TaxTMI 
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2001 (1) TMI 203
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....92) 106 CTR (Bom) 78 (FB) : (1993) 199 ITR 351 (Bom) (FB) and Inawo Ltd. vs. CIT (1993) 204 ITR 313 (Bom). They further pointed out that the AO has not given any direction in the assessment order for levy of such interest under s. 234B. In the absence of any specific direction no such interest under s. 234B can be validly charged directly in the demand notice. The learned counsel placed reliance on the judgment of Hon'ble Patna High Court in the case of Uday Mistanna Bhandar & Complex vs. CIT (1997) 137 CTR (Pat) 376 : (1996) 222 ITR 45 (Pat). The learned counsel submitted a copy of the order passed by the Tribunal in the case of Ayush Ajay Construction Ltd. vs. ITO (2000) 69 TTJ (Ind) 579 : (2000) 111 Taxman 261 to support his contention. The learned counsel also submitted that interest charged under similar facts and circumstances has been deleted by the various Benches of the Tribunal (Ahmedabad) in the cases of Nirma Group. Copies of such orders passed by the Tribunal in the cases of Nirma Detergent Ltd., Nirma Chemical Works Ltd., Nirma Ltd., Nirma Management Services Ltd. order of the Tribunal in assessee's own case for asst. yr. 1991-92, orders in the cases of Harsiddh Speci....
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....ave been submitted at pp. 40 to 42 of the paper book. 25. The learned counsel submitted that it is not proper for any Bench of the Tribunal to state that the judgment of Hon'ble Patna High Court in the case of Uday Mistanna Bhandar & Complex was wrong in the absence of any contrary view by any other High Court. The learned counsel placed heavy reliance on the judgments reported in 180 ITR 722 (sic), (1983) GLH 273 (SC), CIT vs. L.G. Rama Murthi & Ors. 1977 CTR (Mad) 416 : (1977) 110 ITR 453, CIT vs. Goodlass Nerolac Paints Ltd. (1990) 90 CTR (Bom) 40 : (1991) 188 ITR 1 (Bom) and CIT vs. Sterling Foods (1999) 153 CTR (SC) 430 : (1999) 237 ITR 579 (SC) to explain the rules relating to judicial discipline. Shri Soparkar, the learned Advocate invited our attention to the judgment of Hon'ble Gujarat High Court in the case of CIT vs. Maganlal Mohanlal Panchal (HUF) (1994) 210 ITR 580 (Guj) in which it was held that the Tribunal is bound to follow sole judgment of different High Court. The judgment of Hon'ble Patna High Court in the case of Uday Mistanna Bhandar & Complex is the only judgment on the point in issue that no interest can be charged under ss. 234A, 234B in absence of a any s....
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....of this calculation sheet has been submitted by the assessee themselves at p. 42 of the paper book. 29. Shri Dave placed reliance on the decision of the Tribunal in the case of Travancore Titanium Products Ltd. vs. Dy. CIT (1995) 52 TTJ (Coch) 601 : (1996) 37 ITD 16 (Coch) and the decision of the Tribunal in the case of ITO vs. M.M. Subramania Muduliar (1998) 67 ITD 136 (Mad) (SMC) to support the validity of interest charged under s. 234B. 30. Shri Dave submitted a chart in which the relevant facts in the case of Ranchi Club Ltd. vs. CIT, Udai Mistanna Bhandar & Complex and Smt. Tej Kumari vs. CIT have been briefly stated. 31. He pointed out that the case of Ranchi Club Ltd. relates to asst. yr. 1991-92. The assessment order does not mention anything about the levy of interest. It has merely held that a sum of Rs. 1,58,000 described as "entrance fee" to be included in taxable income. In demand notice issued under s. 156 of the Act, the AO, however, included the sum of Rs. 78,322 being interest payable on tax due amounting to Rs. 69,434. The assessee contended that interest under s. 234A and s. 234B can be levied only on the amount of tax payable on the returned income and not on....
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....ed his liability to be assessed in respect of "entrance fee" of Rs. 1,58,000. Moreover, the Hon'ble Patna High Court has categorically held that "on these facts" it cannot be held that the assessee could anticipate that his claim for non-taxability of entrance fee received from the members will be held to be not exempt on the ground of mutuality. 33. In the case of Udai Mistanna Bhandar & Complex vs. CIT the AO had not even mentioned the section under which interest was chargeable. He simply mentioned "charge interest, if any". This is clearly distinguishable with the facts of the present case where the AO has specifically mentioned that ITNS-150 is enclosed. The ITNS-150 along with calculation-sheet annexed therewith not only shows that interest has been charged under s. 234B but it also gives complete details of the mode of calculating such interest. The cases of Ranchi Club Ltd. which were referred to larger Bench in the aforesaid judgment of Hon'ble Patna High Court reported in the case of Udai Mistanna Bhandar & Complex vs. CIT also did not contain the mention of specific section under which the interest was charged. The assessment order simply says "charge interest, if any" ....
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....-------------- Vidyapat Singhania vs. CIT (1977) 107 ITR 533 (All) 16-5-1973 National Products vs. CIT 1976 CTR (Kar) 179 : 18-3-1976 (1977) 108 ITR 935 (Kar) Bhikhoobhai N. Shah vs. CIT 1978 CTR (Guj) 172 : 7-9-1977 (1978) 114 ITR 197 (Guj) CIT vs. Lalit Prasad Rohini (1979) 8 CTR (Cal) 332 : 27-1-1978 Kumar (1979) 117 ITR 603 (Cal) CIT vs. Smt. Shanti Devi (1983) 139 ITR 152 (Cal) 10-11-1978 Jalan U.P. Hotel & Restaurants (1981) 20 CTR (All) 173: 28-10-1980 Ltd. vs. CIT (1981) 127 ITR 660 (All) Chandra Katha Industries vs. (1982) 29 CTR (All) 317 : 14-4-1982 CIT (1982) 138 ITR 168 (All) Central Provinces Mang. Ore (1986) 58 CTR (SC) 112 : 15-1-1986 Co. Ltd. vs. CIT (1986) 160 ITR 961 (SC) ---------------------------------------------------------------- Shri Dave submitted that appeal against levy of interest is not maintainable unless the assessee can deny his liability to be assessed in toto. He submitted that in order to properly understand the true meaning and scope of the expression "denial of liability", a useful reference can be made to the judgment of Hon'ble Allahabad High Court (in the case of CIT vs. Geeta Ram Kali Ram (1980) 15 CTR (All) 67 : (1980) 121 ITR 708 (All....
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....mostly arithmetical but generally time-consuming. If, therefore, the ITO first draws up an order assessing the total income and, indicating the adjustments to be made, directs the office to compute the tax payable on that basis and then approves of it, either immediately or some time later, no fault can be found with the process, though it is only when both the computation sheets are signed or initialed by the ITO that the process described in s. 143(3) will be completed. ITNS-150 is also a form for determination of tax payable and when it is signed or initialed by the ITO, it is certainly an order in writing by the ITO determining the tax payable within the meaning of s. 143(3). It may be only a tax calculation form for Departmental purposes as it also contains columns and code numbers to facilitate computerisation of the particulars contained therein for statistical purposes, but this does not detract from its being considered as an order in writing determining the tax payable by the assessee. There is no reason why this document, which is also in writing and which has received the imprimatur of the ITO, should not be treated as part of the assessment order in the wider sense in....
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....eal is maintainable [See (1986) 58 CTR (SC) 112 : (1986) 160 ITR 961 (SC) : 1998 CTR (Guj) 172 : (1978) 114 ITR 197 (Guj)] The Tribunal has taken a view in favour of assessee in ITA No. 4574/Ahd/1992 in the case of Norma Detergents (P) Ltd. and the Gujarat High Court has not even admitted the Departmental appeal on this ground though specifically raised. In view of this, it is not open to the Revenue to contend that such levy is not appealable. More so when the Ahmedabad Bench of Tribunal has already taken a view in the case of Vikashara Trading & Investment (P) Ltd. vs. Dy. CIT (1999) 63 TTJ (Ahd) 141 that such an order is an appealable order. The fact that the Patna High Court entertained the appeal does not mean that appeal does not lie because there is no restriction on the writ jurisdiction of the High Court that if appeal lies, the writ is not maintainable. As a matter of fact in the case of Uday Mishtanna Bhandar the High Court accepts specifically that such an issue is appealable as is obvious from para 8 of the judgment. '8. A preliminary objection was raised by Mr. Debi Prasad, learned counsel for the Revenue, that the petitioners in these cases could have questioned....
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....The judgments of Patna High Court as also Supreme Court of Uday Mishtanna Bhandar are directly on the point. They are the only direct judgments on this issue. If that be so, this Hon'ble Tribunal is bound to follow the same. 2. Kalyan Kumar's case does not deal with the controversy of interest all. 3. The Tribunal has taken a view in favour of assessee in ITA No. 4574/Ahd/1992 in the case of Nirma Detergents (P) Ltd. wherein the judgment of the Supreme Court in the case of Kalyankumar Ray was specifically cited by the Revenue and the Tribunal has distinguished the said judgment. It may be noted that in spite of this the Gujarat High Court has not even admitted the Departmental appeal on this ground though specifically raised. This makes it clear that Kalyankumar's case has no application to the facts of the present case. 4. In view of the fact that in a large number of cases of the group, the Tribunal has taken the view in favour of the assessee, it is submitted that, it would be improper, if not impermissible, for this Bench to take a view that all these decisions were wrong and in ignorance of a Supreme Court judgments so as to lose their binding force." 40. Shri Dave, the le....
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....hat the ratio of decision in the case of Ranchi Club Ltd. is not applicable to the facts and circumstances of the case under consideration as in the former case, the club had denied its liability to be assessed on the "entry fees" collected by the club from new members on the ground of principle of mutuality thus claiming absolute exemption under the Act of 1961. 6. In respect of the case of Nirma Detergent (P) Ltd. (ITA No. 4574/Ahd/92), kind attention of Hon'ble Members was drawn to para 28 of the order, in the course of hearing of this appeal, that the counsel of the appellant challenged the levy of interest under s. 234C and there was no argument against the observations of learned CIT(A) to the effect that charging of interest under s. 234B was consequential only. Yet, in para 30 at p. 13 of the order, Hon'ble Members involved the chargeability of interest under s. 234B which in respectful submission, was not warranted as in the course of arguments, the finding of learned CIT(A) on this point was not contested at all. This decision is available at p. 45 of assessee's paper book. The decision in the cases of (1994) 208 ITR 882 (Cal) of Hon'ble High Court of Delhi and of Vijayl....
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....on the assessed income after excluding the tax on additions made on the declared income, which honestly and bona fidely could not have been anticipated by the assessee during the contemporary period, when advance tax was required to be paid? 42. The additional ground sought to be raised by the assessee vide application dt. 27th Sept., 2000 relating to deletion of interest charged under s. 234B involves consideration of a legal point and, therefore, the same deserves to be entertained in view of the judgments reported in (1992) 106 CTR (Bom) 78 (FB): (1993) 199 ITR 351 (Bom) and (1994) 117 CTR (Bom) 93 : (1993) 204 ITR 312 (Bom) relied upon by the learned counsel, as well as the judgments of Hon'ble apex Court in the case of National Thermal Power Co. Ltd. vs. CIT (1999) 157 CTR (SC) 249 and Jute Corporation of India Ltd. vs. CIT & Anr. (1990) 88 CTR (SC) 66 : (1991) 187 ITR 688 (SC). In view of the aforesaid, the additional ground is entertained. 43. The next issue relates to applicability of the point relating to levy of interest under s. 234B. It is well settled law that appeal lies against levy of interest under various provisions of IT Act, such as interest under s. 234B prov....
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....e period commencing on the date immediately following the due date, and,- (a) where the return is furnished after the due date, ending on the date of furnishing of the return; or (b) where no return has been furnished, ending on the date of completion of the assessment under s. 144. On the amount of the tax on the total income as determined under sub-s. (1) of s. 143 or on regular assessment as reduced by the advance tax, if any, paid and any tax deducted or collected at source. Explanation 1.- In this section, 'due date' means the date specified in sub-s. (1) of s. 139 as applicable in the case of the assessee. Explanation 2.- In this sub-section, 'tax on the total income as determined under sub-s. (1) of s. 143' shall not include the additional income-tax, if any, payable under s. 143. Explanation 3.- Where, in relation to an assessment year, an assessment is made for the first time under s. 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-s. (1) of s. 143 or on regular assessment' shall, for the purposes of computing the interest paya....
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....sessee who is liable to pay advance tax under s. 208 has failed to pay such tax or, where the advance tax paid by such assessee under the provisions of s. 210 is less than ninety per cent of the assessed tax, the assessee shall be liable to pay simple interest at the rate of one and one-half per cent for every month or part of a month comprised in the period from the 1st day of April next following such financial year to the date of determination of total income under sub-s. (1) of s. 143 and where a regular assessment is made, to the date of such regular assessment, on an amount equal to the assessed tax or, as the case may be on the amount by which the advance tax paid as aforesaid falls short of the assessed tax. Explanation 1. In this section, 'assessed tax' means: (a) for the purposes of computing the interest payable under s. 140A, the tax on the total income as declared in the return referred to in that section, (b) in any other case, the tax on the total income determined under sub-s. (1) of s. 143 or on regular assessment, as reduced by the amount of tax deducted or collected at source in accordance with the provisions of Chapter XVII on any income which is subject to ....
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.... of demand in the prescribed form specifying the sum payable and such notice of demand shall be deemed to be a notice under s. 156 and the provisions of this Act shall apply accordingly: (ii) in a case where the interest is reduced, the excess interest paid, if any, shall be refunded. (5) The provisions of this section shall apply in respect of assessments for the assessment year commencing on the 1st day of April, 1999 and subsequent assessment years." (c) At the time of filing the return of income, such mandatory interest, if payable, is to be calculated on the basis of the returned income and paid along with tax on self-assessment under s. 140A at the Act. Explanation 4 to s. 234A (which relates only to levy of interest for default of delay or non-filing of the return of income and does not relate to s. 234B dealing with interest for nonpayment or underpayment of advance tax) provides that for the purposes of computing interest payable under s. 140A, the expression "tax on the total income as determined under sub-s. (1) of s. 143 or on regular assessment" used in sub-s. (1) of s. 234A will be deemed to be tax on total income as declared in the return. Sub-s. (2) of s. 234A pr....
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....as a result of an order of reassessment or recomputation under s. 147 of the Act. Sub-s. (4) provides automatic revision of interest where the amount of tax is varied as a result of an order of rectification, appeal, revision, etc. 45. The constitutional validity of the provisions of s. 234A, 234B and 234C has been challenged by way of writ petitions before various Hon'ble High Courts which have been confirmed by all the Hon'ble Courts. (a) The Hon'ble Patna High Court in the case of Ranchi Club Ltd vs. CIT (1996) 131 CTR (Pat) 368 : (1996) 217 ITR 72 (Pat) which has been approved by the Hon'ble apex Court in their judgment reported in (2000) 164 CTR (SC) 200, on which strong reliance has been placed by the assessee's counsels, has observed as under at p. 74: "I do not think there is any substance in the challenge in the vires of the provisions, for, as is evident from a plain reading of these provisions they are not penal in nature and, therefore, no element of arbitrariness or violation of rules of natural justice, as alleged, can be attached to them. They merely provide for payment of interest by an assessee who commits default in furnishing the return either under s. 139(1)....
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....because in actual application of these provisions there may be situations where an assessee may render himself liable to payment of interest under each one of these provisions simultaneously for the same period nor can the compensatory nature of the provisions be deemed to have been lost simply because in a given situation the provisions may, on account of their simultaneous application to an assessee, raise the liability to pay interest for the overlapping period to a rate higher than two per cent, per month. So long as the basic character of the levy remains compensatory the rate of interest which is levied either by the provisions itself or on account of its dual effect in a given situation will be wholly immaterial. The fact that for refunds due to an assessee from the Department on account of excess amount of tax paid the rate of interest applicable is lower than two per cent, or that different rates are prescribed for different situations covered by different statutory provisions does not show that the rate of interest prescribed under ss. 234A, 234B and 234C is either penal in character or that the same makes the provisions themselves penal. As a matter of fact the levy of ....
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....esent case. 48. The Hon'ble Patna High Court in the case of Uday Mistanna Bhandar & Complex vs. CIT has held as under: "From a bare reading of s. 156 of the IT Act, 1961, it is clear that the notice of demand claiming interest can be issued only when there is a specific order in the assessment order, levying interest. To use the expression 'charge interest, if any' or 'charge interest as per the rules' cannot be read to mean that the AO has passed orders to "charge interest under all the aforesaid sections". The order to charge interest has to be specified and clear, as for that matter, any order to charge any tax, penalty or fine. The assessee must be made to know that the AO after applying his mind has ordered charging of interest and under which section of the Act. A notice of demand is somewhat like a decree in a civil suit which must follow the order. When a judgment does not specify any amount to be charged under any particular section, the decree cannot contain any such amount. Similarly, when the assessment order is silent on whether any interest is leviable, the notice of demand under s. 156 of the Act cannot go beyond the assessment order and the assessee cannot be serv....
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....rest under s. 234B in ITNS-150 for levy of interest under s. 234B amounting to Rs. 12,39,696, which is also accompanied by such detailed computation sheet giving details of calculation of interest. 48.2. The facts of the case of Uday Mistanna Bhander & Complex are, therefore, clearly distinguishable with the facts of the assessee's case. The facts of the present case will have to be appreciated in the light of judgment of Hon'ble Supreme Court in the case of Kalyankumar Ray's case. In view of the aforesaid facts and discussions and keeping in view the fact that interest charged under s. 234B is mandatory, automatic and compensatory in nature, the levy of interest cannot be held to be invalid. 49. The last issue, which now requires our consideration is issue No. (d) mentioned in para 41 that whether interest under s. 234B can be charged on the tax on income declared in the return of income or on the assessed income or on the assessed income after excluding the tax on additions made in the declared income, which bona fidely and honestly could not have anticipated or predicted by the assessee at the time, when advance tax was required to be paid. The learned counsel placed reliance ....
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....t order is set aside or modified and it is held that the amount of "entrance fee" is not includible within the taxable income the levy of interest would also automatically go. But what will be the position if the order is not interfered with? The levy of interest would obviously stand. This writ petition cannot, therefore, be dismissed merely because an appeal against the assessment order has been preferred and is pending. Now the question is whether interest on the amount of tax found payable on the assessed income can be levied at this stage. From the facts mentioned hereinabove it is clear that there was no default in filing the return and payment of self-assessed/advance tax. The notice under s. 142(1) which is said to have been not complied with leading to the levy of interest, was sent after considering the show-cause filed by the petitioner pursuant to notice under s. 147/148 in the course of scrutiny of the return under s. 143(1)(a). In the aforesaid show-cause, the petitioner had taken a specific plea as to non-includibility of the amount of 'entrance fee'. As a matter of fact, in the written statement filed along with return itself a firm stand had been taken in that reg....
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.... any default in payment of advance tax under the provisions of s. 234B. Where, however, return is filed within time but a particular item of income is in dispute as being includible within taxable income or not the mere issue of notice under s. 142 will not confer jurisdiction upon the authority to levy interest. Sec. 234A no doubt also mentions about non-compliance with notice under s. 142(1). But it would appear that s. 142(1), which refers to the stage of enquiry before assessment, envisages two types of notice. It provides for notice to those who have already submitted the return under s. 139 to produce such accounts or documents as the AO may require or to furnish information on such points or matters as the AO may require. It also provides for notice to persons who have not filed the return within the time allowed under s. 139(1) to furnish the return of income. It is thus obvious that s. 142(1) envisages two types of notices. When s. 234A refers to the notice under s. 142(1) it obviously means notice to file the return of income in cases of non-filing. The object underlying s. 234A is to create additional liability to pay interest for the default in furnishing the return of ....
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....ve virtually amounted to renouncing its claim. On these facts the Hon'ble High Court held that it is difficult to hold that the petitioner committed default within the meaning of ss. 234A or 234B. The Hon'ble Patna High Court further observed that the judgment of Hon'ble Supreme Court in the case of J.K. Synthetics Ltd. would squarely cover cases of the present nature, although the context in which the Hon'ble Supreme Court rendered the decision in the case of J.K. Synthetics Ltd. was somewhat different. 52. It may be imperative here to refer to the judgment of Hon'ble Supreme Court in the case of CIT vs. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC) at p. 320 observed: "Such an interpretation would be reading that judgment totally out of context in which the questions arose for decision in that case. It is neither desirable nor permissible to pick out word or a sentence from the judgment of this Court, divorced from the context of the question under consideration and treat it to be the complete "law" declared by this Court. The judgment must be read as a whole and the observation from the judgment have to be considered in the light of the quest....
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....venue through the mode prescribed in the Act so the State should not be the sufferer on account of the delay caused by the taxpayer in payment of the tax due. The provision for charging interest would have been introduced in order to compensate the State (or the Revenue) for the loss occasioned due to delay in paying the tax [vide CIT vs. M. Chandra Sekhar (1985) 44 CTR (SC) 110 : (1985) 151 ITR 433 (SC): TC (1985) 1 SCC 283 and Central Provisions Manganese Ore Co. Ltd. vs. CIT (1986) 58 CTR (SC) 112 : (1986) 160 ITR 961 (SC) : (1986) 3 SCC 461. When interpreting such a provision in a taxing statute a construction which would preserve the purpose of the provision much be adopted. It is well-settled that in interpreting a taxing statute normally, there is no scope for consideration of principles of equity. It was so said by Powlatt, J. in Cape Brandy Syndicate vs. IRC (1921) 1 KB 65 at p. 71: 'In a taxing statutes one has to look merely at what is clearly said. There is no room for any a intendment. There is no equity about a tax. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.' 11. The above o....
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....8) 4 SCC 271. On the strength of the said decision M/s J. Synthetics Ltd. was required to pay sales-tax on the sale price inclusive of the freight. The dispute then arose whether the company should pay interest from the date of filing of the returns or only from the date of determination of tax payable in the final assessment. Revenue then contended that interest became payable from the date on which the original return was filed under s. 7(2) or 7(2A) of the Rajasthan Sales-tax Act, 1954. The said contention was based on another earlier decision of a Bench of three Judges of this Court in Associated Cement Co. Ltd. vs. CTO (1981) 48 STC 466. A majority of Judges held in that case that interest would run from the date of filing of returns. Ahmadi, J. (as his Lordship then was) speaking for the Construction Bench in J.K. Synthetics Ltd. case (1994) 94 STC 422 held thus: 'When s. 11B(a) uses the expression "tax payable under sub-s. (2) and (2A) of s. 7" that must be understand in the context of the aforesaid expressions employed in the two sub-sections. Therefore, the expression 'tax payable' under the said two sub-sections is the full amount of tax due and 'tax due' is that amount ....
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....ute whether the freight paid would also form part of the sale amount. It was a highly debated dispute whether price amount would envelope the freight charges paid by the dealer and until the controversy was resolved by the Court in Hindustan Sugar Mills Ltd. vs. State of Rajasthan (1979) 43 STC 13 (SC) : (1978) 4 SCC 271 the dealers were justified in excluding the freight charges from sale price. It was for the reason the Constitution Bench refrained from mulcting the taxpayer with liability to pay interest additionally. Appellants in these cases have never disputed that they are liable to pay tax on the turnover under s. 68 of the Act even while they focussed on the vires of that provisions. 16. The tax amount which they should have paid as per s. 68 remained with the appellant during the entire period and they would have earned good profit with that amount. The State, to which the tax amount should be necessarily have gone, was not able to utilise it for public purposes. When appellants had the advantage of keeping the amount of tax without paying it to the State exchequer only because the High Court granted orders restraining the State from recovering that amount from the asses....
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....he Act. 56.1. The Hon'ble Patna High Court in the aforesaid case of Ranchi Club cancelled the levy of interest under s. 234A and 234B in view of the fact that it was impossible to expect the assessee to include the sum of Rs. 1,58,000 being the amount of entrance fee received from new members in its taxable income at the time of filing the return or payment of advance tax, as they were claiming it to be not liable to tax on the principle of mutuality since last 10 years and such claim of exemption was supported by judgment of Full Bench of Patna High Court in their own case reported in (1992) 100 CTR (Pat) 295 : (1992) 1996 ITR 137 (Pat)(FB). Apart from this, the Hon'ble High Court also examined the impact of Expln. 4 to s. 234A held that interest is leviable on the tax on the total income "as declared in the return" and not on the total income as determined. The relevant extracts from the said judgment are reproduced once again hereunder: "From Expln. 4 appended to s. 234A, quoted above, it is clear that interest is leviable on the tax on the total income as declared in the return" and not on the total income as determined." "The object underlying s. 234A is to create additiona....
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....g of the return and short-payment of advance-tax. Such interest of 48 per cent p.a. is not an allowable expenditure also. The rate of such interest has now been reduced to 18 per cent p.m. in each of these sections i.e. aggregate levy of interest of overlapping period under s. 234A and 234B will be 36 per cent per year w.e.f. 1st June, 1999. Such double levy of interest @ 24 per cent p.a. aggregating to 48 per cent p.a. under s. 234A and 234B for the same overlapping period of delay in filing of the return has to some extent been mitigated by the aforesaid interpretation of Expln. 4 to s. 234A made by the Hon'ble Patna High Court as affirmed by the Hon'ble Supreme Court. 58. However, in the present case, there is no default of delay in filing of the return and the question of levy of interest under s. 234A is not in dispute. We are presently concerned only with the levy of interest under s. 234B of the Act. As already discussed hereinabove the Hon'ble Patna High Court in the case of Ranchi Club and affirmed by Hon'ble Supreme Court have specifically observed that "on these facts" it is difficult to hold that the petitioner committed default within the meaning of ss. 234A and 234B.....
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....rt in the case of Ranchi Club Ltd. as affirmed by the Hon'ble Supreme Court. These judgments, in our humble view, reaffirms the well known principles of law canonized in the well-known common law dictum "Lexnoncogit ad Impossibilia" i.e. law cannot compel any one to do the impossible. 59. But the aforesaid judgment in the case of Ranchi Club or other judgments discussed hereinbefore cannot be read as interpreted to mean that in all situations and in all circumstances, interest under s. 234B cannot be levied with reference to tax assessed on regular assessment/reassessment, etc. and will necessarily have to be restricted in all cases with reference to tax on income declared in the return of income. Such an interpretation or reading of the above referred judgments, divorced from the context and facts, will defeat the manifest object and purpose of enacting such clear, widely worded elaborate provisions contained in each of the sub-sections of s. 234B of the Act. It may be imperative here to once again refer to the ratio of judgment of Hon'ble Supreme Court in the case of Calcutta Jute Manufacturing Co. vs. CTO. The Hon'ble apex Court while distinguishing the judgment in the case of ....