2017 (12) TMI 664 - AT - Income Tax

Tribunal Upholds Interest for Non-Payment of AMT: Section 234B Ruling

M/s GIE Jewels, Jaipur Versus Income Tax officer, Ward-2 (1), Jaipur

M/s GIE Jewels, Jaipur Versus Income Tax officer, Ward-2 (1), Jaipur - Tmi Issues Involved:1. Charging of interest under section 234B of the Income Tax Act, 1961.2. Application of provisions of section 208 of the Income Tax Act, 1961 for depositing Alternative Minimum Tax (AMT) as self-assessment tax and advance tax.3. Treatment of AMT as Income Tax for advance deposit and the consequent interest under section 234B.4. Disallowance of the application filed under section 154 for not treating AMT as Income Tax.Detailed Analysis:1. Charging of Interest under Section 234B:The primary issue revolves around whether the interest under section 234B can be charged for non-payment of advance tax concerning Alternative Minimum Tax (AMT) under section 115JC. The assessee argued that section 234B should not apply to AMT as it is not covered by the advance tax provisions under section 208. The Tribunal, however, upheld the decision of the CIT(A) and the AO, citing the Supreme Court's decision in JCIT vs. Rolta India Ltd., which confirmed that interest under section 234B applies to all companies, including those liable under sections 115JA and 115JB, which are similar to 115JC in terms of intent and application.2. Application of Provisions of Section 208 for Depositing AMT:The assessee contended that the provisions of section 208, which pertain to advance tax, do not apply to AMT under section 115JC. They argued that AMT is based on book profits, which can only be determined after finalizing accounts, unlike advance tax which is based on estimated current income. The Tribunal, however, found that section 115JC, like sections 115JA and 115JB, is intended to ensure that entities pay a minimum tax based on book profits, and thus, the advance tax provisions do apply. The Tribunal referenced multiple High Court decisions and the Supreme Court ruling in Rolta India Ltd., which supported the applicability of advance tax provisions to AMT.3. Treatment of AMT as Income Tax for Advance Deposit:The assessee argued that AMT should not be treated as regular income tax for the purposes of advance tax under section 208, and thus, interest under section 234B should not be charged for non-payment of AMT in advance. The Tribunal rejected this argument, stating that the legislative intent behind sections 115JA, 115JB, and 115JC is to ensure that entities pay a minimum tax based on book profits. The Tribunal emphasized that the provisions of section 234B apply to any tax payable under these sections, as confirmed by the Supreme Court and various High Courts.4. Disallowance of Application under Section 154:The assessee filed an application under section 154, claiming an apparent mistake in charging interest under section 234B for non-payment of AMT. The AO rejected this application, and the CIT(A) upheld this decision. The Tribunal noted that the issue of charging interest under section 234B is a highly debatable one and thus beyond the scope of section 154, which deals with rectifying apparent mistakes. The Tribunal concluded that since the issue requires detailed reasoning and is not a clear-cut mistake, it cannot be rectified under section 154.Conclusion:The Tribunal dismissed the appeals of the assessee, upholding the decisions of the AO and CIT(A) to charge interest under section 234B for non-payment of AMT in advance. The Tribunal relied on the Supreme Court's decision in JCIT vs. Rolta India Ltd. and other High Court rulings, affirming that the provisions of section 234B apply to AMT under section 115JC, and that the advance tax provisions under section 208 are applicable to AMT. The Tribunal also confirmed that the issue could not be addressed under section 154 due to its debatable nature.