Supreme Court - Daily Orders
C.I.T,Cochin vs Choice Trading Corp.(P) Ltd. on 30 September, 2015
Bench: T.S. Thakur, Kurian Joseph
1
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 8180 OF 2015
(Arising Out of SLP (C) No. 2034 OF 2011)
C.I.T., COCHIN APPELLANT(S)
VERSUS
CHOICE TRADING CORP.(P) LTD. RESPONDENT(S)
CIVIL APPEAL NO. 8181 OF 2015
(Arising Out of SLP (C) No. 10946 OF 2011)
O R D E R
Leave granted.
The Income-Tax Appellate Tribunal, Cochin Bench dismissed the appeals filed by the Revenue relying upon the decision of the High Court of Karnataka in Kwality Biscuits Ltd. Vs. CIT [2000) 243 ITR 519 (Kant) and an earlier decision of the very same Bench of the Tribunal in Escapade Resorts Pvt. Ltd. Vs. ACIT [303 ITR (AT) 118 (Cochin). In an appeal filed before the High Court also the Revenue failed on the ground that the issue stood Signature Not Verified Digitally signed by Deepak Mansukhani Date: 2015.10.12 concluded by the decision in Kwality Biscuits case 10:35:12 IST Reason: (supra) which decision was affirmed by this Court with the dismissal of the special leave petition filed against 2 the same. The present appeal assails the correctness of the said two judgments and orders.
Mr. Ranjit Kumar, learned Solicitor General appearing for the Revenue submitted that the Tribunal and the High Court had while dismissing the appeals filed by the Revenue relied upon the decision in the case of Escapade Resorts Pvt. Ltd. (supra). That decision having been reversed by this Court in C.I.T., Cochin Vs. Escapade Resorts (P) Ltd. disposed off on 27th July, 2015 in the light of the decision of this Court in Joint Commissioner of Income Tax, Mumbai Vs. Rolta India Limited [(2011) 2 SCC 408], the very basis on which the Tribunal and the High Court had upheld the deletion of interest under Sections 234-B and 234-C of the Income Tax Act, 1961 (for short ”the Act”) stood removed.
On behalf of the respondent-assessee it is contended by Mr. V. Giri, learned senior counsel that the order passed by this Court in C.I.T., Cochin Vs. Escapade Resorts (P) Ltd. (supra) reversing the view taken by the High Court was passed on the basis of a concession made by counsel for the assessee and does not therefore state the legal position authoritatively. He urged that the decision of this Court in Rolta India Limited (supra) does not support the argument that decision of the High Court in Kwality 3 Biscuits Ltd. (supra) stood reversed nor does it support the argument that MAT companies were liable to pay interest under Sections 234-B and 234-C of the Act even when such companies are governed by Section 115-JB, which according to the learned counsel are distinctly different from those falling under Section 115-JB.
We have given our anxious consideration to the submission made by learned counsel for the parties. The distinction sought to be made by Mr.V.Giri, learned senior counsel is in our opinion without any difference. This Court has in Rolta India Limited's case (supra) in so many words reiterated that companies covered by Sections 115-JA/115-JB are not exempted from the provisions of Section 234-B and Section 234-C whereunder interest is leviable on default by such companies in the matter of payment of advance tax. The following passage from the decision in Rolta India Limited's case (supra) is in our opinion apposite:-
“11. This view of the Karnataka High Court in Kwality Biscuits Ltd.1 was not shared by the Gauhati High Court in Assam Bengal Carriers Ltd. v. CIT2 and the Madhya Pradesh High Court in Itarsi Oil and Flours (P) Ltd. v. CIT 3 as also by the Bombay High Court in CIT v. Kotak Mahindra 1 (2000) 243 ITR 519 (Kant)
2 (1999) 239 ITR 862 (Gau) 3 (2001) 250 ITR 686 (MP) 4 Finance Ltd.4 which decided the issue in favour of the Department and against the assessee. It appears that none of the assessees challenged the decisions of the Gauhati High Court, the Madhya Pradesh High Court as well as the Bombay High Court in the Supreme Court. However, it may be noted that the judgment of the Karnataka High Court in Kwality Biscuits Ltd. was confined to Section 115-J of the Act. The Order of the Supreme Court dismissing the special leave petition in limine filed by the Department against Kwality Biscuits Ltd. is reported in CIT v. Kwality Biscuits Ltd.5 Thus, the judgment of the Karnataka High Court in Kwality Biscuits stood affirmed. However, the Karnataka High Court has thereafter in Jindal Thermal Power Co. Ltd. v. CIT6 distinguished its own decision in Kwality Biscuits Ltd. and held that Section 115-JB, with which we are concerned, is a self-contained code pertaining to MAT, which imposed liability for payment of advance tax on MAT companies and, therefore, where such companies defaulted in payment of advance tax in respect of tax payable under Section 115-JB, it was liable to pay interest under Sections 234-B and 234-C of the Act. Thus, it can be concluded that interest under Sections 234-B and 234-C shall be payable on failure to pay advance tax in respect of tax payable under Sections 115-JA/115-JB. For the aforestated reasons, Circular No.13/2001 dated 9-11-2001 issued by CBDT has no application. Moreover, in any event, 4 (2003) 130 Taxman 730 (Bom) 5 (2011) 2 SCC 415 6 (2006) 154 Taxman 547 (Kant) 5 Para 2 of that Circular itself indicates that a large number of companies liable to be taxed under MAT provisions of Section 115-JB were not making advance tax payments. In the said circular, it has been clarified that Section 115-JB is a self-contained code and thus, all companies were liable for payment of advance tax under Section 115-JB and consequently provisions of Sections 234-B and 234-C imposing interest on default in payment of advance tax were also applicable.” Following the view taken in Rolta India Limited (supra) we have no hesitation in declaring that the High Court went wrong in holding that the respondent company was not liable to pay interest under Sections 234-B and 234-C of the Act. We, accordingly, set aside the order passed by the Tribunal as well as that passed by the High Court and allow these appeals.
The parties are, however, left to bear their own costs.
...........................J [T.S. THAKUR] ...........................J [KURIAN JOSEPH] September 30, 2015 New Delhi.
ITEM NO.3 COURT NO.2 SECTION IIIA S U P R E M E C O U R T O F I N D I A RECORD OF PROCEEDINGS Petition(s) for Special Leave to Appeal (C) No. 2034/2011 (Arising out of impugned final judgment and order dated 21/08/2009 in ITA No. 1475/2009 passed by the High Court Of Kerala at Ernakulam) C.I.T, COCHIN Petitioner(s) VERSUS CHOICE TRADING CORP.(P) LTD. Respondent(s) (with office report) WITH SLP(C) No. 10946/2011 (With Office Report) Date : 30/09/2015 These petitions were called on for hearing today. CORAM :
HON'BLE MR. JUSTICE T.S. THAKUR HON'BLE MR. JUSTICE KURIAN JOSEPH For Petitioner(s) Mr. Ranjit Kumar, SG Mr. D.L. Chidananda, Adv. Mr. Santosh Kumar, Adv.
Ms. Movita, Adv.
Mrs. Anil Katiyar, Adv.
Mr. B. V. Balaram Das,Adv. For Respondent(s) Mr. V. Giri, Sr. Adv.
Mr. Sukumar Nainan Oomen, Adv. Mr. Sherry Samuel Oomen, Adv. Mr. S. Mohanas, Adv.
Mr. A. Raghunath, Adv.
UPON hearing the counsel the Court made the following O R D E R Leave granted.
The appeals are allowed in terms of the signed order.
(Ashok Raj Singh) (Veena Khera)
Court Master Court Master
(Signed Order is placed in the file)