A.C.I.T. vs. GUJARAT STEEL TUBES LTD.

Facts

The assessee, Gujarat Steel Tubes Ltd., filed its return for Assessment Year 1990-91 on March 31, 1991, declaring a total income of Rs. 41,54,265. The Assessing Officer determined the total income and initiated interest charges. The CIT(A) allowed the assessee's appeal on November 17, 1992. The Revenue appealed to the Income Tax Appellate Tribunal (ITAT), which dismissed the Revenue's appeal on November 21, 2000. The Revenue then filed Tax Appeal No. 130 of 2001 before the Gujarat High Court against the ITAT's order.

Held

The High Court held that interest under Sections 234B and 234C of the Income-tax Act, 1961, is leviable in respect of tax determined on the basis of book profit under Section 115JA (and by extension, Section 115J). The Court relied on the Supreme Court's decision in Joint Commissioner of Income Tax v. Rolta India Ltd. and its own prior decision in CIT v. Nahar Spg. Mills Ltd. The reasoning was that Sections 115JA(4) and 115JB(5) stipulate that all other provisions of the Act shall apply to MAT companies, and amendments have been made for advance tax payments under these sections. The definition of 'assessed tax' includes tax determined under Section 115J/115JA in regular assessment. Therefore, there is no exclusion of Section 115J/115JA in the levy of interest under Section 234B. The substantial question of law was answered against the assessee and in favour of the revenue. The appeal was dismissed.

Key Issues

1. Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in law in upholding the order of the CIT(A) directing not to charge interest under Sections 234B and 234C of the Income-tax Act, 1961, since the total income was determined under Section 115J of the Act? Assessee's Contention: The judgment does not record any specific contentions made by the assessee before the High Court. However, the earlier orders indicate the assessee sought to avoid interest under Sections 234B and 234C when income was determined under Section 115J. Revenue's Contention: The Revenue contended that interest under Sections 234B and 234C is leviable even when the total income is determined under Section 115J, relying on judicial precedents.