TaxTMI 
TaxTMI 
TaxTMI 
2016 (11) TMI 1011
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....,92,63,136 was disallowed u/s.14A r/w.Rule 8D as the expenditure incurred for earning income exempt under the Act and same was added to the total income. (3) Expenditure incurred of Rs. 2,45,00,000/- in promoting the MRF Pace Foundation as advertisement expenditure for promotion of company brand image was disallowed as not for purpose of business and being of charitable nature. (4) Deduction under Chapter VIA, Rs. 19,19,096 u/s.80JJAA and Rs. 1,17,500 u/s.80G, was denied to the appellant as it did not appear in the e-return even though the tax is computed on the total income after considering the Chapter VIA deduction. (5) Additional TDS claim of Rs. 4,20,981/- for TDS certificates filed during the course of assessment was denied to the appellant. (6) Interest u/s.234C was determined at Rs. 86,31,067 in the Assessment Order as against Rs. 68,87,057 in the Return." 3. While completing the assessment, the Deputy Commissioner of Income Tax, Large Tax Payer Unit, Chennai, respondent herein, disallowed the expenses on amortization of amount paid in respect of leasehold land, disallowance under Section 14A and advertisement expenditure, amounting to Rs. 4,47,10,282/-. The assess....
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....el for the appellant further submitted that advance tax was paid by the Company, on its current income, on or before the dates specified in Section 234(C) of the Act. He further submitted that the first two installments of advance tax have already been made on the income. On 21.09.2006, the Hon'ble Supreme Court rendered a decision, in favour of the assessee and that the said income earned could not be included, for the purpose of computation and payment of advance tax. 8. Placing reliance on a decision in Prime Securities Ltd., v. Assistant Commissioner of Income Tax (Investigation) reported in 2011 (333) ITR 464, learned counsel for the appellant further submitted that when there was no possibility for the appellant to anticipate the events that would take place, in the next financial year, and when advance tax was paid by the Company, on its current income, levy of interest under Section 234C is liable to be set aside, which according to him, the authorities, including the ITAT, have failed to do so. 9. According to the learned counsel for the appellant, Section 234(C) cannot be blindly applied, but it should be interpreted and applied to the case on hand, on the same reas....
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.... she contended that the said decision is not applicable to the instant case. She further submitted that the logic and reasoning in Prime Securities Ltd.'s case (cited supra), cannot be made applicable to cases, arising under Section 234(B) or 234(C) of the Income-Tax Act, 1961, for the reason that payment of advance tax, on the current income of the financial year, has to be made and if there is any failure to pay advance tax on such current year income, then the assessee is liable to pay interest for deferment. She also submitted that in a recent decision in Commissioner of Income-Tax, Delhi v. Bhagat Construction Co. (P) Ltd., reported in 2015 (60) TAXMANN 334 (SC), the Hon'ble Supreme Court held that levy of interest, is automatic and therefore, the decisions relied on by the learned counsel for the appellant, would not lend any support. 14. Placing reliance on the order of the CBDT, dated 26.06.2006, learned counsel for the respondent further submitted that the assessee could have approached the Chief Commissioner of Income-Tax or the Director General of Income-Tax either for reduction or waiver and in the instant case, it was not done. 15. Learned counsel for the res....
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....le Apex Court in 247 ITR 209, as well as J.K. Synthetics 119 CTR 222. These decisions deal only with shortfall in advance tax on the assessed income and not on returned income. The argument that the assessee cannot anticipate the acceptance of return, was only in the context in assessment. According to him, the Hon'ble Apex Court merely reiterated the provisions of section 234B, that interest should be calculated on shortfall and this should be viewed in the context of issue under appeal before the Hon'ble Apex Court. He further submitted that there is no dispute sec 234C is also mandatory, but the dispute is only on computation. 18. Learned counsel for the appellant further submitted that the decisions relied upon by revenue were rendered in the context of Section 234B of the Act and in these decisions, the Courts were not called upon to decide, as to whether the unexpected income during the year can be excluded. According to him, there cannot be shortfall in payment of advance tax, due to unanticipated income, in so far as Section 234B is concerned, as payment of advance tax upto the last day of previous year, is taken into account for section 234B. Hence the receipt of ....
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....ompany shall be liable to pay simple interest at the rate of one per cent per month for a period of three months on the amount of the shortfall from fifteen per cent or forty-five per cent or seventy-five per cent, as the case may be, of the tax due on the returned income; (ii) the advance tax paid by the company on its current income on or before the 15th day of March is less than the tax due on the returned income, then, the company shall be liable to pay simple interest at the rate of one per cent on the amount of the shortfall from the tax due on the returned income: Provided that if the advance tax paid by the company on its current income on or before the 15th day of June or the 15th day of September, is not less than twelve per cent or, as the case may be, thirty-six per cent of the tax due on the returned income, then, it shall not be liable to pay any interest on the amount of the shortfall on those dates; (b) the assessee, other than a company, who is liable to pay advance tax under section 208 has failed to pay such tax or, (i) the advance tax paid by the assessee on his current income on or before the 15th day of September is less than thirty per cent of the....
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....ore 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 15th day of December, 2000. Explanation. In this section, tax due on the returned income means the tax chargeable on the total income declared in the return of income furnished by the assessee for the assessment year commencing on the 1st day of April immediately following the financial year in which the advance tax is paid or payable, as reduced by the amount of,- (i) any tax deductible or collectible at source in accordance with the provisions of Chapter XVII on any income which is subject to such deduction or collection and which is taken into account in computing such total income; (ii) any relief of tax allowed under section 90 on account of tax paid in a country outside India; (iii) any relief of tax allowed under section 90A on account of tax paid in a specified territory outside India referred to in that section; (iv) any deduction, from the Indian income-tax payable, allowed under section 91, on account of tax paid in a country outside India; and (v) any tax credit allowed to be set off in accordance with the provisi....
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....ch of this Court, at Paragraph 7, held as follows: "7. A combined reading of the above provisions makes it clear that the assessee has to pay taxes in advance in respect of the total income of the assessee, which would be chargeable in a particular assessment year. Now before the introduction of Section 35DDA, the legal dictum was very clear that the assessee could claim expenditure incurred on account of payment made for VRS by the assessee in view of the binding decisions of the Hon'ble jurisdictional High Court in the case of CIT v. George Oakes Ltd., [(1992) 197 ITR 288 (Mad.)] and CIT v. Simpson & Company Ltd., [(1998) 230 ITR 794 (Mad.)]. In both the decisions, it was clearly laid down by the Hon'ble jurisdictional High Court that payments to employees under VRS were in the nature of business expenditure and was deductible under Section 37. Therefore, till the introduction of new provisions under Section 35DDA, the assessee could have estimated the income legitimately after reducing the expenditure incurred on VRS. It is a common knowledge that Finance Bill is introduced on 28th February and the same is made into the Act after passing the bills in both the Houses of....
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....el you to do the impossible". In the instant case, it is the contention that, the assessee could not visualize the decision rendered by the Hon'ble Supreme Court, in favour of the assessee and thus, computed the income, for payment of advance tax, in the quarterly installments, upto 2nd installments and therefore, levy of interest under Sections 234(B) and 234(C), has to be set aside. Whereas, it is the case of the Revenue that retrospective operation of the Act, from 01.04.2001, in the reported judgment, for the assessment year 2001-02, was the consideration and therefore, the said decision is not applicable. Question in the reported case was, whether, assessee therein has to pay advance tax or not. Whereas, in the case on hand, assessee has paid the advance tax, upto 2nd installment, and the contention is that assessee could not anticipate the event of a judgment, rendered in its favour and thus, there is no fault, in computation of income and consequently payment of advance tax. 23. In Prime Securities Ltd., v. Assistant Commissioner of Income-Tax (Investigation) reported in 2011 (333) ITR 464, the assessee filed a return of income for the year 1991-92, declaring the total ....
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....that levy of interests under section 18A(6) or section 18A(8) of the 1922 Act or levy of interest under section 215 of the Act is not appealable but in the appeal against a regular assessment, it is open to the assessee to take every contention which, if accepted, must result in the Income-tax Officer holding that there was no liability to pay advance tax and, therefore, there was no liability to pay penal interest. In other words, it is open to an assessee to contend in the appeal against an order of assessment that he is not liable to pay any advance tax at all or the amount of advance tax determined as payable by the Income-tax Officer is not correct; but if the assesee does not dispute the amount of advance tax determined as payable by the Income-tax Officer, he merely cannot object to the levy of penal interest or question its quantum. The levy of penal interest under section 139 or section 215 is made in the regular assessment order; the demand issued pursuant to the assessment order is for the total amount of liability imposed inclusive of tax and interest. While levy of penal interest under section 18A of the 1922 Act up to 1st April 1952, was automatic as was noticed by....
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....oner of Income-tax in the exercise of his revisional jurisdiction. But before the revisional jurisdiction of the Commissioner of Income-tax c an be invoked in such a case, it is obviously necessary for the assessee to demonstrate before the Income-tax Officer that there is a case for waiving or reducing the levy of interest. We do not find from the record before us that any such attempt was made by the assessee. Since the statute provides for the waiver or reduction of interest it is open to the Income-tax Officer before imposing a levy under sub-s. (8) of s. 139 and to the Inspecting Assistant Commissioner before doing so under s. 215 to issue notice to the assessee and hear him in the matter. In cases where the jurisdictional fact attracting the levy cannot be disputed, for example that the return has been furnished under s. 139 with delay, it will be a quest ion merely of satisfying the relevant authority that there are circumstances calling for a reduction or waiver of the interest. If an opportunity to do so has not been made available to the assessee before the order levying interest is made, it will be open to the assessee to apply to the Income-tax Officer after such orde....
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....facts of the present case are squarely covered by the decision contained in Kalyankumar Ray v. CIT [(1991) 191 ITR 634 (SC)] inasmuch as it is undisputed that Form I.T.N.S. 150 contained a calculation of interest payable on the tax assessed. This being the case, it is clear that as per the said judgment, this Form must be treated as part of the assessment order in the wider sense in which the expression has to be understood in the context of Section 143, which is referred to in Explanation 1 to Section 234B. [Para 9]" 26. As per the provisions of the Income Tax Act, 1961, advance tax has to be paid in installments, on the specified dates, and during the financial year. As per the provisions, in the case of deferment, in payment of installment of advance tax i.e. failure to pay the amount of advance tax or shortfall, as stipulated in Section 211 of the Income Tax Act, 1961, interest, is attracted under Section 234C of the Act. Going through the provisions, it could be seen Sections 234A, 234B and 234C have been inserted in the Act to provide for a mandatory charging of interest. If there is default or deferment of payment of advance tax as required under Sections 208 to 211, intere....
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.... above judgment makes it clear whatever be the reason, when there is deferment in payment of advance tax, and if the stipulated amount has not been paid on the required date, as per Section 211 of the Act, then the consequences follow automatically and compensatory interest under Section 234C becomes payable. Section 234C is a complete code in itself and proviso to sub-section (1) to Section 234C only provides has two exceptions, when deferment or shortfall in the payment of installment of advance tax can be condoned, where there is under estimate or failure to estimate on account of capital gains or income by way of winnings from lottery, cross word, puzzles etc. Section 234(C) provides no other exception. 29. As stated supra, the assessee has to pay tax in advance, in respect of total income which would be chargeable to tax for the assessment year immediately following the financial year. The assessee has to estimate the income and pay the tax in three installments, as stated above. The fact that an unanticipated income accrued in the last financial year, cannot be a ground not to pay advance tax with regard to the returned income, which includes the total income, on which tax i....