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HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR (1) D.B. Income Tax Appeal No. 203 / 2010 C I T Jaipur ----Appellant Versus Rajendra Prasad Mittal ----Respondent Connected With (2) D.B. Income Tax Appeal No. 205 / 2010 C I T Jaipur ----Appellant Versus Rajendra Prasad Mittal ----Respondent (3) D.B. Income Tax Appeal No. 210 / 2010 C I T Jaipur ----Appellant Versus Rajendra Prasad Mittal ----Respondent (4) D.B. Income Tax Appeal No. 216 / 2010 C I T Jaipur ----Appellant Versus Rajendra Prasad Mittal ----Respondent (5) D.B. Income Tax Appeal No. 226 / 2010 C I T Jaipur ----Appellant Versus
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Rajendra Prasad Mittal ----Respondent (6) D.B. Income Tax Appeal No. 229 / 2010 C I T Jaipur ----Appellant Versus Rajendra Prasad Mittal ----Respondent (7) D.B. Income Tax Appeal No. 230 / 2010 C I T Jaipur ----Appellant Versus Rajendra Prasad Mittal ----Respondent
_____________________________________________________ For Appellant(s) : Mr. Anil Mehta For Respondent(s) : Mr. Anant Kasliwal _____________________________________________________ HON'BLE MR. JUSTICE K.S. JHAVERI HON'BLE DR. JUSTICE VIRENDRA KUMAR MATHUR Judgment 29/05/2017 1. Since identical question of law and facts are involved in these appeals hence they are decided by this common judgment. 2. By way of these appeals, the appellants have assailed the judgment and order of the Tribunal whereby Tribunal has dismissed the appeal of the department and partly allowed the
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appeal preferred by the assessee. 3. This court while admitting the appeals framed following substantial questions of law:- 3.1 Appeal No.203/2010 admitted on 18.8.2010, Appeal (205/2010 & 210/2010 & 226/2010) admitted on 20.8.2010. “1. Whether Tribunal was justified in holding that no interest under Section 234B and 234C of the Act is chargeable on the facts of the case so far as the assessee is concerned? 2. whether tribunal was justified in deleting the interest levied under section 234D if so whether such finding is sustainable? 3. Whether case in question should have been dealt with in accordance with the requirement of Section 132B ibid and if it was not dealt with, by not taking note of said provision, whether a case for remand id made out for examining the question keeping in view the requirement of section 132B ibid”. 3.2 Appeal No. 216/2010 admitted on 1.10.2010 & Appeal No.229/2010 admitted on 22.10.2010 Appeal No.230/2010 admitted on 29.9.2010. “1. Whether the Tribunal was justified in not charging interest under Section 234B and 234C of the Act ignoring the judgment of Hon’ble Supreme Court in the case of Anjum H Ghanshwala – 252 ITR(1), wherein it has been held that charging of interest under Section 234B and 234C is mandatory and the power of waiver lies only with the Central Board of Taxes (CBDT)”. 4. Counsel for the appellant Mr. Mehta has taken us to the provision of Section 234B, 234C & 234D of the IT Act which reads
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as under:- 234B. Interest for defaults in payment of advance tax.- (1) Subject to the other provisions of this section, where, in any financial year, an assessee who is liable to pay advance tax under section 208 has failed to pay such tax or, where the advance tax paid by such assessee under the provisions of section 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 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-section (1) of section 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. 234C. Interest for deferment of advance tax. (1) [Where in any financial year,— (a) the company which is liable to pay advance tax under section 208 has failed to pay such tax or— (i) the advance tax paid by the company on its current income on or before the 15th day of June is less than fifteen per cent of the tax due on the returned income or the amount of such advance tax paid on or before the 15th day of September is less than forty-five per cent of the tax due on the returned income or the amount of such advance tax paid on or before the 15th day of December is less than seventy-five per cent of the tax due on the returned income, then, the company shall be liable to pay simple interest at the rate of [one] per cent per month for a period of three months on the amount of the shortfall from fifteen per cent or forty-five per cent or seventy-five per cent, as the case may be, of the tax due on the returned income; (ii) the advance tax paid by the company on its current income on or before the 15th day of March is less than the tax due on the returned income, then, the company shall be liable to pay simple interest at the rate of [one] per cent on the amount of the shortfall from the tax due on the returned income: Provided that if the advance tax paid by the company on its current income on or before the 15th day of June or the 15th day of September, is not less than twelve per cent or, as the case may be, thirty-six per cent of the tax due on the returned income, then, it shall not be liable to pay any interest on the amount
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of the shortfall on those dates; (b) the assessee, other than a company, who is liable to pay advance tax under section 208 has failed to pay such tax or,— (i) the advance tax paid by the assessee on his current income on or before the 15th day of September is less than thirty per cent of the tax due on the returned income or the amount of such advance tax paid on or before the 15th day of December is less than sixty per cent of the tax due on the returned income, then, the assessee shall be liable to pay simple interest at the rate of [one] per cent per month for a period of three months on the amount of the shortfall from thirty per cent or, as the case may be, sixty per cent of the tax due on the returned income; (ii) the advance tax paid by the assessee on his current income on or before the 15th day of March is less than the tax due on the returned income, then, the assessee shall be liable to pay simple interest at the rate of [one] per cent on the amount of the shortfall from the tax due on the returned income :] Provided that nothing contained in this sub-section shall apply to any shortfall in the payment of the tax due on the returned income where such shortfall is on account of under-estimate or failure to estimate— (a) the amount of capital gains; or (b) income of the nature referred to in sub-clause (ix) of clause (24) of section 2, (c) income under the had “Profits and gains of business or profession” in case where the income accrues or arises under the said head for the first time, and the assessee has paid the whole of the amount of tax payable in respect of income referred to clause (a) or clause (b) or clause (c), as the case may be, had such income been a part of the total income, as part of the [remaining instalments of advance tax which are due or where no such instalments are due], by the 31st day of March of the financial year:] [Provided further that nothing contained in this sub- section shall apply to any shortfall in the payment of the tax due on the returned income where such shortfall is on account of increase in the rate of surcharge under section 2 of the Finance Act, 2000 (10 of 2000), as amended by the Taxation Laws (Amendment) Act, 2000 (1 of 2001), and the assessee has paid the amount of shortfall, on or before the 15th day of March, 2001 in respect of the instalment of advance tax due on the 15th day of June, 2000, the 15th day of September, 2000 and the 15th day of December, 2000 :] 25[Provided also that nothing contained in this sub- section shall apply to any shortfall in the payment of
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the tax due on the returned income where such shortfall is on account of increase in the rate of surcharge under section 2 of the Finance Act, 2000 (10 of 2000) as amended by the Taxation Laws (Amendment) Act, 2001 (4 of 2001) and the assessee has paid the amount of shortfall on or before the 15th day of March, 2001 in respect of the instalment of advance tax due on the 15th day of June, 2000, the 15th day of September, 2000 and 15th day of December, 2000.] (2) The provisions of this section shall apply in respect of assessments for the assessment year commencing on the 1st day of April, 1989 and subsequent assessment years.] 234D. Interest on excess refund (1) Subject to the other provisions of this Act, where any refund is granted to the assessee under sub- section (1) of section 143, and— (a) no refund is due on regular assessment; or (b) the amount refunded under sub-section (1) of section 143 exceeds the amount refundable on regular assessment, the assessee shall be liable to pay simple interest at the rate of [one-half per cent] on the whole or the excess amount so refunded, for every month or part of a month comprised in the period from the date of grant of refund to the date of such regular assessment. (2) Where, as a result of an order under section 154 or section
155 or section
250 or section 254 or section
260 or section
262 or section 263 or section 264 or an order of the Settlement Commission under sub-section (4) of section 245D, the amount of refund granted under sub-section (1) of section 143 is held to be correctly allowed, either in whole or in part, as the case may be, then, the interest chargeable, if any, under sub-section (1) shall be reduced accordingly. 4.1 Taking into consideration, he contended that amount which has been deposited cannot be taken into consideration in view of the fact that the tax is levied only after the assessment is done till then the amount which has been received by the department cannot be treated in custody of the department as tax.
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Counsel for the respondent has submitted that view taken by the tribunal and CIT(A) is required to be accepted more particularly as soon as if the amount is taken into account as income even then it cannot be treated as tax collected on that date and he will not be in a position to deal with the amount for any further purpose as the amount was lying with the department. 5.1 The tribunal while considering the issue no.2 has considered the same in detail and relied upon the decision of the Supreme Court in case of CIT vs. Pranoy Roy reported in (2009) 309 ITR 231 (SC) wherein it has been held as under:- “Since the tax due had already been paid which was not less than the tax payable on the returned income which was accepted, the question of levy of interest does not arise. Thus, we find no merit in this appeal and the same is dismissed.” 6. Taking into consideration the above, the view taken by the tribunal is just and proper. We are of the opinion that the issue is required to be answered in favour of the assessee and against the department. Therefore, amount seized ought to have been deposited by the department and should be treated as advance tax. 7. The appeals stand dismissed. A copy of this judgment be placed in each file.
(VIRENDRA KUMAR MATHUR),J. (K.S. JHAVERI),J. Brijesh 70 to 76.