2018 (10) TMI 1507

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....llowing substantial questions of law: "1. Whether on the facts and circumstances of the case, the Income Tax Appellate Tribunal was right in law in holding that interest u/s 234B and 234C is chargeable even if the income is computed u/s 115JA of Income Tax Act, 1961? 2. Whether on the facts and circumstances of the case, the Income Tax Appellate Tribunal was right in law in following the decision of the Madras High Court in the case of CIT V. Holiday Travels Pvt. Ltd.,, 263 ITR 307, when the Apex Court had already decided the issue in the case of CIT V. Kwality Biscuits Ltd., (2006) 284 ITR 434 contrary to the decision of the Madras High Court ?" 3. The learned counsels on either side submitted that the substantial ques....

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....ould be done only at the end of the financial year and hence the provisions of Sections 207, 208, 209 and 210 (predecessors of Sections 234B and 234C) were not applicable until and unless the accounts stood audited and the balance sheet stood prepared, because till then even the assessee may not know whether the provisions of Section 115J would be applied or not. The Court, therefore, held that the liability would arise only after the profit is determined in accordance with the provisions of the Companies Act, 1956 and, therefore, interest under Sections 234B and 234C is not leviable in cases where Section 115J applied. This view of the Karnataka High Court in Kwality Biscuits Ltd. was not shared by the Gauhati High Court in Assam Bengal Ca....

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...., it can be concluded that interest under Sections 234B and 234C shall be payable on failure to pay advance tax in respect of tax payable under Section 115JA/115JB. For the aforestated reasons, Circular No. 13/2001 dated 9.11.2001 issued by CBDT reported in 252 ITR(St.)50 has no application. Moreover, in any event, para 2 of that Circular itself indicates that a large number of companies liable to be taxed under MAT provisions of Section 115JB were not making advance tax payments. In the said circular, it has been clarified that Section 115JB is a self-contained code and thus, all companies were liable for payment of advance tax underSection 115JB and consequently provisions of Sections 234B and 234C imposing interest on default in payment ....