TaxTMI 
TaxTMI 
2011 (8) TMI 268
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....tion came to be rejected. Aggrieved by the same, the assessee preferred an appeal to the Commissioner of Income-tax (Appeals). The assessee's contention was accepted. The appeal came to be allowed and the interest charged was deleted. Aggrieved by the same, the revenue preferred an appeal to the Tribunal, which came to be dismissed affirming the order of the Appellate Commissioner. Aggrieved by the same, the revenue is in appeal. 4. The appeals were admitted to consider the following substantial questions of law: "(i) Whether the analogy applied for interpreting section 115J can be applied for interpreting the provisions of section 115JB? (ii) Whether sections 234B and 234C are not attracted if the income is computed by applying the provisions of section 115JB? (iii) Whether the decision of Kwality Biscuits Ltd. v. CIT [2000] 243 ITR 519 is rightly applied to the facts of the case by the First Appellate Authority and the Tribunal? (iv) Whether the decision of CIT v. Holiday Travels (P.) Ltd. [2003] 263 ITR 307 and Itarsi Oils & Flours (P.) Ltd. v. CIT [2001] 250 ITR 686 would be applicable to the facts of the case." 5. We have h....
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.... (1) of section 115JB reads as under:- "115JB. (1) Notwithstanding anything contained in any other provision of this Act, where in the case of an assessee, being a company, the income-tax, payable on the total income as computed under this Act in respect of any previous year relevant to the assessment year commencing on or after the 1st day of April, 2001, is less than seven and one-half per cent of its book profit, [such book profit shall be deemed to be the total income of the assessee and the tax payable by the assessee on such total income shall be the amount of income-tax at the rate of seven and one-half per cent]." This provision was introduced by the Finance Act, 2000, which came into effect from 1-4-2001. 11. Clause (8) of sub-section (3) of section 2 of Finance Act, 2000 which deals with rate of tax reads as under:- "8. Subject to the provisions of sub-section (9), in cases in which income-tax has to be charged under sub-section (4) of section 172 or sub-section (2) of section 174 or section 175 or sub -section (2) of section 176 of the Income-tax Act or deducted under section 192 of the said Act from income chargeable under the head "Salaries" or in which the....
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....re not making advance tax payments. It may be emphasized that the new provision of section 115JB is a self-contained code. Sub-section (1) lays the manner in which income-tax payable is to be computed. Sub-section (2) provides for computation of "book profit". Sub-section (5) specifies that save as otherwise provided in this section, all other provisions of this Act shall apply to every assessee, being a company mentioned in that section. In other words, except for substitution of tax payable under the provision and the manner of computation of book profits, all the provisions of the Act including the provision relating to charge, definitions, recoveries, payment, assessment, etc. would apply in respect of the provisions of this section. 3. The scheme of the Income-tax Act also needs to be referred to. Section 4 of the Income-tax Act charges to tax the income at any rate or rates which may be prescribed by the Finance Act every year. Section 207 deals with the liability for payment of advance tax, and section 209 deals with its computation based on the rates in force for the financial year, as are contained in the Finance Act. The rates of tax are provided in the Finance Act. Th....
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....lied for computing the tax liability. If those components are not clearly and definitely ascertainable it is difficult to say that the levy exists in point of law. Any uncertainty or vagueness in the legislative scheme defining any of those components of the levy will be fatal to its validity." 16. Section 4 of the Income-tax Act deals with the charge of Income-tax at the rate, which may be prescribed by the Finance Act of every year. Section 207 deals with the liability for payment of advance tax and section 209 deals with its computation based on the rates imposed for the financial year, as are contained in the Finance Act. As is clear from section 207, the advance tax was payable on the total income of the assessee which would be chargeable to tax for the assessment year immediately following the financial year. Prior to amendment insofar as payment of advance tax by the companies is concerned, section 115JB provided that the tax is payable on the total income as computed under this Act in respect of any previous year relevant to the assessment year commencing on or after 1st April of 2001 is less than seven and one-half per cent of its book profit and the tax payable for the....