High Court affirms Tribunal's ruling on interest liability under Income-tax Act

The High Court of Calcutta upheld the Tribunal's order, ruling against the assessee in a case concerning the liability to pay interest under Sections 234B and 234C on tax payable on book profit computed under Section 115J of the Income-tax Act, 1961. The court emphasized the binding nature of Supreme Court decisions on all courts in India, dismissing the appeal and highlighting the duty to follow such decisions. The appellant's argument was found to lack merit, and the appeal was dismissed without costs.

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Issues:
Interpretation of legal fiction under Section 115JA of the Income-tax Act, 1961 regarding interest under Sections 234B and 234C on book profit.

Analysis:
The High Court of Calcutta heard an appeal under Section 260A of the Income-tax Act, 1961, directed against an order passed by the Income-tax Appellate Tribunal. The substantial question of law was whether the assessee was liable to pay interest under Sections 234B and 234C on the tax payable on the book profit computed under Section 115J of the Act. The court noted a recent decision by the Supreme Court in the case of Joint Commissioner of Income-tax vs. Rolta India Ltd., where a similar question was answered in the affirmative against the assessee. The appellant argued that adding another legal fiction to an existing one under Section 115JA(1) would be incorrect, citing the decision in Commissioner of Income-tax (Central), Calcutta Vs. Moon Mills Ltd. The court, however, held that the Supreme Court's decision in Rolta India Ltd. was binding and dismissed the appeal, affirming the Tribunal's order. The court emphasized that a decision by the Supreme Court on a pure question of law is binding on all courts in India, regardless of whether all aspects were considered.

In conclusion, the court found no merit in the appellant's argument and upheld the Tribunal's order, answering the substantial question of law against the assessee. The court highlighted the binding nature of Supreme Court decisions on all courts in India, emphasizing the duty to follow such decisions. The appeal was dismissed with no order as to costs.

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