AI Drafter 
TaxTMI 
TaxTMI 
2013 (10) TMI 1025
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....liability came to Rs. 14,82,941. We may recall that out of such amount, he had already paid a sum of Rs. 10 lakhs towards tax before the due date of filing of return. 2.3 The Revenue demanded interest under section 234A of the Act for the entire amount of Rs. 14,82,941. The case of the assessee, however, is that he having already deposited a sum of Rs. 10 lakhs before the due date of filing of return, interest under section 234A can be charged only on the remaining amount of Rs. 4,82,941 and not on the total sum of Rs. 14,82,941. This in a nut-shell is the controversy between the petitioner and the respondent. We may record that in the petition, the petitioner had also questioned the liability to pay interest of Rs. 82,303 under section 234C of the Act. However, while pursuing this petition, the petitioner had also parallely appealed to the Commissioner seeking waiver of interest. The Commissioner, during the pendency of this petition, passed an order on July 25, 2003, a copy of which is produced along with the affidavit of the respondent dated July 31, 2003, in which the Commissioner gave substantial relief to the petitioner on the interest demanded under section 234C of the....
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.... covered under section 234A of the Act. The assessee, therefore, cannot escape the liability to pay interest under the said section. Counsel pointed out that the decision of the Delhi High Court in the case of Dr. Prannoy Roy [2002] 254 ITR 755 (Delhi) was brought to the notice of this court in the case of Roshanlal S. Jain v. Deputy CIT (Assessment) [2009] 309 ITR 174 (Guj). This court, however, found itself unable to adopt the view of the Delhi High Court and upheld the interest liability under section 234A of the Act. 5.1 Counsel relied on a decision of a five-judge Bench of the apex court in the case of CIT v. Anjum M. H. Ghaswala [2001] 252 ITR 1 (SC) to contend that charging of interest under section 234A is mandatory. Counsel pointed out that the decision in the case of Anjum M. H. Ghaswala [2001] 252 ITR 1 (SC) was referred to and relied upon in a subsequent decision of a three-judge Bench of the apex court in the case of CIT v. Damani Brothers [2003] 259 ITR 475 (SC) for rejecting the assessee's contention that charging of interest under sections 234A, 234B and 234C would amount to double levy of interest. 5.2 Relying on a decision in the case of State of U. P. v. Synth....
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.... income as determined under sub-section (1) of section 143 or on regular assessment as reduced by the advance tax, if any, paid an any tax deducted or collected at source. Explanation 1.-In this section, 'due date' means the date specified in sub-section (1) of section 139 as applicable in the case of the assessee. Explanation 2.-In this sub-section, 'tax on the total income as determined under sub-section (1) of section 143' shall not include the additional income-tax, if any, payable under section 143. Explanation 3.-Where, in relation to an assessment year, an assessment is made for the first time under section 147, the assessment so made shall be regarded as a regular assessment for the purposes of this section. Explanation 4.-In this sub-section, 'tax on the total income as determined under sub-section (1) of section 143 or on regular assessment' shall, for the purposes of computing the interest payable under section 140A, be deemed to be tax on total income as declared in the return. (2) The interest payable under sub-section (1) shall be reduced by the interest, if any, paid under section 140A towards the interest chargeable under this section. (3) Where th....
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....said case, the assessee had made the entire payment of tax before the due date. However, he had failed to file the return within the time prescribed. The Revenue demanded interest under section 234A of the Act for non-filing of return within the due date. Ultimately, when the issue reached the Delhi High Court, the High Court upheld the contention of the assessee and rescinded the interest demand, inter alia, observing that tax had been paid although no return was filed. The Revenue, therefore, had not suffered any monetary loss. The High Court further observed as under (page 770) : "We, therefore, are of the opinion that in this case if the doctrine of purposive construction is not taken recourse to, the same would betray the purport and object of the Act. If the aforementioned construction is not resorted to, we will have to read a penal provision in section 234A, which was not and could not have been the object of the law for the reasons stated hereinbefore." The said decision of the Delhi High Court in the case of Dr. Prannoy Roy [2002] 254 ITR 755 (Delhi) was questioned before the apex court by the Revenue. The apex court, by a short, but speaking order upheld the dec....
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....the Gujarat High Court, when showed the decision of the Delhi High Court in the case of Dr. Prannoy Roy [2002] 254 ITR 755 (Delhi), took a different view in the case of Roshanlal Jain [2009] 309 ITR 174 (Guj). It is also true that this court in the case of Roshanlal Jain [2009] 309 ITR 174 (Guj) had given detailed reasons for coming to such conclusion. The court was of the opinion that the provisions contained in sections 234A and 234B are not only valid, but they operate in different fields. By a conscious decision, giving detailed reasons, this court differed from the view expressed by the Delhi High Court in the case of Dr. Prannoy Roy [2002] 254 ITR 755 (Delhi). We may, however, notice that unfortunately, the decision of the apex court in the case of CIT v. Pranoy Roy [2009] 309 ITR 231 (SC) confirming the view of the Delhi High Court was not brought to the notice of the Gujarat High Court when the decision in the case of Roshanlal Jain [2009] 309 ITR 174 (Guj) was rendered. We may record that the apex court rendered its decision in the case of CIT v. Pranoy Roy [2009] 309 ITR 231 (SC) on September 17, 2008, while this court in the case of Roshanlal Jain [2009] 309 ITR 174 (Guj....
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....decision is binding not because of its conclusion but in regard to its ratio and the principles, laid down therein'. Any declaration or conclusion arrived without application of mind or preceded without any reason cannot be deemed to be declaration of law or authority of a general nature binding as a precedent. Restraint in dissenting or overruling is for sake of stability and uniformity but rigidity beyond reasonable limits is inimical to the growth of law." In the present case, however, we do not find that the Delhi High Court while rendering the decision in the case of Dr. Prannoy Roy [2002] 254 ITR 755 (Delhi) ignored any of the earlier binding decisions of the same or superior court. The decision in the case of Anjum M. H. Ghaswala [2001] 252 ITR 1 (SC) rendered by the apex court laid down that charging of interest under sections 234A, 234B and 234C, etc., is mandatory in nature. However, the question which the Delhi High Court was considering in the case of Dr. Prannoy Roy [2002] 254 ITR 755 (Delhi) did not arise before the apex court in the case of Anjum M. H. Ghaswala [2001] 252 ITR 1 (SC). Similarly, in the case of Damani Brothers [2003] 259 ITR 475 (SC) the apex court ....