2026 (6) TMI 271

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....ACIT Circle 1(1)(2), Mumbai, u/s. 143(3) of the Income-tax Act (hereinafter referred to as the "Act"), dated 23.12.2018, for Assessment Year 2016-17. 2. Assessee has raised the following grounds of appeal: 1. The learned Commissioner of Income Tax (Appeals) erred in not adjudicating the ground of erroneous excess levy of interest under Section 234B of the Act. 2. The learned Commissioner of Income Tax (Appeals) erred in not directing the Assessing Officer to compute the advance tax liability as per the law which was in force at the time of the payment of the advance tax liability and in relying on a retrospective change in law after the end of the relevant previous year. 3. The Appellant Company denies the liab....

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....8,98,546/- in terms of section 209. Tax payable net of TDS was arrived at Rs. 31,08,44,165/-. Against this, advance tax of Rs. 25,00,00,000/- was deposited on 15.12.2015 with self-assessment tax of Rs. 6,85,00,000/- on 30.04.2016 and Rs. 7,45,00,000/- on 30.09.2016. 4.1. Subsequently, deferment of applicability of ICDS was announced which was much after the year had ended on 31.03.2016 and due dates for payment of advance tax liability had already passed. CBDT had announced for deferment of applicability of ICDS by one year in the month of July 2016 which were made applicable from Assessment Year 2017-18. Notification in this regard was issued by the Government on 29.09.2016. By taking the effect of this notification into account, assess....

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....n so as to work out its advance tax liability. We are in agreement with the submissions made by the assessee that it cannot be held to be a defaulter in payment of advance tax so as to levy of interest u/s. 234B thereupon. 5.1. Assessee has placed reliance on the ratio of decision of Hon'ble jurisdictional High Court of Bombay in the case of Prime Securities Ltd. vs. ACIT 333 ITR 464 (Bom). Hon'ble Court held, "liability to pay interest arises on failure of the assessee to pay advance tax under Section 208 or advance tax payable under Section 210 is paid less than 90%. Perusal of the provisions of Section 208 and 209 shows that for the purpose of payment of advance tax the assessee has to estimate his current income and then he ....

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....come of the assessee which would be chargeable in the assessment year immediately following that financial year. Relevant extracts in this regard from the said judgement is reproduced as under: "11. A mere reading of those provisions leaves no doubt that the advance tax is an amount payable in advance during a year in accordance with the provisions of the Act in res total income of the assessee which would be chargeable the assessment year immediately following that financial year. Thus, in order to hold an assessee liable for payment of advance liability to pay such tax must exist on the last date of advance tax as provided under the Act or at least on the financial year preceding the assessment year in such liability arises subse....