Tribunal rules in favor of assessee, cancels interest under sections 234B and 234C.

The Tribunal allowed the appeals of the assessee, deleting the interest under sections 234B and 234C. It held that the assessee had a genuine belief that no advance tax was payable on minimum alternate tax under section 115JB, based on the prevailing legal position at the time. The Tribunal emphasized that the subsequent decision imposing such tax retrospectively could not apply to the assessee. Therefore, the interest levied was deemed unjustified, and the assessee's position was supported by established legal principles.

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Issues:
Levy of interest under sections 234B and 234C for non-payment of advance tax on minimum alternate tax under section 115JB.

Analysis:
The appeals were filed against the orders of the Commissioner of Income-tax (Appeals) for the assessment years 2008-09 and 2009-10. The main ground raised by the assessee was regarding the charging of interest under sections 234B and 234C in view of the provisions under section 115JB of the Income-tax Act, 1961. The Assessing Officer computed book profits for minimum alternate tax under section 115JB and levied interest under sections 234B and 234C. The assessee challenged this before the Commissioner of Income-tax (Appeals) citing various decisions, including the Supreme Court's ruling in CIT v. Kwality Biscuits Ltd. The Commissioner upheld the levy of interest under sections 234B and 234C based on the decision in Joint CIT v. Rolta India Ltd.

The authorized representative for the assessee argued that the Commissioner ignored the prevailing law at the time of assessment, as per the Kwality Biscuits case, and the assessee was not required to pay advance tax on minimum alternate tax under section 115JB. The representative also cited other court decisions supporting this stance. The Departmental representative, however, supported the orders of the lower authorities and the decision in Joint CIT v. Rolta India Ltd.

The Tribunal considered the submissions and the legal precedents. It noted that at the relevant time, the law, as per Kwality Biscuits and other decisions, was that no advance tax was payable on minimum alternate tax. The subsequent decision in Joint CIT v. Rolta India Ltd. cannot be imposed retrospectively on the assessee. Therefore, the Tribunal held that the assessee had a bona fide belief that advance tax was not payable on minimum alternate tax under section 115JB. Consequently, the interest under sections 234B and 234C was deleted as the assessee had followed the settled law prevailing at the time.

In conclusion, the appeals of the assessee were allowed, and the interest under sections 234B and 234C was deleted based on the legal position prevailing at the time of assessment.

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