Income Tax Appellate Tribunal - Mumbai
Khandelwal Laboratories P. Ltd , Mumbai vs Department Of Income Tax
M/s Khandelwal Laboratories Pvt. Ltd.
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IN THE INCOME TAX APPELLATE TRIBUNAL "I" BENCH, MUMBAI
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BEFORE SHRI RAJENDRA SINGH ACCOUNTANT MEMBER AND SHRI VIVEK
VARMA, JUDICIAL MEMBER
vk;dj vihy la[;k/ITA NO. 413/Mum/2011
¼fu/kkZj.k o"kZ@Assessment year: - 2004-05
vk;dj vihy la[;k/ITA NO. 414/Mum/2011
¼fu/kkZj.k o"kZ@Assessment year: - 2005-06
vk;dj vihy la[;k/ITA NO. 415/Mum/2011
¼fu/kkZj.k o"kZ@Assessment year: - 2006-07
ACIT Cen Cir 11 M/s Khandelwal Laboratories Pvt.
The D.C.I.T Cent. Cir - 11 cuke@ Ltd. 79/87 Dattaram Lad Path,
Room No. 804, 8th Floor, Vs. Kalachowki, Nr. Hakoba Mills
Old CGO Annexe Building Compound,
Mumbai - 400 020. Mumbai - 400033.
PAN:-AAACK4225E
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jktLo dh vksj ls@ Revenue by Ms. Bhavana C. Yashraj
izR;FkhZ dh vksj ls@ Asessee by None
lquokbZ dh rkjh[k@Date of hearing 3-10-2013
?kks"k.kk dh rkjh[k@Date of 3-10-2013
pronouncement
vkns'k@ORDER
PER RAJENDRA SINGH, AM
These appeals by the revenue are directed against the common order dated 4.11.2010 of CIT(A) for the assessment year 2004-05 to 2006-07. Identical disputes raised in all the appeals is regarding levy of -1- M/s Khandelwal Laboratories Pvt. Ltd.
interest u/s 234B and 234C for non payment of advance tax in the assessment made u/s 115JB.
2. The facts in brief are that in all the three years under reference income of the assessee had been assessed on book profit u/s 115JB of the ITA Act. Since the assessee had not paid advance tax the AO levied interest u/s 234B and 234C. On receipt of the assessment order the assessee filed rectification petition u/s 154 of the IT Act. before the AO requesting for deletion of interest levied on the ground that interest u/s 234B and 234C was not leviable in view of the judgment of Hon'ble High Court of Bombay in case of Snowcem India Ltd. Vs. DCIT (313 ITR 170). The AO however rejected the rectification petition filed by the assessee. The assessee had also filed appeal against the order of assessment and submitted before CIT(A) that interest u/s 234B and 234C was not levialble in view of the judgment of Bombay High Court in case of Snowem India Ltd. (Supra) and the judgment of Hon'ble Supreme Court in case of Kwality Biscuits Ltd (284 ITR 434). CIT(A) agreed that in view of the judgments aforesaid, levy of interest u/s 234B and 234C was not correct and accordingly directed the AO to delete the interest charged in all the three years under reference. Aggrieved by the decision of CIT(A), the revenue is in appeal before Tribunal in all the three years.
3. We have heard both the parties, perused the records and considered the matter carefully. The dispute is regarding levy of interest u/s 243B and 234C of the IT Act for default in relation to payment of advance tax in relation to income assessed on the basis of book profit u/s 115JB of the IT Act. Earlier Hon'ble High Court of Karnataka in case of Kwality Biscuits Ltd Vs. CIT (243 ITR 519) had held that while dealing with assessment made u/s 115J of the IT Act, interest u/s 234B and 234C could not be charged in cases of MAT assessment. The High Court observed that provisions of section 115J became applicable only if the total income computed under the provisions of the Act was less than 30% of the book profit and the entire exercise of computing the income or -2- M/s Khandelwal Laboratories Pvt. Ltd.
the book profits of the company could be done only at the end of financial year and, therefore, the provisions relating to advance tax were not applicable in case of MAT assessments. The same view had been taken by the Hon'ble High Court of Bombay in case of Snowcem India Ltd. Vs. DCIT ( 313 ITR 170).
3.1 There were however contrary judgments by the Hon'ble High Court of Guwahati in case of Assam Bengal Carriers Ltd. (239 ITR 862); by the Hon'ble High Court of Madhya Pradesh in case of Itarsi Oils & Flours (P) Ltd. Vs. CIT (250 ITR 686) and by Hon'ble High Court of Bombay in case of CIT Vs. Kotak Mahindra Finance Ltd ( 183 CTR 491). The judgment of Hon'ble High Court of Karnataka in case of Kwality Biscuits Ltd (Supra) had been upheld by the Hon'ble Supreme Court as reported in (284 ITR
434).
3.2 However recently the Hon'ble Supreme Court in case of Rolta India Ltd. ( 330 ITR 470) noted that Hon'ble High Court of Karnataka in the subsequent judgment in case of Jindal Thermal Power Co. Ltd Vs. DCIT (203 CTR 381) held that section 115JB was 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 u/s 115JB, it was liable to pay interest u/s 234B and 234C. The Hon'ble Supreme Court also referred to the Circular No. 13 of 2001 of CBDT in which the board noted that a large number of companies liable to be taxed under MAT provisions were not making advance tax payments. The board, therefore, clarified that section 115JB was a self contained code and, therefore, all the companies were liable for payment of advance tax under the provisions of section 115JB and consequently provisions of section 234B and 234C imposing interest on default in payment of advance tax were also applicable. Hon'ble Supreme Court thereafter distinguished the judgment in case of Kwality Biscuits Ltd (Supra) and affirmed the later judgment of Hon'ble High Court of Karnataka in case of Jindal Thermal -3- M/s Khandelwal Laboratories Pvt. Ltd.
Power Co. Ltd Vs. DCIT (Supra) and thus upholding the interest of levy u/s 234B and 234C in case of MAT companies. The issue raised in this appeal is, therefore, covered by the judgment of Hon'ble Supreme Court in case of CIT Vs. Rolta Indial Ltd. (Supra). We, therefore, set aside the orders of CIT(A) and upheld the interest levied by AO u/s 234B and 234C in all the three years under consideration.
4. In the result, appeal of the revenue is allowed.
Order pronounced on 3-10-2013
Sd/- Sd/-
(Vivek Varma) (Rajendra Singh)
Judicial Member Accountant Member
SKS Sr. P.S, Mumbai dated 3-10-2013
Copy to:
1. The Appellant
2. The Respondent
3. The concerned CIT(A)
4. The concerned CIT
5. The DR, "I" Bench, ITAT, Mumbai
By Order
Assistant Registrar
Income Tax Appellate Tribunal,
Mumbai Benches, MUMBAI
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