2012 (6) TMI 621

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.... JUDGMENT N. Kumar, J. - This appeal is admitted to consider the following substantial questions of law: (1) Whether the law declared by this Hon'ble Court in M/s. Kwality Biscuits holding that no levy of interest can be made under Section 234B & 234C of the Act when computation of total income is made under Section 115J of the Act can also be extended to computation of total income ma....

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....ion, has held as under: "(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 rate imposed for the financial year, as are contained in the Finance Act. As is clear from Section 207, the ....

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....y by virtue of amendment of Finance Act, 2002, a deeming provision was introduced by which 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 percent and retrospective effect is given from 01.04.2001. Therefore, prior to this amendment, the advance tax was pa....

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....at the liability to pay interest would only arise on default and it is in the nature of a quasi-punishment. Such liability although created retrospectively could not entail punishment by payment of interest with retrospective effect. By a catena of decisions, the Supreme Court has laid down that the payment of interest for delayed payment of tax is compensatory in nature. It is a suffered liabilit....