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Issues: Whether interest under sections 234B and 234C is leviable for income computed under section 115JA of the Income-tax Act, 1961 for the assessment year 1998-99.
Analysis: Section 115JA contains a deeming provision for computing total income on the basis of book profit and includes sub-section (4) stating that, save as otherwise provided in this section, all other provisions of the Act shall apply. The majority examined provisions relating to advance tax (sections 207209) and prior judicial decisions and administrative guidance, concluding that the statutory scheme contemplates payment of advance tax on current income and that nothing in sections 207209 excludes income determined under section 115JA from being treated as current income for advance tax purposes. The majority further relied on authorities holding that levy of interest under sections 234B and 234C is automatic and mandatory upon default, and on precedent (including a jurisdictional Special Bench and various High Court decisions) interpreting similar deeming provisions to make advance tax provisions applicable when sub-section(4) (or its counterpart) exists. The majority therefore treated sub-section (4) of section 115JA as expressly bringing other provisions (including advance tax and interest provisions) into application for assessments under section 115JA.
Conclusion: Interest under sections 234B and 234C is leviable on income computed under section 115JA; conclusion is in favour of the Revenue and against the assessee.
Dissenting Opinion: A dissenting member concluded otherwise, following a High Court decision that, on the facts and context of section 115JA and earlier authority on section 115J, interest under sections 234B and 234C is not leviable when assessment is on book profits; the dissent relied on that High Court judgment and treated it as binding for the issues considered by that court.
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