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Income Tax Appellate Tribunal, NAGPUR BENCH, NAGPUR
Before: SHRI SHAMIM YAHYA & SHRI RAM LAL NEGI
PER SHAMIM YAHYA, A.M.
The aforesaid appeal at the instance of the assessee is against
the impugned order dated 5th February 2015, passed by the learned
Commissioner (Appeals)–I, Nagpur, pertaining to assessment year
2007–08.
The grounds raised by the assessee are reproduced below:–
“1. The order passed by A.O. under section 143(3) of I.T. Act 1961 is illegal, invalid and bad in law and the Id. CIT(A) erred in confirming the same.
On the facts and in the circumstances of the case and in law the Id. CIT(A) erred in confirming the interest charged by AC.
2 M/s. VHCPL ADCC Pinglai Infrastructure Pvt. Ltd. under sections 234B and 2340 of l.T. Act 1961. Without prejudice the levy of interest u/s 234B and 2340 of I.T. Act 1961 is unjustified, unwarranted and excessive.
The Id. Lower authorities ought to have held that there is no advance tax liability and no interest u/s 234B and 2340 of I.T. Act 1961 is chargeable in respect of income chargeable to tax u/s 11 5J of IT. Act 1961.”
In this case, the only issue in dispute relates to liability to pay
advance tax and interest under section 234B and 234C of the Act in
case of income chargeable to tax under section 115JB of the Act.
The assessment year in this case is A.Y. 2007–08. The learned
CIT(A) had decided this issue against the assessee by placing reliance
on the subsequent decision of the Hon’ble Supreme Court in JCIT v/s
Rolta India Ltd., [2011] 330 ITR 470 (SC). Against this order, the
assessee’s proposition is that prior to rendering of this decision of the
Hon’ble Supreme Court, the Apex Court decision in Kwality Biscuits
was holding the field. In view of the said decision, no advance tax was
payable under MAT computed under section 115JB of the Act for the
assessment year under consideration. In this regard, the submissions
of the learned Counsel for assessee may be gainfully referred to as
under:–
“Assessment year under consideration is 2007-08 Previous year end on 31/03/2007 advance tax was required to be paid in Financial Year 2006-07 and 1s installment was due on 15/09/2006. As on date the advance tax was payable in terms of decision of Hon'ble Apex Court in the case of Kwality Biscuits Ltd. rendered on 26/04/2006. No advance tax was payable on MAT computed u/s 115JB for the assessment year under consideration.
3 M/s. VHCPL ADCC Pinglai Infrastructure Pvt. Ltd.
For the assessment year under consideration i.e. Asstt Year 2007- 08 the judgement of Hon'ble Supreme Court in case of CIT vs. Kwality Biscuits Ltd. dated 26/04/2006 was the law of the land on this issue. Thus levy of interest u/s 234B and 234C of I.T. Act 1961 is unjustified.
Decision in the case of JCIT vs. Rolta India Ltd. was delivered by Supreme Court subsequent on 11/01/2001 i.e after the end of financial year under consideration. Thus, law laid down by Rolta India Ltd. not applicable for the year under consideration. Levy of interest is unjustified.
Reliance on:
i) Charbhuja Industries Pvt. Ltd. vs ACIT, [2014] 31 ITR (Trib.) 89 (Mum.);
ii) M/.s Rockline Developers Pvt. Ltd., ITA no.6595/ Mum./2014, order dated 01.01.2016;
iii) CIT v/s Kwality Biscuits Ltd., [2006] 284 ITR 434 (Bom.);
iv) CIT v/s JSW Energy Ltd., [2015] 379 ITR 36 (Bom.);
v) CIT v/s Natural Gems Ltd., [2010] 327 ITR 269 (Bom.);
Snowcem India Ltd. v/s CIT, [2009] 313 ITR 170 vi) (Bom.).
Per–contra, the learned Departmental Representative relied upon
the orders of the authorities below.
Upon careful consideration, we note that the Co–ordinate Bench
of the Tribunal in Charbhuja Industries Pvt. Ltd. vs ACIT, [2014] 31
ITR (Trib.) 89 (Mum.) has taken note of the decision of the Hon'ble
Supreme Court Rolta India Ltd. (supra) in this regard and has held as
under:-
4 M/s. VHCPL ADCC Pinglai Infrastructure Pvt. Ltd.
“5. We have considered the rival submissions as well as relevant material on record. There is no dispute regarding the fact that during the assessment years under consideration the settled law on the point was the decision of the Hon’ble Supreme Court in case of CIT Vs Kwality Biscuits Ltd. 284 ITR 434 as well as a number of other decisions including decisions of Hon’ble Jurisdictional High Court in case of Snowcem India Ltd. Vs DCIT 313 ITR 170 and in case of CIT Vs Natural Gems Ltd. 327 ITR 269 wherein it has been held that no advance MAT was payable by the company. Therefore, the assessee had no reason to belief or foresee a subsequent decision fastening the liability of payment of advance tax. Even otherwise the decision in case of JCIT Vs Rolta India Ltd. (supra) is a subsequent decision and therefore, the impossibilities at the relevant point of time cannot be thrashed upon the assessee. In the facts and circumstances as discussed above no fault can be found with the assessee in not depositing the advance tax of MAT in view of the decision of the Hon’ble Supreme Court as well as various decisions of the Hon’ble HighCourt. The assessee had the bonafide reason to believe that advance tax was not payable in respect of MAT u/s 115JB as it was settled law laid down by the Hon’ble Supreme Court and Hon’ble High Court which hold good till the subsequent decision of Hon’ble Supreme Court in case of JCIT Vs Rolta India Ltd. (supra). Therefore, prior to the decision of Hon’ble Supreme Court in case of JCIT v/s Rolta India Ltd. (supra) settled proposition of the law on the point was that no advance tax was payable on MAT computed under section 115JB and accordingly, the interest u/s 234B and 234C cannot be levied for non–deposit of advance tax on MAT for the year under consideration. Hence, we delete the levy of interest u/s 234B and 234C in this case.”
From the above, it is evident that the Co–ordinate Bench of the
Tribunal had held that the assessee was not liable to pay advance tax
in the case of MAT computed under section 115JB of the Act for the
period prior to the judgment of the Hon’ble Supreme Court in Rolta
India Ltd. (supra). Admittedly, the assessment year in dispute in case
of assessee is prior to rendering of the said decision of the Hon’ble
Supreme Court. Accordingly, respectfully following the precedent from
5 M/s. VHCPL ADCC Pinglai Infrastructure Pvt. Ltd. the decision as aforesaid, we set aside the impugned order passed by
the learned CIT(A) by allowing the ground raised by the assessee.
In the result, assessee’s appeal stands allowed.
Order pronounced in the open Court on 09.05.2018
Sd/- Sd/- RAM LAL NEGI SHAMIM YAHYA JUDICIAL MEMBER ACCOUNTANT MEMBER
NAGPUR, DATED: 09.05.2018
Copy of the order forwarded to:
(1) The Assessee; (2) The Revenue; (3) The CIT(A); (4) The CIT, Nagpur City concerned; (5) The DR, ITAT, Nagpur; (6) Guard file. True Copy By Order Pradeep J. Chowdhury Sr. Private Secretary
(Sr. P.S./P.S.) ITAT, Nagpur