PRINCIPAL COMMISSIONER OF INCOME TAX - 4 vs. M/S TORRENT PRIVATE LIMITED

Revenue is in appeal against the judgment of the Income   Tax   Appellate   Tribunal   dated   13.04.2018 raising following question for our consideration: “Whether the Appellate Tribunal has erred in law and on facts in granting relief to the assessee on levy of interest u/s.234B of the Act?”

For   the   assessment   year   2003­04,   the   assessee had filed the return of income.   The assessee was liable   to   pay   tax   on   the   book   profit   in   terms   of section 115JB of the Income Tax Act, 1961 ('the Act' for short). The Assessing Officer added the provision created by the assessee in respect of deminision in the value of investment relied on the amendment in C/TAXAP/1224/2018 ORDER section 115JB by Finance Act, 2 of 2009 but which was brought   with   retrospective   effect   from   01.04.2001. In the present case, we are not concerned with such addition but however, what we are concerned is with the   resultant   interest   charged   by   the   Assessing Officer   under   section   234B   of   the   Act   for   short payment of advance tax.

Commissioner   of   Income   Tax   (Appeals)   deleted such   interest   on   the   ground   that   the   liability   of additional tax has arisen on account of retrospective amendment   and   the   assessee   therefore   cannot   be expected to have paid advance tax on such income. The Revenue   carried   the   matter   in   appeal   before   the Tribunal and placed heavy reliance on the decision of Supreme   Court  in   case   of  Joint   Commissioner   of Income­Tax   v.   Rolta   India   Ltd.  reported   in  [2011] 330 ITR 470 (SC).  The Tribunal confirmed the view of Commissioner of Income Tax (Appeals) relying upon the judgment   of this   Court  in  case  of  Commissioner   of Income­Tax v. Vodafone Essar Gujarat Ltd. reported in [2017] 397 ITR 55 (Guj) [FB]. Hence, this appeal by the Revenue. C/TAXAP/1224/2018 ORDER

We   do   not   find   any   error   in   the   view   of   the Tribunal   as   facts   would   stand.     Liability   of   the assessee   for   additional   tax   arose   on   account   of retrospective amendment in section 115JB of the Act. It is undoubtedly true that Supreme Court in case of Rolta India Ltd. (supra) had held that interest under section   234B   would   be   payable   on   failure   to   pay income   tax   in   respect   of   the   tax   payable   under section   115JA   of   the   Act   (which   was   a   predecessor provision to section 115JB).

In this judgment, the question of such liability having arisen on account of retrospective amendment in the statute did not arise.  This Court in case of CIT v. National Dairy Development Board  reported in (2017) 397 ITR 543 (Guj) considered a situation where the assessee had paid the advance tax which was later on   found   insufficient   on   account   of   insertion   of explanation­6(6)   of   the   Act   by   Finance   Act,   2008, with retrospective effect from 01.04.2003. It was held that the assessee's computation on payment of advance tax was according to the provisions contained in   chapter­XVII   of   the   Act   in   absence   of retrospective amendment in section 43(6) of the Act, C/TAXAP/1224/2018 ORDER ANKIT SHAH