a d va n c e ta x ; t o p a y su ch t a x w it h in t e r e st before the assessee fu rn i sh e s hi s re t u rn . Th e E xp l a na t i on t o s e ct i on 1 4 0A ( 1) in t e r a li a p r o vid e s th a t w h er e th e a m ou n t p a id b y t h e a ss e s s e e un d e r sect i on 1 40 A( 1 ) f a ll s sh o rt of t h e a gg r e ga t e o f th e t a x a n d i n t e r est t h er e o n t h e am oun t s o p a id is fi rs t a dj u st e d t o w a rd s in t er e st pa ya b l e a nd th e b a lan c e , i f a n y , i s a dj u s t ed t ow a rd s th e t a x p a y a b l e . Th u s , am oun t( s) p a i d un d e r s e cti on 1 40 A i s d e em e d t o h a v e b e en pa id to wa rd s r e gu la r a s s e s s m ent .
8. Th e li abi li ty to p ay i nc o m e ta x is f oun d ed on s e ct i on s 4 an d 5 w hi ch are the ch a rg in g s e ct i on s . S e c t i on s 36 ITA Nos. 1253 & 1254/Del/2021 Maharashtra Feeds P Ltd.
1 43 , 14 4 an d 1 4 7 a r e ma c hi n e r y s e c ti on s to d et e r mi n e the am oun t o f t a x pa y a bl e. T h us , w h e r ea s s e c ti on 1 43 ( 3) sig ni fi e s c omp u t ati on of i n c om e , s e c t i on 14 7 si gn i fi e s c om p ut a t i on of e s cap ed in co m e. A s hel d i n t h e ca s e o f C .A . A br a ha m v . In c om e - Ta x O ff i c e r , K o tt a y a m a nd An ot h e r [ ( 1 9 61 ) 4 1 I T R 4 2 5 (S C) ] , th e e xp r e s si on "a s s e s sm en t" in a gi v en p r o vi si on mu st be det e r mi n ed on a n e xa m i na t i on o f th e r el ev a nt p r o vi si on s in qu e s ti on and th e f a c t t h a t it i s u s ed in t h e n a r r ow e r sen s e el s ew h er e w il l n ot m e a n th a t it is s o u s ed i n th e p r o vi si on un d e r e xa m i n a ti on . The word can be used to c ov e r the wh ol e pr o c ed u r e to a s c e rt a in the l i a bi li t y and th e ma ch in e ry f or en f o rce m ent . P ri o r to 1 .6 .1 9 99 , s e ct i on 1 4 3 ( 1 A) (a ) in t e r a li a pr o v id ed th a t wh e r e th e t ota l in c o me as a r esu l t of any adj u s tm en t s ma d e e xc e e d ed th e t ot a l in c o m e d ec la r ed i n t h e r etu rn by an y a m ou nt th en i t w a s op en to t h e A . O . t o in c r ea s e th e am oun t o f t a x p a y a b l e u nd e r s ec t ion 14 3 ( 1 ) b y a dd i t ion a l in c om e ta x c a l cu la ted a t t h e sp e ci fi e d r a t e . In b ri e f, s e c ti on 1 43 (1 A ) p r ov i d ed f o r th e l e v y of a dd it io na l in c om e t a x o f a n am oun t equ a l t o 2 0% o f th e t a x p a y a bl e on t h e a m ou n t o f di f f e r enc e b et w e en t h e t ot a l in c om e det e r mi n ed un d e r s e cti on 1 43 (1 ) and t ot a l i n c om e d e cl a r ed in the r etu rn . Wh e r e the add it i on al in c om e t a x w a s i n cr ea sed , th e A . O . ha d t o se rv e a n oti c e u nd e r s ec t i o n 1 5 6 . Ev en un d e r se c ti on 1 4 3( 1 B) , a s it st o od b ef o r e 1 .6 .1 9 9 9, w h e r e a n a ss e s s e e fu rni sh ed a r ev i sed r etu rn u n d e r s e c ti o n 1 39 ( 5) a ft e r s er v i c e of i nt i m a ti on , the as s e ss e e w a s li a bl e t o p a y a d dit i ona l i n com e ta x i n r ela t i on t o adj u s tm en t s made u nd e r s ect i on 1 4 3 ( 1) ( a ) r e a d w i th the pr o v i s o.
9 . N ow , C h a pt e r X VI I d e a l s w it h " col l e ct i on a nd r e c ov e r y" . It c ov e r s Ta x D edu ct i on a t S ou r c e a n d A dv a n c e Pa ym en t o f t a x e s ( s e e s e ct i on 1 9 0 ) . Se c ti on C d e a l s wi th a dv a n ce p a y m e n t of ta x e s. S ect i on 20 7 r ef e r s to li a bi l i ty to pay a dv a n c e ta x w h er e a s s e c ti on 2 0 9 d ea l s wi th c o m pu ta t i o n of a d va n c e ta x . S e ct i on 21 5 r e fe r s to in t er e st pa ya bl e by the 37 ITA Nos. 1253 & 1254/Del/2021 Maharashtra Feeds P Ltd.
as s e ss e e . S e c ti on 2 1 0( 1) in t e r a l i a p r o v i d e s t ha t ev e r y p e r s on w h o i s l ia b l e t o p a y in t e r e st un d e r S ect i on 2 0 8, s h a ll o f h i s o w n ac c o rd p a y , on e a c h o f th e du e da t es s p e ci fi ed i n s e cti o n 2 1 1 , th e app r op ri a t e p e r c en ta g e o f a dv a n c e ta x on h i s cu r r en t i nc om e ca l cul a t ed in the ma n n e r un d er se c ti on 2 09 . Un d e r s ec ti on 2 09 (1 ) (a ) , t h e a m o un t of a d v a n c e t a x pa y a b l e by t h e a ss e ss e e in an y fin an c ia l y ea r i s a s f oll ow s:
( a ) w h e r e ca lc u la t i o n i s ma d e b y t h e a s se s s e e fo r t h e p ur p o s e s o f p ay m e nt o f a dv a n c e t a x un d e r s e c ti on 20 9 ( 1 ) , h e sh a l l fi r st e s ti mat e h i s c u r r en t i n c om e a n d th e t a x sh a l l b e c o mp u t ed a t th e r at es in fo r c e i n t h e f in a n ci a l y ea r. Th u s , li a bil it y a nd c omp u t ati on o f a d v a n c e t a x i s d on e u n de r s ec ti on C o f C h a pt e r XV I I . On th e ot h e r ha n d, i n te r e st fo r d e fa u l t s i n p a y m e nt o f adv an c e tax f a ll s u nd e r s e ct i on 2 3 4 B, a pa rt f r om se c t i on s 2 34 A an d 2 3 4 C , i n s e cti on F o f C h a pt e r XV II . Th u s , l e vy o f in t e r e st is in ci d en t a l to t h e l i a b il it y a n d c om pu ta t io n of a d v a n c e ta x . I t i s in t e r e st in g t o n o t e t ha t s e ct i on 2 3 4A ( 4) in t u rn r e fe r s to t h e in cr e a s e or r ed u ct i on o f in t er e st sub s eq u en t t o t h e O rd e r o f th e C o m m i s s i on un de r s ec ti on 2 4 5D ( 4 ) in c r ea sin g o r r ed uc in g th e am oun t of ta x p a y a bl e a nd so a l s o s e ct i on 2 34 B (4 ) .
Un d e r s e cti on 2 3 4B , w h e r e in a n y fi n a nc i al y e a r a n a s s e s s e e w h o i s li a b l e t o p a y a dv a n c e ta x u n d e r s e cti on 20 8 fa i ls t o p a y su c h ta x o r wh e r e t h e a dv a n ce t a x p a id un d e r s ec ti on 21 0 i s le s s th an 90% of th e a ss es s ed ta x t he a s s ess e e sh a ll pay in t e r e st f r o m th e fi r st d a y of A p ri l n e x t f ol l o w in g s uc h f in a n c i a l y ea r t o t h e d a t e of d et e r mi na t i on of t ot a l i n c om e u n d e r s e c ti on 1 43 (1 ) o r t o t h e d a t e o f r eg u l a r a s s e ss m en t on t h e a m oun t equ a l t o th e a s s e s s ed t a x w h i ch h a s b e en d ef in ed in E xp la n a ti on 1 t o m ean ta x on t h e t ot a l in c om e a s det e r mi n ed un de r s e cti on 1 43 (1 ) as r ed u c ed b y t he a m oun t o f t a x d edu ct ed a t s ou r c e i n ac c o rdan c e w i th C h a p t e r X V I I on i n c om e wh i ch is su bj e ct t o ded uc t i on a nd w h i c h i s t a k en in t o a c c oun t in c o mpu t in g tot a l in c om e . B y Exp l a n a ti on 3 , it is cla ri fi ed t ha t fo r d e fa u l t o f sh o rt pa y m en t in t er e st w il l b e ch a rg ed on t he d i ff e r en ce b e tw e en 38 ITA Nos. 1253 & 1254/Del/2021 Maharashtra Feeds P Ltd.
" a ss e s s ed t a x " (a s de fin ed ) a n d th e a d v a n c e t a x pa id by t h e as s e ss e e an d t h a t f o r t h e a b ov e pu rp o s e "a d di ti on a l in c om e t a x "
if an y pay ab l e u nd e r s e ct i on 1 4 3 i s n ot t o b e t a k en i nt o a cc oun t . H ow e v e r, se c ti on 2 3 4 B( 2) c o v e rs a s it ua t i on w h e r e, b e f o r e th e da t e o f d e t e rm in a ti on o f to t a l in c om e u nd e r s e ct i on 14 3 (1 ) o r c omp l et i on o f r egu l a r a ss e s s m en t, ta x i s pa i d b y t h e a ss e s s e e u nd e r sec t i on 1 4 0 A or oth e r w i se, i nt e r e s t sh a ll b e ca l cu l a t ed u nd e r sec t i on 23 4 B( 1 ) up t o th e d a t e o n w hi ch t a x wa s so p a id an d r ed u c ed by the i n t e r es t , if a ny , p a id un d e r s e cti on 1 40 A t ow a rd s i nt e r e s t ch a rg ea b l e un d e r s e cti on 2 3 4 B. 1 0. C om in g t o C h a pt e r XI X- A w h i c h d ea l s w i th S et tl e m e nt o f C a s es , it may be s ta t ed that the word " ca s e" is d e fi n ed u nd e r sec t i on 24 5 A ( b) . It is an e xh a u st i v e d e fin it io n . Th e de fi ni ti on m a k es i t c l ea r th a t a n a pp li c a ti on f o r S et tl em en t s h a l l li e on l y w h en a ny p r o c e ed in g s f o r a s s e s sm en t o r re - a ss e s s m en t is p en d in g o r a n a pp ea l o r r e v i s i on i n c on n e ct i on w i t h s u ch as s e ss m en t o r r e- a s se s sm en t i s p end in g b e fo r e t h e In c om e Ta x Au t ho r ity . Un d e r s ec t i on 2 4 5 C ( 1) , s u ch a pp li c a ti o n fo r s ett l e m ent wi ll not be m a in t a in a bl e w i th ou t fu ll and t ru e di s cl o su r e o f t h e i n c om e b y t h e a p pl i c a n t, t h e m a nn e r i n w h i c h su c h u n di sc l o s ed in c om e w a s d e ri v ed a n d th a t th e a ppl ic a n t h a d fu rn i sh ed his r etu r n of i nc o m e and th a t the a dd it i on a l tax pa y ab l e on s u ch in c om e e x c e ed s th e s p e ci fi ed a m ou nt . Th i s w a s th e p o siti on p ri o r t o F in a n ce A ct of 2 00 7 . H ow e v er , s e cti on 2 45 C (1 A) in t e r a li a p ro v id e s t h a t a d di ti on a l a m ou nt of i n c om e ta x pa ya bl e in respect of th e income d i s c l o s ed shall be ca l cul a t ed in a c c o rda n c e wi th th e p r ov is io n s o f s e c ti on 2 45 C (1 B ). Un d e r su b -s e c ti on ( 1 B) i f t h e a p p li ca n t h a s fu rn is h ed h is r etu rn i n r e sp e ct o f h i s t o ta l in c o me a n d n o a s se ss m en t i s ma d e , th e ta x s ha l l b e c a l cu la t ed on t he a gg r ega te of th e tot a l in c om e r e tu rn ed a n d t h e i n c om e di s cl o s ed in th e a p pli ca ti on a s if su ch agg r eg a t e wa s th e t ot a l in c o me . Th e w o rd s " r e g ul a r as s e ss m en t " a r e n ot t h e r e i n s e c ti on 2 45 C (1 B )( ii ) . H o w e v er , u nd e r sec t i on 2 4 5C ( 1C ) (b ), i t i s p r ov i d e d t h a t th e a dd i t i on a l t a x 39 ITA Nos. 1253 & 1254/Del/2021 Maharashtra Feeds P Ltd.
ca l cul a t ed un d e r s e c ti on 24 5 C( 1 B) ( i i) sh a l l b e r ed u c ed b y t h e agg r ega t e o f t h e t a x d ed u ct ed a t s ou r c e o r t a x p a id i n a d va n c e an d t h e a m ou nt o f ta x p a i d u nd e r s e c t ion 1 4 0A . Th e r e s u lta n t am oun t is the a dd it i on a l tax payable by the a ss e s se e . Th u s, s ec ti on 2 4 5C in c or p o ra t e s w i th i n it the p r ovi si o n s of C hap t e r s XV I I B , X V I I C a n d s ec ti on 14 0 A of th e A ct . It m a y b e n ot ed th at sec ti on 2 45 C (1 B )( iii ) , a s it st o od b e f o r e 1 .6 . 1 98 7 , r equ i r e d in c om e ta x t o b e c a l cu la te d on t h e a g g r eg a t e o f t h e to t al in c o m e as a s s e s s ed pl u s the i n c om e di sc l o s ed in th e app li ca ti on a s if s u c h agg r ega t e w a s t h e t ot a l i n co m e. B ut a ft e r 1 .6 .1 9 87 , th e ta x i s r eq ui r e d t o b e w o rk ed ou t on t h e r et urn ed to t al in co m e p lu s t he i n com e di s cl o s e d i n t h e a p p li ca t i o n a s i f th e agg r egat e i s t h e t ot a l i n c om e . Un d e r sec t i on 2 45 D ( 2 A) t h e app li ca nt i s r equ i r e d t o pa y th e a d d i ti o n a l a m ou n t o f i nc o m e t a x pa y ab l e on t h e in c om e di s cl o s ed i n t h e a pp li ca t i on w i th in 3 5 da y s o f th e r ec e ip t o f t h e cop y of t h e o rd e r pa s s ed b y t h e Set tl em en t C omm i s s i on u n d e r s e ct i on 2 4 5 D( 1 ) a l l ow i ng s u ch app li ca ti on t o b e p r o c e ed ed w i th . U nd e r se cti on 2 4 5D ( 2A ) t h e app li ca nt sh a ll , w i t hi n 35 days of t he r e c eip t of th e o rd e r u nd e r sec t i on 2 4 5D ( 1 ) a ll o w in g th e a p p lic a t i on t o b e p r o c e ed ed w it h , pa y t h e a d di t i on a l a m ou n t o f in c om e t a x p a y a b l e o n th e in c om e d is c l o s ed . U nd e r s ec t i on 2 45 D ( 4) on c om pl ia n c e o f s e ct i on s 2 4 5 D( 2 A) a n d (2 C ) a n d on e xa m i na t i on o f r el e va n t r e c or ds and r ep o rt s , t h e S ett l e m ent C o mm i s si on m a y p a s s su ch o rd e r s a s i t t hi n k s f it on t h e ma t te r s c o v er e d b y th e a pp li c a ti on an d an y ot h e r ma t t e r r el a ti ng t o th e " c a s e" r efe r r ed t o i n th e r ep o rt of th e C o m mi s si on e r of I n co m e T ax . I f on e ca r e fu ll y an a l y s e s th e p r o v i si on s o f s e cti on s 2 4 5D ( 1 ) a n d 2 45 D ( 4) , on e fin d s t w o d i s ti n ct s ta g es - on e a l l o wi n g th e a p pli ca ti on to b e pr o c e ed ed w i th ( o r r ej e ct ed) a nd th e ot h e r o f di sp o sa l o f t h e app li ca ti on by a p p r op ri a t e o rd e r s bei ng p a ss ed by the Set tl em en t C o mm i s s i on . I n b et w e en t h e t w o st a g es , w e h a v e pr o v i si on s wh i ch r equ i r e th e a pp li ca nt t o p a y th e a d d it io na l in c om e t ax and i n te r e s t . E v en u nd e r s e ct i on 2 45 D ( 7) it is 40 ITA Nos. 1253 & 1254/Del/2021 Maharashtra Feeds P Ltd.
pr o v id ed th a t w h e r e th e set tl em en t b e c om e s vo id un d er s e cti on 2 45 D ( 6) th e p r oc e e di ng s w it h r e sp e ct t o t h e m a tt e r s c o v e r ed b y th e s e tt l em en t sh a l l b e d e e m ed t o h a v e r e vi v ed f r om th e st a g e at w hi ch t h e a p p li c a ti on w a s a l l o w ed t o b e pr o c e ed e d w i t h b y th e S et t l em en t C o mm i s si on a nd th e i nc om e ta x a u th o ri t y m a y c omp l et e th e p r o c e ed i n g s w it h in th e p e ri od m en ti on ed t h e r ei n . Th u s, s ec ti on 2 4 5 D( 7 ) b ri n gs ou t th e di ffe r en c e b et w e en s e c ti on 2 45 D ( 1) st a g e a n d s ec ti on 2 4 5 D ( 4 ) st a g e . Un d e r s e c ti on 2 45 D ( 6) , it is l a id down th a t e v e ry o rd e r un d e r s e c ti on 2 45 D ( 4) sh a ll p r ov i d e fo r t h e T er m s o f S et tl e m en t i n c lu d in g a n y de m a n d b y wa y o f t a x , p e na l t y o r in t e r e st . In th e ca s e o f C. I. T . v. D a m a ni B r oth e r s r ep o rt ed i n 2 5 9 I T R 47 5 , a 3 - Ju d g e B e nc h o f th i s C ou rt , w h il e a na l y z in g th e s ch e m e o f C h a pt e r X I X- A, h a s h el d t h a t s e ct i o n 2 34 B , se ct i on 2 45 D (2 C ) a n d s e cti on 2 45 D ( 6A ) op e ra t e i n d i ff e r en t fi eld s . S e ct i on 2 34 B c om e s i n t o op e ra ti on w h en t h e r e i s d ef a ul t in p a y m en t of a dv a n c e ta x w h er e a s li ab i li t y t o pa y i nt e r e s t un d e r s e c ti on 2 4 5D ( 2C ) a ri s e s w h en th e add i ti ona l a m ou n t of i n c om e t a x i s n ot p a i d w it hi n ti m e sp e cif i ed un d e r s e c ti on 2 45 D ( 2A ). S e ct i on 24 5 D (6 A ), on th e o th e r h a nd , i m p o s e s lia b i lit y t o p a y i nt e r es t on l y w h e n t h e ta x pa y a bl e in p u r s u a n ce of a n o rd e r o f S e tt l em en t C om m i s si on u nd e r sec t i on 24 5 D (4 ) i s n ot ma d e wi t hi n t h e s p ec i fi e d t im e. C o n se q u en tl y , s ec t i on 23 4 B , s e ct i on 2 4 5 D (2 C ) a n d s e c ti on 2 45 D ( 6A ) in C h a p t e r X I X- A op e r a t e in d i f f er e n t fi e l d s. To t hi s e xt en t , we agree with the view e xp r e ss e d in D a ma n i Br ot h er s ca s e ( s up ra ) . D e s c ri pti v el y, it can be s ta t e d that as s e ss m en t in law is di ff e r en t f r om a s ses s m en t by way of s ett l e m ent . I f on e r ea d s s ec ti on 24 5 D ( 6) wi th s ect i on 2 4 5I, i t be c om e s cl ea r t ha t ev e r y or d e r of s et t l em ent p a s s ed u nd e r sec t i on 24 5 D ( 4) sh a ll b e fi na l a n d c on c lu si v e a s t o t h e ma t t e r s c on ta in ed t h e r ei n a nd th a t th e sa m e sh a l l n ot b e r e- op en ed e x c ept in th e case of f ra u d and m i s r ep r e s en t a ti on . Un d e r s e cti on 2 4 5F (1 ) , i n a d dit i on t o t he p o w e r s c on fe r r ed on th e S e tt l em en t C o mm i s si on u nd e r C h a pt e r XI X -A , it sh a l l a l s o 41 ITA Nos. 1253 & 1254/Del/2021 Maharashtra Feeds P Ltd.
h av e a l l t h e p o w e rs w h i ch a r e v e st ed in t he in c om e t a x a ut h o rit y u nd e r t h e A c t. I n t h is c on n e ct i on, h o w e v er , w e n e ed t o k e ep i n mi nd th e di f fe r en c e b et w e en " p ro c edu r e fo r a s s e s sm en t " un de r C hap t e r X IV a n d " p r o c ed u r e f o r s et tl e men t " un d e r C h a p t e r XI X- A ( se e s e cti on 2 45 D ) . U nd e r se ct i on 24 5 F( 4 ) , it i s cl a ri fi ed th a t n oth i n g i n Ch a pt e r X I X- A s h a l l a f fec t t h e o p e ra t i on of a n y ot h er pr o v i si on of t h e A c t r eq ui r i ng t h e a p p l ic a nt t o pa y ta x o n t h e ba s i s of s el f- a s s e s s m en t in r el a ti on to m a tt e rs before the Set tl em en t C om m i s s i on . Th e p oin t t o be n ot e d on th e b a s i s of th e a bo v e a n a l y si s is th a t s e v e ra l p r ov i si on s of the A ct li k e se c ti on 14 0 A; fu rn i sh in g of t h e r et u rn of i n com e b y t h e app li ca nt a s in di ca t ed i n t h e p r ov i s o ( a ) t o s ec ti on 2 4 5C ( 1 ); pr o v i si on s of th e A c t g o v e rni ng l ia bil it y a n d c ompu t a ti on t o p a y add it i on al in c om e t a x a s i n d i ca t ed b y p r ovi s o ( b) to s e cti on 2 45 C (1 ); agg r ega t i on of t ota l i nc o m e i nt e r a li a in t e rm s o f s e ct i on s 1 4 3 , 1 44 o r 14 7 as in di ca t e d b y s e cti on 2 45 C (1 B )( iii ) ; a gg r eg a t i on of t ot a l i n c om e as r e tu r n ed p lu s in c om e d i sc l os e d in th e a p pl i ca t i on f o r s et t l em en t a s in d i ca t e d in s ec t i on 2 45 C ( 1 B ) (i i); the d e du c ti o n s i n s e c ti on 24 5 C (1 C ); in c r ea s e of i n t e r e s t u nd e r s e ct io n 2 15 ( 3) p u r su a n t t o th e o rd e r s of th e S et t l em en t C om mi s si on and th e levy of i n t e r e st u nd e r sec t i on s 2 3 4 A ( 4) a nd 23 4 B( 4 ) a ll b rin g in t o C h a p t e r X IX -A va ri ou s p r o v is i ons o f t h e A ct . Th u s, w h e n w e r ea d t he p r ovi si on s o f S e ct i on s 2 4 5 C a n d 2 45 D on e has to k e ep in m i nd v a ri ou s ab ov e p r o vi si on s o f t he A ct a nd th e c o n c ept s of s el f- a s s e ss men t , as s e ss m en t , r eg ul a r a ss e s sm en t and c o m pu ta t i on of tot a l in c om e wh i ch have b ee n en g ra ft ed in C h a pt e r X I X- A. ( I) Wh et h e r S e cti on s 2 3 4 A , 2 34 B a nd 23 4 C a r e a pp l i c a bl e to C hap t e r X I X- A p r o c e edi ng s ?
1 1. Ou r d et a il ed a n a ly s i s sh ow s th a t t h ou gh C ha p t er X I X- A i s a s el f- con t ain e d C od e , the p r o c ed u r e to be f oll o w ed by th e Set tl em en t C o mm i s s i on u n d er s e ct i on s 2 45 C a nd 2 4 5 D i n th e ma t t e r o f c om pu ta t io n o f un d is cl o s ed i n c om e; i n t h e m a tt e r o f c omp u t ati on o f a d d iti o n a l in co m e t a x p a y a bl e on su c h in c om e 42 ITA Nos. 1253 & 1254/Del/2021 Maharashtra Feeds P Ltd.
w it h in t e r e st th e r e on ; the fi l i ng of s et tl em en t a p pli c a ti on in di c ati ng the a m o un t of i nc o m e r et u rn ed in th e r et u r n of in c om e an d th e a d d i ti on a l in c o m e ta x pa ya bl e on the u nd is cl o s ed in c om e to b e a gg r eg a t ed a s t ota l i n c om e sh ow s th a t C hap t e r X I X- A i n d i ca te s a gg r eg a t i on of incomes so as to c ons t it ut e t ot a l i n c om e w h ic h in di ca t e s t ha t the s pe ci a l pr o c ed u r e under C h a pt e r XI X -A ha s in bu i lt m e c ha n i sm of c omp u t in g t ota l i n c om e which is n oth i n g bu t a s s es sm en t ( c om pu ta t i o n of t ot a l i n c om e) . To e la b o ra t e , u nd e r sec t i on 24 5 C( 1 B) , i f t h e a pp l i c a n t h a s fu rni sh ed a r etu rn in r es p e ct of h i s t ot a l i n c om e , t a x s h a ll b e c a l cul a t ed on t h e agg r ega t e o f t ot a l i n c om e r et u rn ed a n d t h e i n c om e d is c l o s ed i n th e s et t l em ent a p pl ic a ti on as if suc h a gg r ega t e were tot a l in c om e . U nd e r t he Ac t , ta x i s p a y a b l e on t h e t ota l i nc o m e a s c omp u t ed in a cc o rd a nc e w it h the p r o vi si on s of th e Act. Th u s, s ec ti on 1 43 ( 3) p r o vi si on is s ou g ht to be in c or p o ra t e d in s ec t i on 2 45 C . W hen P a r l ia m ent u s e s th e w o r d s " a s i f s u ch agg r ega t e w oul d c o ns t itu t e t ot a l i n c o me " , i t p r e s u pp o s e s th a t u nd e r t h e s pe c i a l p r o c edu r e th e a g g r eg a ti on of th e re t u rn ed in c om e p lu s in c om e di s cl os e d w ou ld r e su lt i n c o mp ut a t i on of to t al in c om e w h i c h i s t h e ba s i s f o r t he l e v y of t a x o n t h e u nd is cl o s ed in c om e w h i ch is n oth i ng bu t " a s s e s sm ent " . Si mi l a rl y , se c t io n 2 4 5C ( 1C ) p r o vi d e s fo r d e du ct i on s from the to t al i n c o m e c omp u ted in t e rm s o f s e ct ion 2 4 5 C( 1 B) . Th u s, t h e sp e c ia l p r oce d u r e u nd e r s ec ti on s 24 5 C a n d 2 4 5D in C h a pt e r X IX- A sh o w s t ha t a s p e c ia l t y p e of c o m pu t a t i on of t ota l i n co me i s eng ra ft e d i n t h e s a i d p r o v i si on s w h i c h i s no th in g b ut a s s e s sm en t w hi ch t ak e s p la c e a t se ct i on 2 4 5D ( 1) s ta g e . H ow e v er , i n th a t c omp u t ati on , on e fi n ds t h a t p r o v i si on s de a lin g w i t h a r e gu la r as s e ss m en t , s el f- a s s e s s m en t a nd l e vy and com pu t a ti on of in t e r e st f o r d efa u lt in pa y m ent of a dv an c e ta x, e tc . are eng ra ft e d. [S e e se c t i on s 2 45 C (1 B ), 2 45 C (1 C ) , 2 4 5D ( 6 ) , 2 45 F (3 ) i n add it i on t o se c t ion s 2 15 (3 ) , 2 3 4 A( 4) a n d 2 34 B( 4 )] ( I I ) T e r mi na l p oin t f o r th e l e vy o f 43 ITA Nos. 1253 & 1254/Del/2021 Maharashtra Feeds P Ltd.
in t e r e st - W h eth e r i n t e r e st i s pa ya b l e u n de r C ha pt e r X IX - A u p t o th e d a t e o f t h e o rd e r un d e r s ec ti on 2 4 5 D ( 1) o r u p t o th e d a t e of th e o rd e r un d e r s e c ti on 2 4 5D ( 4 ) ?
1 2. I n ou r v i e w t h e a ns w e r t o t h e a b ov e qu e s ti on li es i n t h e pr o v i si on s of t he p r o vi s o to S e c ti on s 24 5 C (1 ) , 2 45 C (1 B ) a n d 2 4 5 C ( 1 C ) , 2 45 D ( 4) a nd 2 45 F( 3 ) w h i c h b ri n g in th e c on c ep t s of r et urn ed in c om e , s el f- a s s e ss m ent , a g g r eg a ti on o f i n c om e r et u rn e d a n d i n com e d i s c lo s e d a s i f it i s t o t a l in c om e ; le v y o f i n t er e s t un d e r s e c ti on 2 1 5 ( 3 ) r e a d w i th se c ti on 2 4 5 D ( 4 ); in c r ea s e of i n t e r es t u nd e r s ect i on s 2 3 4 A( 4 ) a nd 23 4 B( 4 ) r ea d w it h s e ct i on 2 4 5 D ( 4 ) as a l s o s e ct i on s 1 40 A( 1 A) a nd (1 B ) r ea d w it h s e ct i on s 2 34 A a nd 2 3 4 B. F o r e xa m pl e , s e c ti on 1 4 0A de a l s w it h s el f -a s s e s s m en t w hi ch is d iffe r en t f r om r e gu la r as s e ss m en t . Un d e r s ec ti on 1 4 0A ( 1) wh e r e t a x i s p a y a b l e on t h e ba s i s o f an y r et u rn fu rni s h ed by th e a s s e s s e e [ s e e p r ovi s o ( a ) t o s e ct i on 2 4 5 C ( 1) ] , a f t e r t a k i n g i n to a cc ou nt t a x pa i d, t h e as s e ss e e s ha l l b e li a bl e t o p a y su c h t a x w it h i nt e r e st p a ya b l e fo r de fa u lt u n d er s e c ti on 2 34 B i n p a y m en t of a d va n c e ta x b e for e fu rn i sh in g the r et u rn . Th is p os i ti on is cl a ri fi ed b y se c t i on s 1 40 A( 1 A) and (1 B ) u n de r w h i c h in t e r a lia in t e r e st p a y a b l e f o r de fa u lt in pa ym e n t of a d v a n c e ta x u n de r s ec t i on 2 3 4 A sh a l l b e c omp u t ed on t h e a m oun t of t a x on t h e t ot a l in c om e a s d e cla r ed in th e r et u rn m in us th e advance tax p a id . S i m il a r ly , it is cla ri fi e d vide su b- s ec t i on ( 1B ) t o s e ct i on 1 4 0 A th a t i n te r e st pa y ab l e u n d e r s e c ti on 23 4 B f o r d e fa u l t i n p a ym en t of a d va n c e ta x sh all b e c om pu t ed on a n a m ou nt e qu a l t o t h e a ss e s s e d t a x [ sa m e wo r ds a r e u s ed i n s e c ti on 2 3 4 B ( 1) ] o r on th e a m ou n t b y w hi ch t h e ad v a n c e t a x f a ll s sh o rt o f th e a s s e ss ed t a x. H ow e v er , w hat is " as s e s s ed tax" for the p u r po s e s o f s e ct i on 1 4 0A is e xpl a in ed b y Ex p la n a ti on . I t sa ys th a t a s se ss e d ta x w i ll b e t a x on th e t ot a l in c om e a s d e c l a r e d in t h e r etu rn m i nu s th e a m oun t o f t a x d e d uc t ed a t s ou rc e o r c ol l ec t ed a t s ou rce in a c c o r da n c e w it h th e p r ov i s i o n s of C h a pt e r X VI I ( wh i ch c o v er s s ec t ion s 44 ITA Nos. 1253 & 1254/Del/2021 Maharashtra Feeds P Ltd.
2 07 , 20 9 an d 2 1 5 of t h e A ct ). N o w , s ec t ion 24 5 C (1 ) i s v ol u nt a ry di s cl o su r e by the a s s es s e e of his un di s cl o s ed in c om e . Un d e r s e cti on 24 5 C (1 ), th e a ss e s se e has to m ent i on in hi s s ett l e m ent a ppl i c a t i on th e a d d iti on a l a m oun t of ta x p a y a b l e b y h im on su ch un d i s cl o s ed in c o m e. U nd e r p r o vi s o (a ) , the app li ca ti on for s et tle m en t s h a ll not be en t e rt a i n ed till the as s e ss e e has fu rn i s h ed th e r etu rn of i n co m e wh i ch he was r equ i r e d t o fi l e un d e r t h e A c t t o th e e x ten t of h i s i nc o m e. U nd e r pr o v i s o ( b ) , t h e a s s es s e e ha s to d e c l a r e t h e a dd it io na l a m oun t o f t ax p a y abl e . Thu s , th e t w o p r o vi so s t o s e c ti on 2 45 C (1 ) s h o w th a t C ha pt e r X I X- A , wh i ch p r e s cri b es a s p e cia l p r o c edu r e f o r as s e ss m en t by s e t tl em en t , c on t em pl a t es a pr e - a s se s s men t c oll e ct i on of t a x . W it h th e fi l in g o f t h e s et t l em ent a p pli ca t i o n an d aft e r suc h a p pl ic a t i on is a ll ow e d to b e p r o c e ed ed w it h u nd e r sec t i on 2 4 5D ( 1 ), i n t im a t i on u nd e r s e ct i on 1 4 3 (1 ) , r e gu la r as s e ss m en t u nd e r s e c ti on s 1 43 ( 3) / 14 4 a nd r e- a s s e s s m en t u nd e r sec t i on 14 7 lo s e th ei r ex i s t e n c e as u nd e r s e c t ion s 2 45 C (1 A) an d ( 1 B) it i s on l y t h e in c o m e d i s cl os e d in th e r etu rn o f in c om e b e f o r e t h e A . O . a l on e w hi ch su rv iv e s f or c on si d e ra t i on by th e S et tl e m en t C om m i ss i on f o r s et t l i n g th e a m o u nt o f i n c om e w hi ch is n ot d i s c l o s ed in t h e r et u rn . Un de r s ec t i on 2 4 5 C ( 1 B ) (i i) , if th e ap pl i ca nt h a s fu rni s h ed a r etu r n i n r e sp e ct o f th e to t a l in c om e , w h eth e r o r n ot a ss e s s m en t i s ma d e i n pu r su a n c e o f t h e r etu rn , t h e a dd it i on a l a m oun t o f i nc o m e t a x pa ya b l e in r e s p e ct o f t h e t ot a l in c o me d i sc l os e d sha l l b e on t h e a gg r eg a t e o f t h e to t al i n c om e r et u rn ed and the in c om e d is cl o s ed in hi s app li ca ti on f o r s et t l e m en t a s if su c h a g g r ega t e wa s hi s tot a l in c om e . Th i s i s p r e- a s se s s m en t c oll e ct i on of t a x. S u ch p r e- as s e ss m en t i s ba s e d on th e e st i m a ti o n of t h e cu r r en t in c om e an d t ax t h e r e on by the a pp li ca nt h im s e l f . Now, when the Set tl em en t C o m mi s si on a c c ep t s t h e V olu nt a ry D i sc l o su r e vid e th e a ppl i c at i on f o r s ett l e m en t , s e ct i o n 2 34 B( 2 ) s t ep s in . It i s im p o rtan t to remember that the a s s es s e e is liable to pay adv an c e ta x, h e c o m mi t s d e fa u l t i n p a y m en t t o t h e e xt en t o f th e 45 ITA Nos. 1253 & 1254/Del/2021 Maharashtra Feeds P Ltd.
u nd is cl o s ed in c om e bu t h e off e r s t o p a y a d di ti ona l i n c om e t a x th en in t er e st h a s t o b e c a l cu l a t ed i n a cc o rd a n ce w it h s e c t ion s 2 07 , 20 8 an d 2 3 4 B( 2 ) u p t o th e d a t e o n w hi ch su c h t a x i s p a id . Th i s is n ot the i nt e r e st w hi c h a s s e ss e e has to pay a ft e r as s e ss m en t un d e r s ect i on 2 45 D ( 4) . Un d e r s e ct i on s 2 45 C (1 B ) a n d ( 1C ) th e a dd i t i on a l a m ou n t o f in c om e t a x p a ya bl e on th e u nd i s c l o se d in c o m e sh a ll b e on th e t ota l i n co m e a s ca l cul a t ed u n d e r s e ct i on 24 5 C( 1 B) . On c om pu ta ti on of tot a l in c om e u n d er s e ct i o ns 24 5 C( 1 B) a n d (1 C ), in t e re st fol l o ws such c omp u t ati on . It is i mp o rt a n t to n ot e th a t in t e r e st f o l lo w s c omp u t ati on of t ot a l in c o m e. On c e s uc h c omp u ta t i on t a k es p la c e u nd e r sec t i on 2 4 5C ( 1B ) t h en se ct io n 2 3 4B ( 2) a pp li es . Th e sa i d sub - s e c ti on de a l s w i th th e si tu a ti on w h e r e b e f o r e d et e r m in a t i on of t ot al in c o m e u n de r s ec t i on 1 43 ( 1 ) o r 1 4 3 (3 ) tax is paid u nd e r sec t i on 1 40 A o r o t h e rwi s e in t e r e st s h a ll b e ca l c ul a t ed i n ac c o rdan c e w i th s e c t ion 2 3 4 B( 1 ) u p t o th e da t e on w h ich t a x i s s o pai d. I n t ha t s en s e a n a p pl i ca t i on u nd e r s ec t i on 2 45 C (1 ) i s a r etu rn . S ec ti on 2 4 5 C ( 1) d ea l s w ith c om pu t a ti on o f t ota l in c om e . Th e r e is on e m or e w a y o f l o oki ng a t th e A ct . Ch a p t e r XIX- A r e fe r s to p ro c ed ur e of se t tl em en t ( s e e s e c ti on 2 4 5D ( 1) ) . As stat e d a b o v e , s e ct i o n 2 4 5D ( 1 ) p r ovi d es f or e xp e di ti ou s r e co v er y o f t a x b y w a y o f p r e- a s s e s s m en t col l e c t ion . In t e r est on d e fa u lt in p a y m en t of ad v a n c e ta x co m e s un d er sec t i on s 2 34 A , 2 3 4 B , 2 3 4 C , w hi ch f a l l i n Ch a p t e r X VII wh i ch d e a l s w it h c oll e ct i on a n d r e c o v er y o f t a x . I t i s i mp o rta n t t o n ot e th a t in t e r e st f ol l o ws c o mpu ta ti on of a dd iti on a l pa ym en t of i n c om e ta x u nd e r se c ti on s 2 45 C (1 B ) a n d (1 C ). Th is is h ow se c t i on s 2 34 A , 2 3 4 B a nd 23 4 C g et eng ra ft ed in t o Ch a p t e r X IX- A a t t h e stag e of s ec t i on 2 4 5D ( 1) . As st a t ed , t il l the S et t l em en t C o mm is si on d ec i d e s to a d mi t the ca s e un d e r s e cti on 2 45 D ( 1) th e p r o c e e di ng s u nd e r th e n o rm a l p r ovi si on s r em a in op en . B u t, o nc e t h e C omm is si on a d m i t s t h e c a s e a f t e r bei ng sa t i sfi ed t h a t th e d i s c l os u r e is f u ll and t ru e then the pr o c e ed in g s c om m e n c e wi th t h e S e tt l e men t C om mi ss i on . I n t h e 46 ITA Nos. 1253 & 1254/Del/2021 Maharashtra Feeds P Ltd.
me an t i m e, a pp li ca n t h a s t o p a y th e a dd it i on a l a m ou n t o f ta x w it h i nt e r e st w i th ou t wh i ch th e a p p l ic a t ion f or s ett le m ent w o u ld n ot b e m a in ta in a bl e . Th u s, i n t er e s t u n d e r s e cti on 2 3 4 B w ou ld b e pa y ab l e up to th e st a g e o f se c t io n 24 5 D (1 ) . Our vi e w is sup p o rt e d by th e a m end m en t made by F in a n c e Act of 20 0 7 w . e .f . 1 .6 .2 0 07 in wh i ch i nt e r e st i s r equ ir e d t o b e p a id fo r ma i nt a i na b il it y o f t h e A pp li ca t i on fo r S e tt l em en t .
1 3. T h e qu est i on i s - w ha t h a pp en s i n c a se s w h e r e 9 0 % o f t h e as s e ss e d t a x i s p a id bu t on t h e ba s i s o f t h e C om mi s si on ' s o rd e r u nd e r sec t i on 2 4 5 D ( 4 ) t h e a d v a n c e t a x pa i d tu rn s o u t t o b e l e ss th a n 9 0 % o f t h e a s s e s s ed t a x a s d e f in e d in th e Ex p la n a ti on to S e cti on 2 3 4B ( 1) ?
1 4. As h eld h e r ein a b ov e , un d e r s e c ti on 2 4 5 C( 1 ) r ea d w it h s e ct i on 2 4 5 C ( 1B )( ii ) a n d s e cti o n 2 4 5 C( 1 C) (b ) , the add it i on al a m oun t o f in c o m e t a x p a y a b l e i s t o b e ca l cul a t e d on th e a g g r eg at e o f t ot a l in c om e r e t u rn ed a n d t h e in c om e d is c lo s ed in t h e s ett l e m en t a pp li ca t i on a s i f s u ch a g g r e ga t e i s th e t ot a l in c om e . Th u s , th e s c h e m e o f th e s a id s e c ti on s i s b a s e d on c omp u t ati on of t o ta l i n c om e and in th a t s en s e we have stat e d t hat su ch a p pli c a ti on f o r s ett l e m ent i s a k i n t o a r et u rn of in c om e . T h e s a i d p r ov is io n d e a l s wi th " t ot a l i n c om e " . T hu s , a s stat e d ab ov e , s e ct i on s 2 34 A , B a n d C a r e a ppl ic a b l e u p to t h e stag e o f s e c ti on 2 4 5D ( 1) o rd e r p a s s ed by th e S e t tl em en t C o mm is si on . H o w e v er , P a r l ia m ent has n ot e xt en d e d th e pr o v i si on s an d th e l ia b il it y t o p a y in t e r e st b e y on d t h e d a te o f app li ca ti on for s ett l em ent . Thi s is th e p os i ti on e v en aft e r F in an ce A c t o f 20 0 7 . O n c e th i s p o si ti on i s t a k en , s e cti on 1 40 A i s at t ra ct e d. W h en an a ss e s se e has p a id i n te r e s t u nd e r sec t i on s 23 4 A, B a n d C i n s el f- a s s e ss m en t un d e r s e c ti on 1 40 A , w hi ch i s si m ila r t o th e s c h em e o f s e ct i on 2 4 5 C ( 1) , a n d on c e th e S et tl e m e nt C om mi ss i on a d mi t s th e a ppl ic a t i o n for s ett l e m ent , on e fin d s th a t e v en un d e r s ec ti on 14 0 A( 1 B) in te r e st pa y ab l e un d e r s e c ti on 2 34 B h a s t o b e c omp u t ed on a n a m oun t 47 ITA Nos. 1253 & 1254/Del/2021 Maharashtra Feeds P Ltd.
equ a l t o t h e a s s e s s ed t a x a s d efi n ed in t h e Ex pl a n a ti on t o m e a n ta x on th e t ot a l i n c om e a s d ec la r ed i n th e r et ur n . U nd e r su b- s ect i on (1B) t o S e c ti on 1 4 0 A i n t e r es t pa ya b l e un d e r s e cti on 2 34 B can al s o b e c o mpu t ed on a n a m ou n t b y wh i ch th e a dv a n c e ta x p a id f all s short of th e a s s e ss e d ta x as d ef in ed in the E xp l a na t i on th er e t o . Th u s , th e r e i s n o p r o v i si on u n d e r C h a pt e r XI X - A or e v en un d e r s e c ti on 1 4 0A (d ea l i ng w it h s el f- as s e ss m en t) t o c h a rg e in t e r est b ey on d th e da t e of a p pl ic a ti on f or s et tl e m en t a ft e r t h e sa m e i s a d m i tt ed b y th e C o m m i s si on u nd e r S e cti on 2 4 5D (1 ). Mo r e o v e r, a s s ta t e d a b o ve , un d e r t h e Ac t , th er e i s a di ffe r en c e b e t w e en a s s e s sm ent in la w [ r e gu la r as s e ss m en t or a s s e ss m ent un d e r s e c ti on 1 43 ( 1) ] and as s e ss m en t by s et tl e m en t u nd e r Ch a p te r X IX- A. Th e o rd e r u nd e r sec t i on 2 4 5D ( 4 ) i s n ot a n o rd e r o f r egu l a r a s se s sm en t . I t is n eit h e r an o rd e r un d e r sec t i on 14 3 (1 ) or 1 43 ( 3) or 144. Un d e r s e cti on s 1 3 9 to 1 5 8, th e p r o c e s s o f a s s e ss m ent i nv ol v es th e fi l in g o f th e r e t urn u n d e r s e c ti on 1 3 9 o r u n d e r s e ct i on 1 42 ; in qu i ry b y th e A . O . u n d er s e ct i on s 14 2 a n d 14 3 a n d m a k i ng o f th e o rd e r o f a ss e s sm ent b y t h e A. O . u nd e r s ect i on 14 3 (3 ) o r u nd e r sec t i on 1 4 4 a n d i s su in g o f n oti c e of d ema n d un d e r s e c ti on 1 56 o n t h e ba s i s o f t h e a s s es sm e n t o rd e r . Th e m a k in g o f t h e o rd e r of a s s e ss m e nt is an in t eg r a l pa rt of the process of as s e ss m en t . N o s uc h st ep s a r e r equ i r e d t o b e f oll o w ed i n t h e ca s e of pr o c e ed in g s u nd e r C ha p t e r X IX -A . T h e s a id C h a pt e r c ont em plat e s the ta xa bil it y d et e r m in ed w it h r es p e ct to u nd is cl o s ed i nc o m e on l y by the p r o c e ss of s ett l e m en t/ ar b it rat i on . Th u s, the na t u r e of th e o rd e r s u nd e r sec t i on s 1 4 3( 1 ), 1 4 3 ( 3) a n d 14 4 is d i ff e r ent from the o rd e r s o f t h e S ett le m ent C om m i s s i on u nd e r se c t io n 24 5 D (4 ) . E v en i n C om mi ss i on e r of I n c o m e T a x v . An ju m M . H . Gh a sw a l a an d oth e rs [ 2 52 I T R 1] t h e re is n o fi nd i n g b y t hi s C ou r t th a t t h e o rd e r o f S ett l e m en t C o m mi s si on u n d e r s e cti on 2 45 D (4 ) i s a n o rd e r of as s e s s m e n t u nd e r s e cti on 1 4 3( 3 ) o r un d er s e c ti on 1 44 . I n Gh a s w a la ' s c a s e th e onl y qu es ti on d e ci d e d by t hi s C o u r t 48 ITA Nos. 1253 & 1254/Del/2021 Maharashtra Feeds P Ltd.
is t h at th e i nt e r es t un d e r s e c ti on 2 3 4 B i s m a nd a t o ry i n n a tu r e an d t h at S e tt l em en t C om mi ss i o n , th e r ef o r e, h a d n o a ut h o ri t y t o w ai v e i t. Fu rt he r , a s st a t ed a b o v e , t h e ju ri sdi c t i o n o f th e A . O. i s n ot f ett e r e d m e r e ly b e ca u s e the a pp li ca n t has fi l ed the Set tl em en t A p pl i c a t ion . Th e A ct d o e s n ot co nt emp la t e s t a y of th e p r o c e edi ng s du rin g t h a t p e ri od , i . e ., w h en t h e S et tl e men t C o mm is si on is d e ci di n g w h et h e r to p r oc e e d or r ej e c t the s ett l e m ent a pp li c a ti on . Th e ju ri sd i ct i on of th e S et tl e men t C o mm is si on t o p ro c e ed c o m m en c e s on l y a ft e r a n or d e r i s p a s sed u nd e r sec t i on 2 45 D ( 1) . T h a t , a ft e r m a k in g a n a pp li ca t i o n f o r s ett l e m ent th e a pp li ca n t is n ot a l l ow ed to w it hd r a w it [ s e e s e ct i on 2 4 5 C( 3 )] . On c e th e case sta n ds a d mi tt ed , the Set tl em en t C om m i s s i on sh a l l ha v e ex c lu s i v e j ur is di ct i on to e x e rci s e t h e p o w e rs of t h e I n co m e T a x Au th o ri ty . Th e o rd e r of Set tl em en t C o m mi s si on u n d e r s e ct i on 2 45 D ( 4) sh a l l b e f in a l a n d c onc l u siv e u n d e r s e ct i on 2 4 5I s ub j e ct to two qu a l i fic a t i on s u nd e r wh i ch it c a n b e r e ca ll ed , v iz ., f r a u d a n d m i s r ep r e s en t a ti on bu t e v en h er e it is im p o rt a n t to n ot e t ha t un d e r s ec ti on 2 45 D ( 7) wh e r e th e s ett l e m en t b e c om e s v oid on a c cou n t o f fra u d an d mi s r ep r e s ent a t ion the p r o c e edin g s with r e sp e ct to the ma t t e r s c o v e r ed b y t h e s et tl em en t sh a ll b e d e em e d t o h a v e be en r e v iv e d f r om th e st a g e at wh i ch the a p pl i ca t io n was all ow ed t o b e p r o c e ed ed w it h b y th e S et tl e m en t C om mi s si on . Th i s fu rth e r su p p or t s ou r v i e w t h a t t h e r e a r e t w o d is ti n ct s t a g es u nd e r C hap t e r XI X- A a nd th a t t he L egi s la tu r e has n ot c ont em plat e d t h e l e vy o f i nt e r e s t b et w ee n or d e r un d e r s e c ti on 2 45 D ( 1) st a g e a n d s ec ti on 245D(4) stage. T hu s , in te r e st u nd e r sec t i on 23 4 B w i ll be ch a rg ea b l e ti ll th e o rd e r of th e Set tl em en t C om mi s si on u nd e r s ect i on 2 45 D ( 1) , i . e . , a d m i s si on of the case. La s t ly , the e xp r e ss i o n "i nt e r e st " i n s e c ti on 2 45 (6 A ) f ast en s th e li a bi li ty t o p a y in t e r e st on ly wh en th e t a x pa y ab l e in pu r s u a n c e of a n o rd e r u n d e r s e ct i on 2 4 5D (4 ) i s n ot pa i d w it h in th e s p e ci fi ed tim e a n d w hi ch l e vy i s d i f f e r ent f r om li a bi l i ty to pa y i n t e r e s t u nd e r se c ti on 2 3 4B or un d e r s e c ti on 49 ITA Nos. 1253 & 1254/Del/2021 Maharashtra Feeds P Ltd.
2 45 D ( 2C ) . [ S e e D a m a ni B r ot h er s ( s u p ra ) at page 48 5 ] I II . Wh et h e r th e S ett l e m en t C o m mi ss i on c a n r e - o p en i t s c on c lu d ed pr o c e ed in g s b y h a v i ng r e c ou rs e t o S e c t i on 1 5 4 of t h e A ct s o a s to l e v y in t e r e s t u n de r s ect i on 2 3 4B , i f it wa s n ot d on e i n t h e o ri gin al p r oc e e d in g s ?
1 5. As s tat ed , p r o c e ed in g s b ef o r e S e tt l em en t C om mi s si o n a r e sim ila r t o a rb i t r a ti o n pr o c e ed in g s . I t c on t e m pl a t es a ss e s s men t by s et tl em en t a nd n ot by way of r egu la r a s s es s m e n t or as s e ss m en t u n d e r s ec t i o n 1 43 ( 1) or u nd e r sec ti on 14 3( 3 ) o r u nd e r sec t i on 1 4 4 o f t h e A ct . I n t ha t sen s e , it i s a C o de b y it s el f . It d o e s n ot b egi n wi th t h e fi lin g o f th e r et u rn bu t b y fil in g th e a ppl i c a t i on f o r s et tl e m ent . A s st a t ed a b ov e , u n d e r t h e A ct , pr o c ed u r e f or a s s e s sm ent fa l l s in Ch a p te r X IV (i n w h i c h s e cti on 1 54 f all s) w hi ch i s d i ff e r en t f r om p r o ced u r e f o r set tl e m en t in C hap t e r XI X -A i n w hi ch s e ct i on s 2 45 C a n d 24 5 D fa l l. P r ov i s i on f or l ev y of i nt e r es t for d ef a u lt in p a ym en t of a d v a n ce tax u nd e r sec t i on 2 3 4 B fa ll s i n C h a p t e r X V I I [ S ect i on F ] w hi ch d e a l s w it h col l ec t i on a n d r e co v e ry of ta x w h i ch a s s t a t ed a b o v e i s in cid e nt al to th e l ia b ili t y to pa y advance ta x un d e r s e cti on 2 07 (w h ich i s a l s o in Ch a p t e r X V II ) a n d t o t h e c om pu t a t i on of to t al in c om e in the m a n n e r i nd i c a t e d u nd e r C ha p t e r XIX- A vid e se c t io n s 2 45 C (1 B) a n d 2 45 C (1 C ) r ea d w it h the p r ov i s o s to s e ct i on 24 5 C( 1 ) on th e a d d i ti on a l i n c om e t a x p a ya b l e o n th e u nd is cl o s ed in c om e . F u rth e r , i f o n e e xa m i n es t h e p ro v is i on s o f s e ct i on s 24 5 C( 1 B) a nd 24 5 C( 1 C ) , on e fin d s th a t v a ri ou s situ at i on s a r e t a k en i n t o a c co un t w h il e c om pu ti n g th e a dd it ion a l am oun t o f ta x p a y a bl e, v i z. , i f t h e a p pl i ca nt ha s n o t fil ed hi s r etu rn s , i f h e h a s fi l ed bu t o rd e r s o f a s s es s m en t a r e n ot p a ss ed or if th e p r o c e edi n gs are p en di ng fo r r e- a s s e ss men t u nd e r sec t i on 1 4 7 ( a ga i n in Ch a pt e r XI V ) o r b y w a y o f a p p ea l o r r ev is i on in co nn e c ti on wi th su ch r e-a ss e s sm en t and the app li ca nt h a s n ot f u rn i sh ed h i s r e t u rn of t ot a l in c o m e in w h i ch ca s e ta x h a s t o b e c a l cu l a t ed on t h e a gg r eg a t e of t ot a l i n c om e as a s s e ss e d in th e ea r l i e r p r oc e ed i n gs for a s s es s men t 50 ITA Nos. 1253 & 1254/Del/2021 Maharashtra Feeds P Ltd.
u nd e r sec t i on 1 4 3 or un de r s e c ti on 144 or un d e r s e c ti on 1 47 [ se e s e ct i on 2 4 5 C( 1 B) ] . Th e p oi n t t o b e n ot ed i s t h a t in c omp u t ati on o f a d di ti on a l in c om e t a x p a y a bl e by th e a s se s se e , th e r e is no m e n t ion o f s e ct i on 154. On th e c o n tr a r y , u nd e r sec t i on 2 4 5I t he o r d e r of th e S ett l em en t C om m i s s i on is ma d e fin a l and c on clu si v e on ma t t e r s m ent i on e d in the app li ca ti on f o r s et t le m ent ex c ept in th e t wo ca s e s o f fra u d an d mi s r ep r e s e n ta t i on in w hi ch ca s e t he ma t t er co u l d b e r e- op en ed b y w a y o f r ev i ew o r r e ca l l. Li k e I T A T, th e S et t l e m en t C o mm is si on i s a qu a s i - ju di c ia l b od y . U n de r s ec t i on 25 4 (2 ) , t h e ITA T i s g i v en t h e p ow e r t o r ec tif y bu t no su ch p o w e r i s gi v en t o th e S et tl em en t C o m mi s si on. Th u s, we h old t ha t S et tl e men t C o mm is si on cannot re o p en its c on c lu d e d p r o c e ed in g s by in v ok in g s e cti on 1 5 4 of t h e A ct . L a st l y , on e m u st k e ep in m in d th e di f f er e nc e b e t w e en r e vi e w / recall of th e o rd e r and r e cti fi cati on u nd e r s ec t i on 15 4 . T h e S c h edu l e o f C h a pt e r XIX - A do e s n ot c on t em pl a t e in v o ca ti on o f s e c t ion 15 4 oth e rw is e t he r e w o u ld b e n o fi n a l it y t o th e a s s e ss m en t b y s et tl e m en t w hi ch i s di f f e r ent f r o m a s s e s s m en t u nd e r Ch a p t e r X IV w h e r e t h e r e i s a n app ea l , r ev i s i on , e tc . S et tl e m ent of l ia b il it y and n ot det e r mi n a ti on o f lia bi lit y i s t h e obj e c t of C h a pt e r X IX -A . Ev en ot h e r w i s e, in v o c a ti on of se cti on 1 5 4 o n fa ct s o f t hi s b a t ch of ca s e s i s n ot j u st i fi e d. I n th i s b a t ch of c a s e s, th e si tu a ti on w h i c h pr e va i le d w h en th e S e tt l em e nt C o mm i s si on w a i v ed o r r e d uc ed in t e r e st c ha rg e a b l e u n d e r s ec ti ons 23 4 A a n d 2 34 B w a s t h a t a deb at e w a s on a s to w h eth e r th e S e tt l e m en t C o mm is si on h a s t h e po w e r t o r ed u c e o r w a i v e i nt e r e s t . I t is o n ly a ft e r Gha s w a la 's ca s e t h at t h e l a w g ot s et t l ed t h a t t h e n a tu r e a n d t h e ch a r a c t e r o f t h e in t e r e s t w a s c o mp en sa t o r y a n d ma n d a t o r y a nd t h a t t h e C o mm is si on h a d n o s u c h p ow e r . B ut e v en i n Gh a s w a l a , t h e qu e s ti on a s t o wh et he r su c h i nt e r e st u n de r s ec ti on 2 3 4B s h ou l d ru n u p t o th e o rd e r u nd e r s ec t i on 24 5 D ( 1) o r u p t o th e d a t e o f th e o rd e r u n d e r s e c ti on 2 34 D ( 4) wa s n ot d e ci d e d . I n fa ct , th a t w a s th e r e a s on fo r th e O rd e r s o f R ef e r en c e t o th e C on s tit u ti on 51 ITA Nos. 1253 & 1254/Del/2021 Maharashtra Feeds P Ltd.
Be n c h of t hi s C ou rt vide o rd e rs d a t ed 1 4 .1 2 . 2 00 4 and 2 0. 1 . 2 00 5 . Th e r e is on e m o r e r ea s on fo r t h is R efe r en c e . I n t h e ca s e o f C IT v. Hi nd u st a n Bu lk C a r ri e r [( 20 0 3) 2 59 IT R 44 9 ], a 3 - J ud g e B en c h o f t h is C ou rt , b y ma j o r i t y, h e ld th a t w h e r e, up on th e O rd e r of t he S e t tl em en t Co m m is si o n un d e r sec t i on 24 5 D (4 ) , th e r e arises a d e fi c it in th e p a y men t of a d v a n ce t ax u nd e r sec t i on 2 0 8 , th e e n d p oi n t o r t h e t e r min u s o f t h e p e ri od f or w hi ch i nt e r e s t ha s t o be p a i d u n d e r s ec t i on 2 3 4B o n t h e de fi ci t i s th e da t e on w hi ch t h e S et tl e men t C o m m i ss i on p a ss e s th e o r d er un d e r s e c t ion 24 5 D (4 ) . T h i s de c i si on w a s d el i v er ed on 1 7. 1 2 .20 0 2 a ft e r th e j ud g m en t of t hi s Court in Gha sw al a ( s up r a ) . On t h e sa m e da y , th e sa m e B en ch i n t h e ca s e o f D a ma ni B r ot h e r s ( su p ra ) h el d th a t i nt e r e s t ch a rg ed u nd e r sec t i on 2 34 B be c om e s p a ya bl e on t he i n com e d i s c lo s ed in th e r e t u rn and th e i nc o m e di s cl o s ed b ef o r e the S et tl e men t C o mm is si on ; th a t , s u ch in t e r e st is c ha rg e a b l e till th e C o mm is si on a c ts in t e r m s o f s e ct i on 2 4 5D ( 1) a nd th a t a ft e r t h e Set tl em en t C o mm i s s i on a l l ow s t h e a p p li ca t i on fo r s ett l e m ent t o be p r oc e ed e d w i th t he r e wi ll b e n o fu rt h e r cha rg e of in t e r e st u nd e r sec t i on 2 3 4B . Th u s, e v en on t he qu est i on o f t e r mi nu s th e r e w a s l ot o f c on tr o v er s y a n d in th e ci r cu m st a n c e s , w e a r e o f th e v i ew t h a t i n v oc a t i on o f s e ct i on 1 5 4 ( h el d t o b e i n a pp li c a b l e to C h a pt e r XI X -A p r o c e ed in g s ) ca n n ot b e j u st if i ed .
Co nc lus i on s :
1 6. ( 1) S e c ti on s 2 3 4A , 2 3 4 B a n d 2 34 C a r e a pp l i ca b l e to th e pr o c e ed in g s of t h e S et t l em ent C o mm is s i on un d e r C h a pt e r XIX- A o f th e A ct t o th e e xt en t in d ic a t ed h e r ein a b ov e .
( 2) C on s eq u en t u p o n c on clu si on ( 1 ), t h e t e r mi na l p oin t f o r t h e le v y o f i nt e r e s t un d e r se cti on 23 4 B w o u ld b e u p t o t h e d a t e of th e o rd e r u n d e r s e c ti on 2 45 D ( 1) a nd n ot up t o th e da t e o f t h e O rd e r of S ett l em en t u nd e r se cti on 2 4 5 D (4 ) .
52ITA Nos. 1253 & 1254/Del/2021 Maharashtra Feeds P Ltd.
( 3) T h e S et tl e m en t C om mi s si on ca n no t r e- op en it s c on cl u de d pr o c e ed in g s b y i n v ok in g s e ct i on 1 5 4 o f th e A ct s o a s t o l ev y in t e r e st u nd e r s e ct ion 2 3 4B , p a rti cul a rl y , in v i ew o f s e cti on 2 45 I .
1 7. A c co rdin g ly , R ef e r en c e t o th e C on st i t u ti on B en ch vi d e o r d e r s da t ed 14 .1 2.2 0 04 a n d 2 0 .1 .2 0 05 st a n d s du ly a n s w e r ed a n d t h e ma t t e r s a r e a c c o rd i n gl y d i s p o s ed of ."
.. . .. . .. . .. .. . .. . .. . .. . .. . .. . .. . .C J I (S. H. Ka pa di a ) .. . .. . .. . .. .. . .. . .. . .. . .. . .. . .. . .. .J . (B. S ud e r s ha n R ed d y) .. . .. . .. . .. .. . .. . .. . .. . .. . .. . .. . .. .J . (K . S . R a dh a k r is h na n ) .. . .. . .. . .. .. . .. . .. . .. . .. . .. . .. . .. .J . ( S u ri n de r Si ng h N i jj a r) .. . .. . .. . .. .. . .. . .. . .. . .. . .. . .. . .. .J . ( Sw a t a n t er K um a r) N e w D el h i;
O c t ob e r 2 1 , 2 0 1 0 .
8. Keeping in view, the detailed order of the Hon'ble Apex Cour t, respectfully following the ratio laid therein, we hold that the Hon'ble ITSC has rightly directed the Revenue to follo w the decis ion of the Hon'ble Apex Co urt in the case of Brij Lal & Ors. Vs. CIT (supra). Hence, the order of the Assessing Officer passed u/s 154 charging interest u/s 234A and u/s 234B is legally not tenable.
9. In the re sult, the appeals o f the assessee are allowed. Order Pronounced in the Open Court on 06/02/202 4.
Sd/- Sd/- (Yogesh Kumar US) (Dr. B. R. R. Kumar) Judicial Member Accountant Member Dated: 06/02/2024 *Subodh/NV, Sr. PS*