TaxTMI 
TaxTMI 
2011 (6) TMI 163
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....usiness, inter alia, of manufacturing toiletries and medicines. b) As the assessee did not have any taxable income according to the normal computation provisions of the Income-tax Act for the Assessment Year 2001-02, the assessee had no liability under Section 115JB of the Act as the assessee was entitled to deduct a total amount of Rs.26.51 crore withdrawn from the revaluation reserve and credited to the profit and loss account in computing the book profit. After such deduction, the assessee was left with a book loss of Rs.5.87 crore and in such circumstances, the assessee had no liability to pay any advance tax under Section 208 of the Act for the Assessment Year 2001-02. c) The Chartered Accountants of the assessee in their report in form No.29B computing the book profit under Section 115JB for the Assessment Year 2001-02 stated that the assessee was not liable to tax under Section 115JB and such report along with its return for the Assessment Year 2001-02 was filed on October 31, 2001. According to the said return, the assessee did not have any taxable income either according to the normal computation provisions or under Section 115JB. d) By the Fi....
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....or tax under the retrospective amended Section 115JB. i) Being dissatisfied, the assessee preferred an appeal before the Commissioner of Income-tax who by an order dated October 11, 2004 allowed the same. The Commissioner of Income-tax (Appeals) held that since the amended provision did not exist in the statute during the relevant previous year, namely, the Financial Year 2000-01, the assessee's contention that it had no liability under Section 208 to pay advance tax was well-founded. The CIT (A) held that since the interest under Sections 234B and 234C was chargeable only where the assessee was liable to pay advance tax, the assessee could not be said to have been in default. j) Being dissatisfied, the Assessing Officer preferred an appeal before the Income-tax Appellate Tribunal and by the order impugned herein, the said Tribunal allowed the appeal holding that the appellant was liable to pay interest under Sections 234B and 234C. k) Hence this appeal under Section 260A of the Act. 4. A Division Bench of this Court at the time of admission of this appeal formulated the following substantial questions of law for determination: "(a) Whethe....
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.... quoted below: "234-B. Interest for defaults in payment of advance tax.-(1) Subject to the other provisions of this section, where, in any financial year, an assessee who is liable to pay advance tax under Section 208 has failed to pay such tax or, where the advance tax paid by such assessee under the provisions of Section 210 is less than ninety per cent of the assessed tax, the assessee shall be liable to pay simple interest at the rate of [one] per cent for every month or part of a month comprised in the period from the 1st day of April next following such financial year to the date of determination of total income under sub-section (1) of Section 143 [and where a regular assessment is made, to the date of such regular assessment, on an amount] equal to the assessed tax or, as the casemay be, on the amount by which the advance tax paid as aforesaid falls short of the assessed tax. [Explanation 1.-In this section, "assessed tax" means the tax on the total income determined under-sub-section (1) of Section 143 or on regular assessment as reduced by the amount of tax deducted or collected at source in accordance with the provisions of Chapter XVII on any income ....
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....erest was payable under sub-section (1) or sub- section (3) has been increased or reduced, as the case may be, the interest shall be increased or reduced accordingly, and- (i) in a case where the interest is increased, the Assessing Officer shall serve on the assessee a notice of demand in the prescribed form specifying the sum payable and such notice of demand shall be deemed to be a notice under Section 156 and the provisions of this Act shall apply accordingly; (ii) in a case where the interest is reduced, the excess interest paid, if any, shall be refunded. (5) The provisions of this section shall apply in respect of assessments for the assessment year commencing on the 1st day of April, 1989 and subsequent assessment years. "234-C. Interest for deferment of advance tax.-[(1) Where in any financial year,- (a) the company which is liable to pay advance tax under Section 208 has failed to pay such tax or- (i) the advance tax paid by the company on its current income on or before the 15th day of June is less than fifteen per cent of the tax due on the returned income or the amount of such advance tax paid on or before the....
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....hortfall is on account of underestimate or failure to estimate- (a) the amount of capital gains; or (b) income of the nature referred to in sub-clause (ix) of clause (24) of Section 2, and the assessee has paid the whole of the amount of tax payable in respect of income referred to in clause (a) or clause (b), as the case may be, had such income been a part of the total income, as part of the 15[remaining instalments of advance tax which are due or where no such instalments are due], by the 31st day of March of the financial year: [Provided further that nothing contained in this sub-section shall apply to any shortfall in the payment of the tax due on the returned income where such shortfall is on account of increase in the rate of surcharge under Section 2 of the Finance Act, 2000, as amended by the Taxation Laws (Amendment) Act, 2000 (10 of 2000), and the assessee has paid the amount of shortfall, on or before the 15th day of March, 2001 in respect of the instalment of advance tax due on the 15th day of June, 2000, the 15th day of September, 2000 and the 15th day of December, 2000:] [Provided also that nothing contained in this sub-section shall a....
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....he provisions of this Chapter, is [five thousand rupees] or more. "211. Instalments of advance tax and due dates.-1[(1) Advance tax on the current income calculated in the manner laid down in Section 209 shall be payable by- (a) all the companies, who are liable to pay the same, in four instalments during each financial year and the due date of each instalment and the amount of such instalment shall be as specified in Table I below: TABLE I Due date of instalment Amount payable On or before the 15th June Not less than fifteen percent of such advance tax. On or before the 15th September Not less than forty-five per cent of such advance tax, as reduced by the amount, if any, paid in the earlier instalment. On or before the 15th December Not less than seventy-five per cent of such advance tax, as reduced by the amount or amounts, if any, paid in the earlier instalment or instalments. On or before the 15th March The whole amount of such advance tax as reduced by the am....
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.... 12. In the case before us, the last date of the relevant Financial Year was March 31, 2001 and on that day, admittedly, the appellant had no liability to pay any amount of advance tax in accordance with the then law prevailing in the country. Consequently, the appellant paid no advance tax and submitted its regular return on October 31, 2001 within the time fixed by law wherein it declared its total income and the book profit both as nil. However, consequent to the amendment of the provisions contained in Section 115JB of the Act by virtue of Finance Act, 2002 which was published in the official gazette on May 11, 2002 giving retrospective effect to the amendment from April 1, 2001, the appellant first voluntarily paid a sum of Rs.1,55,62,511/- on account of the tax payable on book profit as provided in amended provision of Section 115 JB and then filed its revised return of March 31, 2003 declaring its business income as nil but the book profit under Section 115JB as Rs.20,63,65,711/-. The Assessing Officer accepted such return of income but imposed interest under Section 234B and 234C of the Act amounting to Rs.44,00,937/- and Rs.11,78,960/- respectively. 13. In our opinion....