THE COMMISSIONER OF INCOME TAX -13, MUMBAI vs. SHRI. MANOJKUMAR BERIWAL

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ITXA/85/2008HC Bombay26 June 2008Bench: HON'BLE SHRI JUSTICE F.I. REBELLO, HON'BLE SHRI JUSTICE K.U. CHANDIWAL3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the Tribunal was correct in its view. The court reasoned that Section 249(4) of the Income Tax Act uses the expression "tax dues". The definition of 'tax' in Section 2(43) of the Act does not include interest. Interest is independently referred to under Section 2(28A). When the legislature uses distinct expressions and defines them separately, courts are bound to refer to these definitions for interpretation, aiming for a harmonious construction unless the context dictates otherwise. Therefore, the expression 'tax' for the purpose of Section 249(4) does not include interest. The court also found support for this view in the Supreme Court's decision in Harshad Shantilal Mehta v. Custodian and Others, which held that penalty and interest are different concepts from tax and are not included in the definition of tax. The High Court confirmed the view taken by the Tribunal. The appeal was disposed of accordingly.

What were the facts?

The Commissioner of Income Tax (Revenue) filed an appeal before the Bombay High Court against an order of the Income Tax Appellate Tribunal (ITAT). The appeal concerned Assessment Year(s) not specified. The ITAT had held that for the purposes of Section 249(4) of the Income Tax Act, 1961, the deposit of tax dues did not include interest under Sections 234B and 234C. The Revenue contended that tax should include interest, and if so, the assessee had not deposited the entire amount, thus the appeal before the ITAT ought not to have been entertained. The High Court admitted the appeal on a specific question of law.

What were the issues?

1. Whether, in the facts and circumstances of the case and in law, the Tribunal is right in holding that for the purposes of Section 249(4) of the Act, the deposit of tax, which is a condition precedent, does not include interest under Sections 234B & 234C of the Act? Assessee's Contention: The judgment does not record specific arguments made by the assessee's counsel, other than bringing to the court's attention the Supreme Court judgment in Harshad Shantilal Mehta. The assessee's counsel relied on this judgment to support the view that tax does not include interest or penalty. Revenue's Contention: The Revenue argued that the term 'tax' under Section 249(4) should include interest. They contended that if both tax and interest are considered, the assessee had not deposited the entire amount, and consequently, the ITAT ought not to have entertained the appeal.

Which sections of the Income-tax Act were involved?

Section 249(4),Section 2(43),Section 234B,Section 234C,Section 2(28A)

AI-generated summary — verify with the full judgment below

HVN IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION ORDINARY ORIGINAL CIVIL JURISDICTION ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO. 85 OF 2008 The Commissioner of Income Tax ... Appellant Versus Shri.Manojkumar Beriwal ... Respondent Mr.A.S. Rao for the Appellant. Dr. K. Shivram with Mr. A.R. Singh for Respondent. CORAM: F.I. CORAM: F.I. CORAM: F.I. REBELLO REBELLO REBELLO & K.U.CHANDIWAL,JJ. K.U.CHANDIWAL,JJ. K.U.CHANDIWAL,JJ. DATED: JUNE 26, 2008 DATED: JUNE 26, 2008 DATED: JUNE 26, 2008 ORAL JUDGMENT (Per F.I. Rebello,J.): . Having heard the parties, the appeal is admitted on question (b) as framed in Para 4 of the Appeal memo which is as under : "Whether in the facts and circumstances of the case and in law,the Tribunal is right in holding that for the purposes of Sec. 249(4) of the Act, the deposit of tax, which is a condition precedent, does not include interest U/sec. 234 B & C of the Act?" . The learned tribunal while considering the issue relied upon decisions of the Tribunal and arrived at the conclusion that the word "Tax" under Section 249(4) includes only tax and not interest. On behalf of the Revenue, the learned counsel submits that tax would include interest and admittedly if both the components are considered the assessee had not deposited the entire amount and consequently CNR No : HCBM020016522008 Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 05:53:53

tribunal ought not to have entertained the appeal. 2. Section 249(4) is the provision whereby the remedy of the party is taken away, if there is non compliance with that provisions. It is well settled that when legislature seeks to make a law denying a remedy on failure to comply with deposit, the courts would save the remedy, if possible by the interpretative process. Further in taxing statute, if a view can be taken in favour of an assessee that view is ordinarily preferred. . On the literal reading of Section 249(4) of the Act, the language used by the Legislature is "has paid tax dues". The expression tax has been defined in Section 2(43) of the Income Tax Act. Tax as per the definition does not include interest which has been independently referred to under Section 2(28)(a) of the Income Tax Act. When the legislature itself has used two different expressions and defined them separately, then whilst considering the language of a section, the courts are bound to look at the definitions in the legislation for the purpose of interpreting and construing the expressions and words under the Act. The object being to avoid conflict and have a harmonious interpretation, unless the context otherwise requires. In these circumstances, in our opinion the expression "tax" does not include interest for the purpose of Section 249(4) of the Income Tax Act. Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 05:53:53

3.

On behalf of the assessee, the leaned counsel also brought to our attention the judgment of the Supreme Court in Harshad Shantilal Mehta Vs. Custodian and Others, 231 ITR 871. This was also under the provisions of the Income Tax Act. The issue for consideration in terms of Question 5, framed by the Supreme Court was whether the tax under Section 11(2)(a) would include interest on penalty as well. After considering the different concepts under the Income Tax Act, the learned Court was pleased to hold that the penalty and interest under the Income Tax Act are different concepts and that definition of tax under Section 2(43) does not include penalty or interest. In our opinion, the view taken by us finds support in these observations of the Supreme Court in the case of Harshad Mehta (supra). Considering the above, in our opinion, the Tribunal was right in the view taken. We accordingly confirm the view taken by the Tribunal. 4. The department had framed question (b). In our opinion, considering the fact that the said question has been remanded back to the C.I.T. (Appeal), we refuse to frame that question of law. 5. The appeal disposed of accordingly. (K.U.CHANDIWAL, J.) (K.U.CHANDIWAL, J.) (K.U.CHANDIWAL, J.) (F.I.REBELLO, J.) (F.I.REBELLO, J.) (F.I.REBELLO, J.) Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 05:53:53 Powered by TCPDF (www.tcpdf.org)

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