Gujarat High Court
Dy.Commissioner Of Income-Tax vs Sabarmati Paper Udyog ... on 4 October, 2017
Author: Akil Kureshi
Bench: Akil Kureshi, Biren Vaishnav
O/TAXAP/31/2003 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
TAX APPEAL NO. 31 of 2003
[On note for speaking to minutes of order dated 11/09/2017 in
O/TAXAP/31/2003 ]
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DY.COMMISSIONER OF INCOME-TAX....Appellant(s)
Versus
SABARMATI PAPER UDYOG LTD.....Opponent(s)
==========================================================
Appearance:
MRS MAUNA M BHATT, ADVOCATE for the Appellant(s) No. 1
MR MANISH J SHAH, ADVOCATE for the Opponent(s) No. 1
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CORAM: HONOURABLE MR.JUSTICE AKIL KURESHI
and
HONOURABLE MR.JUSTICE BIREN VAISHNAV
Date : 04/10/2017
ORAL ORDER
(PER : HONOURABLE MR.JUSTICE AKIL KURESHI)
1. Through this note, it is pointed out that in our order dated 11.09.2017 in Tax Appeal No. 31 of 2003, there were certain typographical errors. To correct such errors, the said order is recalled and a fresh order is passed as under:
1. The appeal was admitted for consideration of the following substantial question of law :
"Whether the Income Tax Appellate Tribunal has not substantially erred in law in holding that interest under sections Page 1 of 4 HC-NIC Page 1 of 8 Created On Sat Oct 07 10:37:09 IST 2017 1 of 8 O/TAXAP/31/2003 ORDER 234B and 234C is not chargeable if the total income is assessed to tax under section 115J of the Income Tax Act?"
2. At one stage, the appeal was disposed of by judgment of the Division Bench dated 24.6.2011. Relying upon the judgment of the Supreme Court in case of Joint Commissioner of Income tax v. Rolta India Ltd reported in (2011) 330 ITR 470(SC), the Division Bench answered the question in favour of the Revenue. The assessee thereupon filed Misc. Civil Application (OJ) No.15/2015 for review mainly on the ground that the decision of Supreme Court in case of Rolta India Ltd (supra) was rendered in context of provisions contained in sections 115JA and 115JB of the Act whereas judgment of Karnataka High Court in case of Kwality Biscuits Ltd. v. Commissioner of Incometax reported in (2000) 243 ITR 519 (Karnataka), was in context of section 115J of the Act which was confirmed by the Supreme Court. This was also noticed in the later decision in case of Rolta India Ltd (supra). The Division Bench allowed the assessee's application making following observations :
"8. On the other hand, Mr. Nitin Mehta, learned Senior Standing Counsel for the respondent has very fairly submitted that the controversy involved in the present case is no longer res integra, inasmuch as, this court in the case of Deputy C.I.T. (Assistant) v. Farmson Pharmaceuticals Guj. Ltd., rendered on 07.04.2011 in Tax Appeal No.390 of 1999, has followed the decision of the Karnataka High Court in Kwality Biscuits Ltd. (supra) as affirmed by the Supreme Court in Commissioner of Income Tax v. Kwality Biscuits Ltd. (supra) and has held that interest could not be charged under sections 234B and 234C of the Act when the total income was determined under section Page 2 of 4 HC-NIC Page 2 of 8 Created On Sat Oct 07 10:37:09 IST 2017 2 of 8 O/TAXAP/31/2003 ORDER 115J of the Act. It was, accordingly, submitted that the court may pass such order as it deems fit in the facts and circumstances of the case.
9. In the light of the facts and submissions noted hereinabove, it is evident that the earlier exparte judgment and order dated 24.06.2011 had been made by this court on an erroneous impression that the controversy involved in this case stands concluded by the decision of the Supreme Court in the case of Rolta India Limited (supra). A perusal of the decision of the Supreme Court in the case of Rolta India Limited (supra) makes it evident that the same was rendered in the context of the provisions of sections 115JA and 115JB of the Act, whereas the facts of the present case relate to the provisions of section 115J of the Act. The decision of the Karnataka High Court in the case of Kwality Biscuits Ltd. (supra) which was affirmed by the Supreme Court was delivered in the context of section 115J of the Act. A conjoint reading of section 115J of the Act as it stood at the relevant time, with sections 115JA and 115JB of the Act reveals that insofar as sections 115JA and 115JB are concerned, they are a complete code in themselves. Subsection (4) of section 115JA and subsection (5) of section 115JB of the Act specifically provide that save as otherwise provided in the section, all other provisions of the Act shall apply to every assessee, being a company, mentioned in the section; whereas, no similar provision is found in section 115J of the Act. Moreover, the Supreme Court in the case of Rolta India Limited (supra) has specifically referred to the decision of the Karnataka High Court in the case of Kwality Biscuits Ltd. (supra) as having been affirmed by the Supreme Court in Kwality Biscuits Ltd. (supra) and has not disturbed the position of law enunciated therein.
10. In Rolta India Limited (supra), the Supreme Court, in the context of the provisions of sections 115JA and 115JB of the Act, which are held to be a self-contained code pertaining to MAT, held that interest under sections 234B and 234C of the Act shall be payable on failure to pay advance tax in respect of Page 3 of 4 HC-NIC Page 3 of 8 Created On Sat Oct 07 10:37:09 IST 2017 3 of 8 O/TAXAP/31/2003 ORDER tax payable under those sections. Apparently therefore, the judgment and order dated 24.06.2011 made by this court in Tax Appeal No.31 of 2003 has been rendered on a misreading of the decision of the Supreme Court in the case of Rolta India Limited (supra). Moreover, this court in the case of Farmson Pharmaceuticals Guj. Ltd (supra) has followed the decision of the Karnataka High Court in Kwality Biscuits Ltd. (supra) as affirmed by the Supreme Court and has held that interest cannot be charged under section 234B and 234C of the Act where the total income is determined under sec 115J of the Act. The said decision has been rendered on 07.04.2011, that is, prior in point of time to the judgment and order dated 24.06.2011 which is sought to be recalled. In the aforesaid premises, the application deserves to be allowed."
3. The said order recalling the judgment allowing the assessee's petition has given detail reasons why the Bench had previously erred in answering the question in favour of the Revenue. We adopt the reasonings and dismiss the appeal answering the question against the Revenue and in favour of the assessee.
(AKIL KURESHI, J.) (BIREN VAISHNAV, J.) Jyoti Page 4 of 4 HC-NIC Page 4 of 8 Created On Sat Oct 07 10:37:09 IST 2017 4 of 8 O/TAXAP/31/2003 ORDER IN THE HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL NO. 31 of 2003 ========================================================== DY.COMMISSIONER OF INCOME-TAX....Appellant(s) Versus SABARMATI PAPER UDYOG LTD.....Opponent(s) ========================================================== Appearance:
MRS MAUNA M BHATT, ADVOCATE for the Appellant(s) No. 1 MR NITIN MEHTA, ADVOCATE for the Opponent(s) No. 1 ========================================================== CORAM: HONOURABLE MR.JUSTICE AKIL KURESHI and HONOURABLE MR.JUSTICE BIREN VAISHNAV Date : 11/09/2017 ORAL ORDER (PER : HONOURABLE MR.JUSTICE AKIL KURESHI)
1. The appeal was admitted for consideration of the following substantial question of law :
"Whether the Income Tax Appellate Tribunal has not substantially erred in law in holding that interest under sections 234B and 234C is not chargeable if the total income is assessed to tax under section 115J of the Income Tax Act?"
2. At one stage, the appeal was disposed of by judgment of the Division Bench dated 24.6.2011. Relying upon the judgment of the Supreme Court in case of Joint Page 1 of 4 HC-NIC Page 5 of 8 Created On Sat Oct 07 10:37:09 IST 2017 5 of 8 O/TAXAP/31/2003 ORDER Commissioner of Incometax v. Rolta India Ltd reported in (2011) 330 ITR 470(SC), the Division Bench answered the question in favour of the Revenue. The assessee thereupon filed Misc. Civil Application (OJ) No.15/2015 for review mainly on the ground that the decision of Supreme Court in case of Rolta India Ltd (supra) was rendered in context of provisions contained in sections 115JA and 115JB of the Act whereas judgment of Karnataka High Court in case of Kwality Biscuits Ltd. v. Commissioner of Incometax reported in (2000) 243 ITR 519 (Karnataka), was in context of section 115J of the Act which was confirmed by the Supreme Court. This was also noticed in the later decision in case of Rolta India Ltd (supra). The Division Bench allowed the Revenue's application making following observations :
"8. On the other hand, Mr. Nitin Mehta, learned Senior Standing Counsel for the respondent has very fairly submitted that the controversy involved in the present case is no longer res integra, inasmuch as, this court in the case of Deputy C.I.T. (Assistant) v. Farmson Pharmaceuticals Guj. Ltd., rendered on 07.04.2011 in Tax Appeal No.390 of 1999, has followed the decision of the Karnataka High Court in Kwality Biscuits Ltd. (supra) as affirmed by the Supreme Court in Commissioner of Income Tax v. Kwality Biscuits Ltd. (supra) and has held that interest could not be charged under sections 234B and 234C of the Act when the total income was determined under section 115J of the Act. It was, accordingly, submitted that the Page 2 of 4 HC-NIC Page 6 of 8 Created On Sat Oct 07 10:37:09 IST 2017
6 of 8 O/TAXAP/31/2003 ORDER court may pass such order as it deems fit in the facts and circumstances of the case.
9. In the light of the facts and submissions noted hereinabove, it is evident that the earlier exparte judgment and order dated 24.06.2011 had been made by this court on an erroneous impression that the controversy involved in this case stands concluded by the decision of the Supreme Court in the case of Rolta India Limited (supra). A perusal of the decision of the Supreme Court in the case of Rolta India Limited (supra) makes it evident that the same was rendered in the context of the provisions of sections 115JA and 115JB of the Act, whereas the facts of the present case relate to the provisions of section 115J of the Act. The decision of the Karnataka High Court in the case of Kwality Biscuits Ltd. (supra) which was affirmed by the Supreme Court was delivered in the context of section 115J of the Act. A conjoint reading of section 115J of the Act as it stood at the relevant time, with sections 115JA and 115JB of the Act reveals that insofar as sections 115JA and 115JB are concerned, they are a complete code in themselves. Subsection (4) of section 115JA and subsection (5) of section 115JB of the Act specifically provide that save as otherwise provided in the section, all other provisions of the Act shall apply to every assessee, being a company, mentioned in the section; whereas, no similar provision is found in section 115Jof the Act. Moreover, the Supreme Court in the case of Rolta India Limited (supra) has specifically referred to the decision of the Karnataka High Court in the case of Kwality Biscuits Ltd. (supra) as having been affirmed by the Supreme Court in Kwality Biscuits Ltd. (supra) and has not disturbed the position of law enunciated therein.
10. In Rolta India Limited (supra), the Supreme Court, in the context of the provisions of sections 115JA and 115JB of the Act, which are held to be a self-contained code pertaining to MAT, held that interest under sections 234B and 234C of the Act shall be payable on failure to pay Page 3 of 4 HC-NIC Page 7 of 8 Created On Sat Oct 07 10:37:09 IST 2017 7 of 8 O/TAXAP/31/2003 ORDER advance tax in respect of tax payable under those sections. Apparently therefore, the judgment and order dated 24.06.2011 made by this court in Tax Appeal No.31 of 2003 has been rendered on a misreading of the decision of the Supreme Court in the case of Rolta India Limited (supra). Moreover, this court in the case of Farmson Pharmaceuticals Guj. Ltd (supra) has followed the decision of the Karnataka High Court in Kwality Biscuits Ltd. (supra) as affirmed by the Supreme Court and has held that interest cannot be charged under section 234B and 234C of the Act where the total income is determined under sec 115J of the Act. The said decision has been rendered on 07.04.2011, that is, prior in point of time to the judgment and order dated 24.06.2011 which is sought to be recalled. In the aforesaid premises, the application deserves to be allowed."
3. The said order recalling the judgment allowing the Revenue's petition has given detail reasons why the Bench had previously erred in answering the question in favour of the Revenue. We adopt the reasonings and dismiss the appeal answering the question against the Revenue and in favour of the assessee.
(AKIL KURESHI, J.) (BIREN VAISHNAV, J.) raghu Page 4 of 4 HC-NIC Page 8 of 8 Created On Sat Oct 07 10:37:09 IST 2017 8 of 8