Deputy Commissioner Of Income Tax, Circle- 1(1)(2), Bangalore V. M/s. Brindavan Beverages Private Limited, Bangalore

ITA 2508/BANG/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 1885 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 2 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-03-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 08-02-2021
• Assessment Year: 2008-2009
• Appeal Filed On: 10-12-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V SRINIVASAN
• Keywords: Business income; Depreciation; Search and seizure; Retrospective amendment; Deemed dividend; Revised return; Set aside
• Section: 143(3); 142(1); 153A; 234B; 115JB; 143(2); 207; 208; 13; 132; 154; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI. CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER ITA NO.2508/BANG/2019 ASSESSMENT YEAR : 2008-09 THE DY. COMMISSIONER OF INCOME-TAX, CIRCLE-1(1)(2), BENGALURU. VS. M/S BRINDAVAN BEVERAGES PVT. LTD., NO.5/3, JAYAMAHAL EXTENSION 1 ST MAIN ROAD, BENGALURU-560 027. PAN : AAACB 7390 R APPELLANT RESPONDENT ASSESSEE BY : SHRI PRADEEP KUMAR, CIT(DR) REVENUE BY : SHRI V SRINIVASAN, ADVOCATE DATE OF HEARING : 08-02-2021 DATE OF PRONOUNCEMENT : 08-03-2021 ORDER PER BEENA PILLAI, JUDICIAL MEMBER PRESENT APPEAL HAS BEEN FILED BY REVENUE AGAINST OR DER DATED 27/09/2019 PASSED BY THE LD.CIT(A)-1, BANGALO RE ON FOLLOWING GROUNDS OF APPEAL: 1.THE ORDER OF THE LEARNED CIT(APPEALS), IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF REVENUE, IS OPPOSED TO LAW AND THE FACT S AND CIRCUMSTANCES OF THE CASE. 2.THE LD.CIT(A) ERRED IN DELETING THE INTEREST CHAR GED U/S.234B AND 234C OF THE ACT. 3.THE LD.CIT(A) ERRED IN DECIDING THE ISSUE WHICH I S NOT EMANATING FROM GIVING EFFECT ORDER. PAGE 2 OF 16 ITA NO.2508/BANG/2019 4THE LD.CIT(A) ERRED IN HOLDING THAT RETROSPECTIVE AMENDMENT OF PROVISION WITHOUT AFFECT THE CHARGE OF INTEREST AS ON THE DAT E OF GIVING EFFECT ORDER. 5.FORTHESE AND SUCH OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING, IT IS HUMBLY PRAYED THAT THE ORDER OF THE LD.CIT(A) BE REVERSED AND THAT OF THE ASSESSING OFFICER BE RESTORED. 6.THE APPELLANT CRAVES LEAVE TO ADD, TO ALTER, TO A MEND OR DELETE ANY OF THE GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING OF APPROVAL. BRIEF FACTS OF THE CASE ARE AS UNDER: 2. ASSESSEE IS A PRIVATE LIMITED COMPANY AND CARRIE S ON BUSINESS OF MANUFACTURE AND SALE OF AERATED DRINKS, INVESTMENT AND REAL ESTATE BESIDES THE BUSINESS OF GENERATION OF POWER USING RENEWABLE SOURCE OF ENERGY. FOR YEAR UNDER CONSIDER ATION ASSESSEE FILED ITS ORIGINAL RETURN OF INCOME ON 26/ 09/2008 DECLARING TOTAL INCOME OF RS.13,82,01,580/- IS. ASS ESSEE ALSO REPORTED IN BOOK PROFIT OF RS.87,00,58,628/-UNDER S ECTION 115 JB OF THE ACT, WHICH WAS ADOPTED FOR COMPUTING THE TAX PAYABLE FOR YEAR UNDER CONSIDERATION. THE LD.AO NOTED THAT ASSE SSEE IS ALSO ENGAGED IN REAL ESTATE BUSINESS-INVESTING IN AND LE TTING OUT OF PROPERTIES ON RENT. 3. ON 18/12/2012, SEARCH UNDER SECTION 132 OF THE A CT WAS CARRIED OUT IN CASE OF ASSESSEE AND ITS FRANCHISEE BOTTLERS OF M/S COCA-COLA INDIA PVT. LTD. NOTICE UNDER SECTION 153A WAS ISSUED ON 26/02/2014 REQUIRING ASSESSEE TO FILE RETURN OF INCOME, IN RESPONSE TO WHICH, ASSESSEE FILED RETURN OF INCOME ON 30/04/2014 DECLARING TOTAL INCOME OF RS.13,94,66,29 0/- AND THE BOOK PROFIT OF RS.1,19,99,86,225/-. SUBSEQUENTLY, N OTICE UNDER SECTION 143(2) AND 142(1) WERE ISSUED TO ASSESSEE, CALLING FOR VARIOUS DETAILS. IN COMPLIANCE TO THE NOTICES, REPR ESENTATIVE OF ASSESSEE APPEARED BEFORE THE LD.AO AND FILED DETAIL S AS CALLED FOR. PAGE 3 OF 16 ITA NO.2508/BANG/2019 4. LD.AO WHILE PASSING THE ORDER UNDER SECTION 153A READ WITH 143 (3) OF THE ACT MADE ADDITION TO THE BOOK PROFIT BEING INVESTMENT WRITTEN OFF AMOUNTING TO RS.98,73,900/-. THE LD.AO ALSO MADE ADDITION AMOUNTING TO RS.59,68,494/- UNDE R SECTION 2 (22) (E) OF THE ACT PROTECTIVELY. 5. AGGRIEVED BY ADDITIONS MADE BY THE LD.AO, ASSESS EE PREFERRED APPEAL BEFORE LD.CIT(A). 6. THE LD.CIT(A) DISPOSED OFF THE APPEAL VIDE ORDER DATED 26/09/2016 PARTLY ALLOWING THE APPEAL WITH RESPECT TO THE INCOME COMPUTED UNDER REGULAR PROVISIONS OF THE ACT . THE LD.CIT(A) HOWEVER UPHELD THE INCOME COMPUTED UNDER SECTION 115 JB OF THE ACT. THE LD.AO WHILE PASSING ORDER GI VING EFFECT TO THE ORDER OF LD.CIT(A), DETERMINED THE INCOME OF AS SESSEE UNDER REGULAR PROVISIONS OF THE ACT AT RS.13,94,66,290/-, THEREBY REDUCING THE ADDITION MADE TOWARDS DEEMED DIVIDEND. FURTHER, IN THE ORDER GIVING EFFECT, THE LD.AO RETAINED THE INC OME ASSESSED UNDER SECTION 115 JB OF THE ACT AT RS.1,20,97,36,14 1/- THAT WAS CONFIRMED IN THE APPEAL BY THE LD.CIT(A). THE LD.AO HOWEVER, VARIED THE INTEREST COMPUTED UNDER SECTION 234B AND C IN THE ORDER GIVING EFFECT TO, BASED UPON THE ORIGINAL ASS ESSMENT ORDER UNDER SECTION 153A READ WITH 143(3) OF THE ACT, DAT ED 30/03/2015, AND WORKED OUT THE TAX PAYABLE AT RS.6,32,66,040/-. 7. AGGRIEVED BY THE HIGH INTEREST IMPOSED BY THE LD .AO UNDER SECTION 234B AND C WHILE PASSING ORDER GIVING EFFEC T TO, ASSESSEE PREFERRED APPEAL BEFORE THE LD.CIT(A). THE LD.CIT(A ) AFTER PAGE 4 OF 16 ITA NO.2508/BANG/2019 CONSIDERING THE SUBMISSIONS, ALLOWED THE GROUND OF ASSESSEE BY HOLDING AS UNDER: 5.2. GROUND NO.2 RELATES TO THE COMPUTATION OF INT EREST U/S 234B AND 234C OF THE ACT, ON ACCOUNT OF CERTAIN ADDITIONAL I NCOME OFFERED PURSUANT THE YEAR UNDER APPEAL, THE APPELLANT HAS BEEN ASSES SED ON RS.120,97,36,141/-. THE APPELLANT HAD ORIGINALLY FI LED RETURN 26.09.2008 COMPUTING THE BOOK PROFIT OF RS.87,00,58,628/-. TH E APPELLANT WAS SUBJECTED TO A SCRUTINY ASSESSMENT U/S.143(3) 16.12 .2010. IN THE SAID ASSESSMENT ORDER PASSED U/S.143(3), THE BOOK PROFIT OF THE APPELLANT WAS COMPUTED AT RS.87,03,95,824/-. AFTER THE COMPLETION OF THE ASSESSMENT, SURVEY WAS CONDUCTED U/S,133A OF THE ACT, BY THE A. O. ON 24.07.2012. IT WAS FOUND IN SURVEY THAT THE APPELLANT HAD CLAIM ED A DEDUCTION WHILE COMPUTING BOOK PROFIT FOR THE PROVISIONS MADE TOWAR DS IMP OF RS.16 CRORES AND 100% DEPRECIATION ON WINDMILL OF RS.17,7 0,66,417/-. IT WAS POINTED OUT TO THE APPELLANT IN SURVEY THAT THE PRO VISIONS OF SEC ACT, WERE AMENDED BY THE FINANCE NO.2 ACT, 2009, WITH RETROSP ECTIVE FROM 01.04.2001. AS PER THE AMENDMENT MADE TO EXPLANATIO N 1 OF THE ACT, CLAUSE (I) WAS INTRODUCED TO PROVIDE THAT THE BOOK INCREASED BY THE AMOUNT SET-ASIDE AS PROVISION FOR DIMINUTION IT AND THEREFORE, THE SAID CLAIMS WERE NOT ALLOWABLE. BASED ON AMENDMENT, APPE LLANT ALSO AGREED TO RE4SE THE RS.119,98,62,241/- ON ACCOUNT OF THE I NCREASE TO THE BOOK PROFITS THE ABOVE PROVISIONS DEBITED TO THE PROFIT & LOSS ACCOUNT. IT ALSO FILED A REVISED RETURN OF INCOME AFTER THE SURVEY O N 02-11-2012. WHICH HAS FORMED THE BASIS FOR ASSESSMENT MADE U/S. 143[3 ] R.W.S 153A OF THE ACT. IN THE SEARCH AND SEIZURE OPERATIONS CONDUCTED U/S.132 OF THE ACT IN THE BUSINESS PREMISES OF THE APPELLANT ON 18/12/201 2 AND APPELLANT FILED RETURN OF INCOME ON AFTER THE CONCLUSION OF THE AFORESAID SEARCH OPERATIONS, THE APPELLANT FILED ITS ON 30/04/2014,D ECLARING A BOOK PROFIT OF RS, 119,99,86,225/- AS AGAINST THE PROFITS OF RS . 87,03,95,824/- ASSESSED IN THE ORDER OF REGULAR U/S 143[3] OF THE ACT DATED 16/12/2010 IN RESPONSE TO NOTICE ACT. ORDER OF RE-ASSESSMENT W AS PASSED U/S. 153A R.W.S 143[3] OF CITED 30/03/2015, IN WHICH THE LEAR NED A.O. MADE AN ADDITION OF RS.98,73,900/-, IN RESPECT OF THE AMOUN TS WRITTEN OFF BY THE APPELLANT TO THE PROFIT COUNT WHILE DETERMINING THE INCOME OF THE APPELLANT U/S. 115JB OF THE APPELLANT WAS ASSESSED ON THE BOO K PROFIT OF RS 120,97,36,141/- U/S 115JB OF THE ACT, AS AGAINST TH E RETURNED INCOME OF RS 119,99,86,225/-. IN THE INCOME SO ASSESSED, THE FOLLOWING COMPUTATION OF ADDITIONAL BOOK PROFITS OFFERED OF THE RETROSPEC TIVE AMENDMENT IS INCLUDED: PROVISION FOR IMPAIRMENT OF ASSETS 16,00,00,000 DEPRECIATION ON WINDMILL AT 100% 17,70,66,417 TOTAL 33,70,66,417 PAGE 5 OF 16 ITA NO.2508/BANG/2019 LESS : DEPRECIATION ON CRATES CLAIMED 76,00,000 ADDITIONAL BOOK PROFIT OFFERED 32,94,66,417 5.3 IT IS THE CONTENTION OF THE APPELLANT THAT THE LEVY OF INTEREST U/S.234B AND 234C THE ACT, FOR THE FAILURE TO PAY ADVANCE-TA X ON THE ADDITIONAL BOOK PROFIT JUSTIFIED BECAUSE, THE APPELLANT CANNOT BE EXPECTED TO PAY ADVANCE-TAX WHEN THERE, WAS NO REQUIREMENT TO TREAT THE ADDITIONAL INCOME AS BOOK PROFITS U/S. 115JB OF THE ACT AS PER THE LAW IN FORCE DURING THE EAR UNDER APPEAL. SUCH PROVISIONS WERE A LSO NOT IN THE STATUTE WHEN II R TURN OF INCOME WAS FILED BY THE APPELLANT ON 26.09.2008, AS THE SAID AMENDMENT WAS MADE BY THE FINANCE NO.2 ACT, 2 009 WITH RETROSPECTIVE EFFECT FROM O1.04.2001. NUMBER OF JUD GEMENTS HAVE BEEN RELIED UPON BEFORE POSITION THAT INTEREST U/S.234B AND 234C OF THE ACT, CANNOT BE ADVANCE TAX IS RENDERED PAYABLE DUE TO RE TROSPECTIVE AMENDMENT RING TO TAX CERTAIN INCOME MANY OF THE JU DGEMENTS CITED ARE ALSO IN T OF THE PROVISIONS OF SECTION 115JB OF THE ACT. 5.4 AFTER CONSIDERING THE SUBMISSIONS MADE BY THE A PPELLANT AND THE FACTS OF ANT'S CASE IN THE CONTEXT OF THE DECISIONS RELIED UPON, I AM OF THE VIEW THAT THE LEVY INTEREST U/S234B AND 234C OF TH E ACT, ON THE ADDITIONAL BOOK PROFIT OF RS.32,94,66,417/- IS NOT WARRANTED. IN CONCLUSION, I AM RELYING UPON THE JUDGEMENT OF THE HON'BLE CALCUTTA H THE CASE OF EMAMI LIMITED REPORTED IN 337 ITR 470 [CAL] WHEREIN IT HAS BEEN HELD AS FOLLOWS: '11. A MERE READING OF THOSE PROVISIONS LEAVES NO D OUBT THAT THE ADVANCE TAX IS AN AMOUNT PAYABLE IN ADVANCE DURING A YEAR I N ACCORDANCE WITH THE PROVISIONS OF THE ACT IN RES TOTAL INCOME OF TH E ASSESSEE WHICH WOULD BE CHARGEABLE THE ASSESSMENT YEAR IMMEDIATELY FOLLO WING THAT FINANCIAL YEAR. THUS, IN ORDER TO HOLD AN ASSESSEE LIABLE FO R PAYMENT OF ADVANCE LIABILITY TO PAY SUCH TAX MUST EXIST ON THE LAST DA TE OF ADVANCE TAX AS PROVIDED UNDER THE ACT OR AT LEAST ON THE FINANCIA L YEAR PRECEDING THE ASSESSMENT YEAR IN SUCH LIABILITY ARISES SUBSEQUENT LY, WHEN THE LAST DATE OF PAYMENT OF ADVANCE TAX OR EVEN THE LAST DATE OF THE FINANCIAL YEAR PREP ASSESSMENT YEAR IS OVER, IT IS INAPPROPRIATE TO SUG GEST THAT THE ASSESSEE HAD THE LIABILITY TO PAY 'ADVANCE TAX' WITHIN THE M EANING OF THE ACT. 12. IN THE CASE BEFORE US, THE LAST DATE OF THE REL EVANT FINANCIAL YEAR WAS MARCH 31, 2001, AND ON THAT DAY, ADMITTEDLY, THE AP PELLANT HAD NO LIABILITY TO PAY ANY AMOUNT OF ADVANCE TAX IN WITH THE THEN LAW PREVAILING IN THE COUNTRY. CONSEQUENTLY THE APPELLANT PAID NO ADVANCE TAX AND SUBMITTED ITS REGULAR RETURN ON OCTOBER 31, 2001, W ITHIN THE TIME FIXED BY LAW WHEREIN IN ITS TOTAL INCOME AND THE BOOK PROFIT BOTH AS NIL. CONSEQUENT TO THE AMENDMENT OF THE PROVISIONS CONTAINED 115JB OF THE ACT BY VIRTUE OF THE FINANCE ACT, 2002, IT PUBLISHED IN THE OFFIC IAL GAZETTE ON MAY 11,2002, RETROSPECTIVE EFFECT TO THE AMENDMENT FROM APRIL 1, APPELLANT FIRST VOLUNTARILY PAID A SUM OF RS.1,55,62,511/- O F THE TAX PAYABLE ON PAGE 6 OF 16 ITA NO.2508/BANG/2019 BOOK PROFIT AS PROVIDED IN THE PROVISION OF SECTION 115JB AND THEN FILED ITS REVISED RETURN ON MARCH 31, 2003, DECLARING ITS BUSINESS INCOME AS NIL BUT THE L UNDER SECTION 115JB AS RS. 20,63,65,711, THE ASSESS) ACCEPTED SUCH RETURN OF INCOME BUT IMPOSED INTEREST UND 2348 AND 234C OF THE ACT AMOUNTING TO RS.44,00,937 AND RS.11,78,960 RESPECTI VELY. 13. IN OUR OPINION, THE AMENDED PROVISION OF SECTIO N 1 COME INTO FORCE WITH EFFECT FROM APRIL 1, 2001, THE APPELLANT CANNOT BE HELD DEFAULTER OF PAYMENT OF ADVANCE TAX. AS POINTED ON THE LAST DATE OF THE FINANCIAL YEAR PRECEDING THE ASSESSMENT YEAR, AS THE BOOK PROFIT O F THE APPELLANT IN A WITH THE PROVISION OF LAW WAS NIL, WE CANNOT CONCEI VE ANY 'ADVANCE TAX' WHICH IN ESSENCE IS PAYABLE WITHIN THE LAST FINANCI AL YEAR PRECEDING THE RELEVANT ASSESSMENT YEAR A. IN SECTIONS 207 AND 208 OR WITHIN THE DATES INDICATED IN S OF THE ACT WHICH INEVITABLY FALLS WI THIN THE LAST DATE OF THE FINANCIAL YEAR PRECEDING THE RELEVANT ASSESSMENT YE AR. CONSEQUENTLY, THE ASSESSEE CANNOT BE BRANDED AS A DEFAULTER IN PAYMEN T OF ADVANCE TAX AS MENTIONED ABOVE'. 5.5 FURTHER, THE HON'BLE BOMBAY HIGH COURT HAS TAKE N THE SIMILAR VIEW IN THE CASE OF CIT VS JSW ENERGY LTD. REPORTED IN 379 ITR 36 [BORN.] IN THE CONTEXT OF CLAUSE [H] OF EXPLANATION 1 THAT WAS BRO UGHT IN BY THE FINANCE ACT, 2008 WITH RETROSPECTIVE EFFECT FROM 01.04.2001 . THE HON'BLE BOMBAY HIGH COURT HAS TAKEN THE VIEW THAT THE LEVY, OF INT EREST ULS.234B BY VIRTUE OF THE RETROSPECTIVE AMENDMENT IS NOT WARRANTED. T HE FOLLOWING OBSERVATIONS OF THE HONBLE BOMBAY HIGH COURT ARE R ELEVANT : 17. IN THE PRESENT CASE, WHAT THE ASSESSEE HAS POI NTED OUT IS THAT SOME OF THE AMOUNTS INCLUDED IN THE BOOK PROFITS A S PER EXPLANATION ) 40 SECTION 115JB WERE BROUGHT IN BY THE FINANCE ACT, 2 008 WITH RETROSPECTIVE EFFECT FROM 1ST APRIL, 2001. THE ASSE SSEE CANNOT BE HELD BE LIABLE FOR FAILING TO MAKE A PROVISION FOR PAYMENT OF ADVANCE TAX WHICH WAS NOT POSSIBLE ON THE LAST DATE AS PER THE LAW TH EN PREVAILING. THUS CLAUSE (H) WHICH IS REPRODUCED ABOVE HAVING BEEN BR OUGHT IN WITH RETROSPECTIVE EFFECT BUT BY FINANCE ACT 2008, THE A DVANCE TAX COMPUTATION BY THE ASSESSEE FOR THE YEAR 2006-07 C ANNOT BE FAULTED AND IT CANNOT BE SAID THAT THE ASSESSEE IS IN DEFAULT A ND THEREFORE, THERE IS ANY LIABILITY TO PAY INTEREST IN TERMS OF SECTION 2 34B OF THE INCOME-TAX ACT, 1961. 18. IN THE PRESENT CASE OF STAR INDIA (P.) LTD. V. CCE[2006] 280 ITR 321/150 TAXMAN 728 THE HON'BLE SUPREME COURT HELD T O BE LIABLE FOR FAILING TO THAT THE SERVICE OF BROADCASTING' WAS M ADE A TAXABLE SERVICE WITH EFFECT FROM JULY 16, THE FINANCE ACT, 2001. TH E APPELLANT DISPUTED ITS LIABILITY TO PAYMENT FOR SERVICE TAX ON THE GROUND THAT IT DID NOT BROADCAST. THE COMMISSIONER, HOWEVER, HELD AGAINST THE APPELLA NT THE MATTER WAS CARRIED BEFORE THE COMMISSIONER OF INCOME TAX AND D URING PENDENCY OF APPEAL THE FINANCE ACT, 2001 WAS BY THE FINANCE ACT , 2002. THE EFFECT OF AMENDMENT, INTER O MAKE AN AGENT, SUCH AS THE APPEL LANT, BEFORE THE SUPREME COURT TO PAY SERVICE TAX AS BROADCASTER. PAGE 7 OF 16 ITA NO.2508/BANG/2019 19. THE SUPREME COURT NOTED THAT THE APPELLANTS' AP PEAL PENDING BEFORE THE COMMISSIONER WAS REJECTED BY HIM ON THE BASIS O F THIS AMENDMENT. THE TRIBUNAL ALSO MAINTAINED THIS ORDER AND THAT PA RT OF THE ORDER PASSED BY THE COMMISSIONER WAS NOT CHALLENGED IN APPEAL. H OWEVER, THE APPELLANT WAS AGGRIEVED BY THE FACT THAT THE TRIBUN AL HELD IT LIABLE TO PAY INTEREST ON THE AMOUNT WHICH IT WAS REQUIRED TO PAY BY REASON OF THE 2002 AMENDMENT. THE ASSESSEE CONTENDED THAT ONCE TH E AMENDMENT WAS BROUGHT IN, PENDING THE APPEAL, THERE WAS NO QU ESTION OF APPLYING SECTION 234B OR ANY ANALOGOUS PROVISION AND PAYMENT OF INTEREST. IT IS IN THAT REGARD THAT THE HONBLE SUPREME COURT HELD AS UNDER: '7. IN ANY EVENT, IT IS CLEAR FROM THE LANGUAGE OF THE VALIDATION CLAUSE, AS QUOTED BY US EARLIER, THAT THE LIABILITY WAS EXTEND ED NOT BY WAY OF CLARIFICATION BUT BY WAY OF AMENDMENT TO THE FINANC E ACT WITH RETROSPECTIVE EFFECT. IT IS WELL ESTABLISHED THAT W HILE IT. IS PERMISSIBLE FOR THE LEGISLATURE TO RETROSPECTIVELY LEGISLATE, SUCH, RETROSPECTIVITY IS NORMALLY NOT PERMISSIBLE TO CREAK OFFENCE RETROSPEC TIVELY. THERE WERE CLEARLY JUDGN7N DECREES OR ORDERS OF COURTS AND TRI BUNALS OR AUTHORITIES, WHICH REQUIRED TO BE NEUTRALISED BY T VALIDATION CL AUSE. WE CAN ONLY ASSUME THAT THE JUDGMENT DECREE OR ORDERS, ETC., HA D, IN FACT, HELD THAT PERSON SITUATE LIKE THE APPELLANTS WERE NOT LIABLE AS SERVICE PROVIDERS. THIS IS ALSO CLEAR FROM THE EXPLANATION TO T VALUAT ION SECTION WHICH SAYS THAT NO ACT OR ACTS ON THE P OF ANY PERSON SHALL BE PUNISHABLE AS AN OFFENCE HI WOULD NOT HAVE BEEN SO PUNISHABLE IF THE SECTION HAD IT COME INTO FORCE. 8. THE LIABILITY TO PAY INTEREST WOULD ONLY ARISE O N AND IS REALLY IN THE NATURE OF A QUASI PUNISHMENT LIABILITY ALTHOUGH CRE ATED RETROSPECTIVELY COULD NOT THE PUNISHMENT OF PAYMENT OF INTEREST WIT H RETROSPECTIVE EFFECT.' 20. THE SUPREME COURT HELD THAT THE LIABILITY TO PA Y INTEREST WOULD ONLY ARISE ON DEFAULT AND IS REALLY IN THE NATURE OF A Q UASI PUNISHMENT. THE LIABILITY TO TAX ALTHOUGH CREDITED RETROSPECTIVELY COULD NOT ENTAIL PUNISHMENT OF PAYMENT OF INTEREST WITH RETROSPECTIV E EFFECT. IT IS THIS PRINCIPLE WHICH HAS BEEN LAID DOWN WHICH IS FOLLOWE D BY THE CALCUTTA HIGH COURT. IT IS THAT PRINCIPLE RELIED UPON BY THE HIGH COURT WHICH HAS BEEN APPLIED BY THE TRIBUNAL TO THE CIRCUMSTANCES O F THE PRESENT CASE. WE DO NOT THINK THAT THE ASSESSEE BEFORE US CAN BE CAL LED UPON TO PAY INTEREST IN TERMS OF SE ONCE THE EXPLANATION WAS IN TRODUCED OR BROUGHT IN WITH RETROSPECTIVE EFFECT BUT BY FINANCE ACT, 2008. THEN, THERE WAS NO LIABILITY TO PAY INTEREST IN TERMS OF THIS PROVISIO N. THAT WAS BECAUSE THE ASSESSEE CANNOT BE TERMED AS DEFAULTER IN PAYMENT O F ADVANCE TAX COMPUTATION ON THE BASIS OF THE UN-AMENDED (SIC) PR OVISION THEREFORE COULD NOT HAVE BEEN ENTERTAINED. 21. WE DO NOT SEE ANY BROADER OR WIDER QUESTION ARI SING FOR OUR DETERMINATION AS THE VIEW TAKEN EVEN ON THIS QUESTI ON IS PERVERSE OR NEITHER VITIATED BY ANY ERROR OF LAW APPARENT ON TH E ON THE RECORD'. PAGE 8 OF 16 ITA NO.2508/BANG/2019 5.6 FOLLOWING THE SAID JUDGEMENTS, SIMILAR VIEW HAS ALSO BY THE HON'BLE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF VODA NO .880/MUM/2014 DATED 03.02.2016; THE DELHI BENCH OF THE H THE CASE OF NHCP LIMITED REPORTED IN 47 ITR (T) 561 AND THE KOLKATA BENCH OF HON'BLE TRIBUNAL IN THE CASE OF USHA MARTIN TELEMATICS NO.516/KOL/2010 DATED 19.01.2012. ALL THESE JUDGEMENTS ARE LIABILITY TO PAY ADVANCE T AX ON THE BOOK PROFIT COMPUTED RETROSPECTIVE AMENDMENTS. 5.7 RESPECTFULLY FOLLOWING THE SAID JUDICIAL PRECE DENTS RELIED UPON BY THE APPELLANT, I HOLD THAT INTEREST U/S.234B AND 234C O F THE ACT, CANNOT BE LEVIED ON THE TAX PAYABLE ON THE ADDITIONAL BOOK P ROFIT OF RS.32,94,66,417/-. HENCE, THE ASSESSING OFFICE IS DIRECTED TO COMPUTE INTEREST UNDER SECTION 234B & 234C BY EXCLUDING THE SAID ADDITIONAL INCOME BROUGHT TO TAX BASED ON THE AMENDED PROVISIO N WHICH CAME INTO STATUTE SUBSEQUENTLY. THUS, THE GROUND NO.2 RAISED BY THE APPELLANT IS HEREBY ALLOWED. 5.8 IN GROUND NO.4, THE APPELLANT HAS CHALLENGED TH E LEVY OF INTEREST U/S.234B IN THE ORDER GIVING EFFECT TO THE APPELLAT E ORDER AS PER PROVISIONS OF SECTION 234B(1) INSTEAD OF THE PROVISIONS OF 234 B(3) AS IT STOOD BEFORE THE SUBSTITUTION W.E.F 01.06.2015. IT IS THE CONT ENTION OF THE APPELLANT THAT THE ORDER GIVING THE APPELLATE ORDER DATED 25. 11,2016 IS PASSED MODIFYING THE IT ORDER PASSED U/S.143(3) RWS 153A O F THE ACT DATED 30.03.2015. IT OUT THAT THERE WAS AN ORIGINAL ASSES SMENT FRAMED U/S.143(3) DATED B AND HENCE, THE ORDER PASSED ULS. 143(3) RWS 153A OF THE ACT DATED 30.3.2015 IS REASSESSMENT. IT IS THE APPELLANT'S CONTENTION THAT IN A CASE OF REASSESSMENT, INTEREST U/S.234B(3 ) ALONE CAN BE LEVIED AND NOT INTEREST ) OF THE ACT. 5.9 1 HAVE PERUSED THE PROVISIONS OF SECTION 234B(1 ) AND 234B(3) AS IT WAS FOR THE YEAR UNDER APPEAL. AS PER THE SAID PROV ISIONS INTEREST U/S.234B(3) WAS LEVIABLE AT 1%, PER MONTH FOR THE P ERIOD FROM THE DAY FOLLOWING THE REGULAR ASSESSMENT AND ENDING WITH TH E REASSESSMENT. FURTHER, THIS INTEREST WAS LEVIABLE ON AN AMOUNT BY WHICH TAX ON REASSESSMENT EXCEEDED THE TAX ON REGULAR ASSESSMENT . IN OTHER WORDS, IN CASE OF REASSESSMENT U/S.148 OR 153A OF THE ACT, TH E INTEREST CHARGEABLE U/S.234B OF THE ACT, WILL CONSIST OF THE INTEREST A LREADY LEVIED U/S.234B(1) OF THE ACT, AS PER THE REGULAR ASSESSMENT AND FURTH ER INTEREST FM THE DATE OF REGULAR ASSESSMENT TO THE DATE OF REASSESSMENT. THE INTEREST US.24B(3) WILL BE COMPUTED ON THE DIFFERENTIAL TAX AS A RESUL T OF RE-ASSESSMENT, WHICH IS IN ADDITION TO THE INTEREST ALREADY LEVIED U/S. 23413[1] THAT HAS BEEN IMPOSED IN THE ORIGINAL ASSESSMENT. I FIND FRO M THE REGULAR ASSESSMENT ORDER U/S 143(3) DATED 16.12.2010 THAT I NTEREST U/S.234B(3) OF RS.34,27,664/HAS BEEN LEVIED. THE SAME HAS TO BE ADOPTED IN THE REASSESSMENT ORDER PASSED U/S.153A OF THE ACT AND T HEREAFTER, INTEREST U/S.234B(3) SHOULD BE COMPUTED FROM 17.12.2O10 TILL THE DAY OF REASSESSMENT ON THE AMOUNT OF TAX DETERMINED IN THE ORDER PASSED U/S,153A THAT EXCEEDS THE TAX DETERMINED IN THE ORD ER PASSED U/S.143(3) PAGE 9 OF 16 ITA NO.2508/BANG/2019 DATED 16.12.2010. THIS IS THE MANDATE OF THE PROVIS IONS OF SECTION 234B[3] OF THE ACT, AS IT STANDS FOR THE YEAR UNDER CONSIDERATION. THE ASSESSING OFFICER IS DIRECTED ACCORDINGLY. WHILE DO ING SO THE ASSESSING OFFICER SHALL DISREGARD THE TAX ON THE ADDITIONAL B OOK PROFIT DUE TO RETROSPECTIVE AMENDMENT AS PER THE DIRECTIONS CONTA INED IN GROUND NO.2 ABOVE. IT IS ORDERED ACCORDINGLY. 8. AGGRIEVED BY THE ABOVE FINDINGS, REVENUE IS IN A PPEAL BEFORE US NOW. 9. WE HAVE PERUSED SUBMISSIONS ADVANCED BY BOTH SID ES IN LIGHT OF RECORDS PLACED BEFORE US. 10. ADMITTEDLY, ADDITIONAL INCOME UNDER SECTION 115 JB OF THE ACT CAME TO BE COMPUTED ON ACCOUNT OF RETROSPECTIVE AMENDMENT MADE TO SECTION 115 JB BY FINANCE ACT (NO. 2), 2009 , WITH RETROSPECTIVE EFFECT FROM 01/04/2001, WHEREIN CLAUS E (I) WAS INTRODUCED TO PROVIDE FOR INCREASE IN BOOK PROFIT B Y THE AMOUNT SET ASIDE FOR PROVISION IN DIMINUTION IN THE VALUE OF ASSET. SINCE THE CLAUSE (I) WAS NOT ON STATUTE BOOK DURING THE R ELEVANT ASSESSMENT YEAR, THE ASSESSEE DID NOT INCREASE THE BOOK PROFITS WHILE ESTIMATING THE PAYMENT OF ADVANCE TAX. 11. THE LD.COUNSEL PLACED RELIANCE ON FOLLOWING DEC ISIONS: DECISION OF HONBLE KARNATAKA HIGH COURT IN CASE OF SH. VIJAY KUMAR SABOO IN ITA NO. 65 AND 66 OF 2005 BY ORDER D ATED 18/07/2011 DECISION OF HONBLE CALCUTTA HIGH COURT IN CASE OF M/S.EMAMI LTD. VS CIT REPORTED IN 337 ITR 470 DECISION OF HONBLE GUJARAT HIGH COURT IN CASE OF C IT VS NATIONAL DIARY DEVELOPMENT BOARD REPORTED IN 397 IT R 543 DECISION OF HONBLE BOMBAY HIGH COURT IN CASE OF CI T VS GSW ENERGY LTD. REPORTED IN 379 ITR 36 DECISION OF HONBLE PUNJAB AND HARYANA HIGH COURT I N CASE OF CIT VS SAP INDUSTRIES REPORTED IN (2013) 40 TAXM ANN.COM 175 PAGE 10 OF 16 ITA NO.2508/BANG/2019 DECISION OF ITAT DELHI BENCH IN CASE OF NHPC LTD. V S ACIT REPORTED IN (2017) 85 TAXMANN.COM 215 DECISION OF MUMBAI ITAT IN CASE OF DCIT VS MRS VODA FONE INDIA LTD. IN ITA NO. 880/M/2014 BY ORDER DATED 03/02/2016 DECISION OF ITAT KOLKATA BENCH IN CASE OF USHA MART INE TELEMATICS LTD. VS ITO IN ITA NO.516/KOL/2010 BY OR DER DATED 19/01/2012 12. WE ARE REPRODUCING THE OBSERVATION OF HONBLE ITAT DELHI BENCH IN CASE OF NHPC LTD. VS ACIT(SUPRA) ON SIMILAR ISSUE, WHEREIN ALL THE ABOVE DECISIONS RELIED BY TH E LD. COUNSEL HAS BEEN REFERRED TO AND RELIED AS UNDER: 20. THE REVENUE HAS ALSO PREFERRED AN APPEAL, FOR ASSE SSMENT YEARS 2004-05 AND 2005-06 VIDE APPEAL NOS. 422 & 423/DEL/ 2013 RAISING FOLLOWING GROUNDS :- (1) WHETHER THE LD. CIT (A) WAS RIGHT IN LAW I N DELETING THE INTEREST AMOUNTING TO RS. 76,52,089/- CHARGED U/S. 234B OF T HE ACT, SINCE CHARGING OF INTEREST U/S. 234-B IS CONSEQUENTIAL IN NATURE (2) WHETHER THE LD. CIT (A) WAS RIGHT IN LAW I N DELETING THE INTEREST AMOUNTING TO RS. 76,52,089/- CHARGED U/S. 234B OF T HE ACT CONSEQUENT TO THE ADDITION MADE IN PURSUANT TO THE AMENDED PROVISIONS OF SECTION 115JB OF THE ACT (3) THAT THE APPELLANT CRAVES FOR THE PERMISSI ON TO ADD, DELETE OR AMEND THE GROUNDS OF APPEAL BEFORE OR AT THE TIME O F HEARING OF APPEAL. 21. THE MAIN GROUND OF THE REVENUE'S APPEAL IS REGARDI NG DELETION OF INTEREST CHARGED UNDER SECTION 234B OF THE ACT CONS EQUENT TO THE ADDITION MADE BY ASSESSING OFFICER UNDER SECTION 15 4 OF THE ACT ARISING ON ACCOUNT OF RETROSPECTIVE AMENDMENT U/S. 115JB OF THE ACT. WE HAVE ALREADY HELD IN THE APPEAL OF THE ASSESSEE, WE HAVE ALREADY HELD THAT THE PROVISIONS OF SECTION 154(1A) OF THE ACT PROHIB ITS THE ACTIONS TAKEN BY THE ASSESSING OFFICER AND HELD THAT THE ORDER PASSE D UNDER SECTION 154 OF THE ACT BY THE ASSESSING OFFICER ARE INVALID AND , THEREFORE, THESE APPEALS BY THE REVENUE ARE ALSO ARISING FROM THAT O RDER, WE DISMISS BOTH THE GROUNDS OF REVENUE'S APPEALS. 22. EVEN ON THE MERITS OF THE APPEAL OF REVENUE, ISSUE IS DECIDED AGAINST THE REVENUE. ON IDENTICAL ISSUE CONSIDERING LEVY OF INTEREST U/S. 234B OF THE ACT ON RETROSPECTIVE AMENDMENT IN SECTION 115JB OF THE ACT HONOURABLE BOMBAY HIGH COURT IN [2015] 60 TAXMANN.C OM 303/234 TAXMAN 133/379 ITR 36CIT V. JSW ENERGY LTD. HAS HEL D THAT INTEREST PAGE 11 OF 16 ITA NO.2508/BANG/2019 U/S. 234B OF THE ACT CANNOT BE CHARGED WHEN LIABILI TY ON THE ASSESSEE HAS ARISEN BECAUSE OF RETROSPECTIVE AMENDMENT IN TH E ACT. HONOURABLE HIGH COURT HAS HELD AS UNDER : 11. THEN, MR. TEJVEER SINGH VEHEMENTLY CONTENDED TH AT IN RELATION TO QUESTION NO. 2, THE FINDINGS REQUIRE DETAILED PROBE BY THIS COURT. HE SUBMITS THAT THE TRIBUNAL WAS NOT RIGHT IN LAW W HEN IT HELD THAT NO INTEREST UNDER SECTION 234B OF THE I.T. ACT CAN BE LEVIED. THOUGH SEVERAL ITEMS HAVE TO BE CALCULATED WHILE CO MPUTING BOOK PROFIT AND IN TERMS OF EXPLANATION TO SECTION 115JB OF THE I.T. ACT, THAT EXPLANATION HAS BEEN BROUGHT ON THE STATUTE BO OK AND WITH RETROSPECTIVE EFFECT FROM 1ST APRIL, 2001, THEREFOR E, THIS CALCULATION OF THE TRIBUNAL IS ERRONEOUS IN LAW. 12. HOWEVER, MR. KAKA, LEARNED SENIOR COUNSEL INVIT ED OUR ATTENTION TO SECTION 234B OF THE I.T. ACT TO SUBMIT THAT THIS IS PROVISION TO RECOVER INTEREST FOR DEFAULT IN PAYMENT OF ADVANCE TAX. IT DIRECTS PAYMENT OF SIMPLE INTEREST AND IN TERMS OF THIS PRO VISION PROVIDED ANY ASSESSEE WHO IS LIABLE TO PAY ADVANCE TAX UNDER SECTION 208 HAS FAILED TO PAY SUCH TAX OR WHERE THE ADVANCE TAX PAID IS LESS THAN 90% OF THE ASSESSED TAX. THUS, THIS IS A PROVI SION WHEREUNDER INTEREST COULD BE RECOVERED WHEREIN ADVA NCE TAX FOR THE ASSESSMENT YEAR FAILS TO TAKE NOTE OF THE AMEND MENT TO THE INCOME TAX ACT WHICH IS BROUGHT IN SUBSEQUENTLY. WH EN THE PARLIAMENT STEPPED INTO TO AMEND THE ACT THOUGH WIT H RETROSPECTIVE EFFECT BUT IN 2008, THEN, THERE IS NO DEFAULT IN PAYMENT OF ADVANCE TAX FOR THE ASSESSMENT YEAR 2006 -07. THE COMPUTATION OF INCOME BASED ON WHICH THE ADVANCE TA X WAS PAID WAS IN TUNE WITH THE LAW PREVAILING ON THE DATE ON WHICH TAX WAS DUE AND PAYABLE. ANY FURTHER ADDITION IN THE INCOME BY WAY OF AMENDED PROVISIONS AND WHICH WERE INCORPORATED SUBS EQUENTLY, THEREFORE, DOES NOT ATTRACT PAYMENT OF INTEREST AS THERE IS NO DEFAULT. 13. MR. KAKA ALSO INVITED OUR ATTENTION TO SE CTION 115JB AND PARTICULARLY, INSERTION OF CLAUSE (H) IN EXPLANATIO N (1). THAT CLAUSE READS AS UNDER : '(H) THE AMOUNT OF DEFERRED TAX AND THE PROVISION THEREFOR.' 14. THIS CLAUSE HAS BEEN SUBSTITUTED BY FINA NCE ACT, 2008 WITH RESTROSPECTIVE EFFECT FROM 1ST APRIL, 2001. PRIOR T O THE SAME IT READ AS UNDER : PRIOR TO ITS SUBSTITUTION, READ AS UN DER : '4. SUBSTITUTED FOR THE PORTION BEGINN ING WITH THE WORDS 'IF ANY AMOUNT REFERRED' AND ENDING WITH THE WORDS 'AS REDU CED BY ' BY THE FINANCE ACT, 2008, W.R.E.F. 1.4.2001.' 'IF ANY AMOUNT REFERRED TO IN CLAUSES (A) TO (G), IS DEBITED TO THE PROFIT AND LOSS ACCOUNT, AND AS REDUCED BY....' PAGE 12 OF 16 ITA NO.2508/BANG/2019 15. THE TRIBUNAL IN THIS REGARD NOTED RIVAL CONTENTIONS AND THE ADMITTED FACTS. IT ALSO RELIED UPON AND FOLLOWED TH E JUDGMENT OF HON'BLE CALCUTTA HIGH COURT IN EMAMI LTD. V. CIT [2 011] 337 ITR 470/200 TAXMAN 326/12 TAXMANN.COM 64. 16. IN PARAGRAPH 13 OF THE TRIBUNAL'S IMPUGNE D ORDER THE RELEVANT PORTION FROM CALCUTTA HIGH COURT'S JUDGMENT HAS BEE N EXTRACTED. THE CALCUTTA HIGH COURT, THEREFORE, FOUND THAT THE PROVISIONS WOULD INDICATE THAT THEY ARE MANDATORY. THERE IS NO SCOPE FOR WAIVING OF THE PROVISION. HOWEVER, IN ORDER TO ATTR ACT THE PROVISIONS CONTAINED IN SECTION 234B AND 234C OF TH E ACT, IT MUST BE ESTABLISHED THAT THE ASSESSEE HAD THE LIABILITY TO PAY ADVANCE TAX AS PROVIDED UNDER SECTIONS 207 AND 208 OF THE I .T. ACT WITHIN THE TIME PRESCRIBED UNDER SECTION 211 OF THAT ACT. NOTING THE RIVAL CONTENTIONS, THE CALCUTTA HIGH COURT PROCEEDED TO H OLD THAT THE LAST DATE OF RELEVANT FINANCIAL YEAR WAS 31ST MARCH , 2001 AND ON THAT DATE, ADMITTEDLY, THE APPELLANT BEFORE IT HAD NO LIABILITY TO PAY ANY AMOUNT OF ADVANCE TAX IN ACCORDANCE WITH TH E THEN LAW PREVAILING IN THE COUNTRY. CONSEQUENTLY, THE APPELL ANT PAID NO ADVANCE TAX AND SUBMITTED ITS REGULAR RETURNS ON 31 ST OCTOBER 2001, WITHIN THE TIME FIXED BY LAW WHEREIN IT DECLA RED ITS TOTAL INCOME AND THE BOOK PROFIT BOTH AS NIL. THE AMENDME NT TO SECTION 115JB BY VIRTUE OF FINANCE ACT, 2002 AND WHICH WAS REFERRED TO IN THE CALCUTTA HIGH COURT JUDGMENT HAS RETROSPECTI VE EFFECT FROM 1ST APRIL, 2001. 17. IN THE PRESENT CASE, WHAT THE ASSESSEE HA S POINTED OUT IS THAT SOME OF THE AMOUNTS INCLUDED IN THE BOOK PROFITS AS PER EXPLANATION (H) TO SECTION 115JB WERE BROUGHT IN BY THE FINANCE ACT, 2008 WITH RETROSPECTIVE EFFECT FROM 1ST APRIL, 2001. THE ASSESSEE CANNOT BE HELD TO BE LIABLE FOR FAILING TO MAKE A PROVISION FOR PAYMENT OF ADVANCE TAX WHICH WAS NOT POSSIBLE ON THE LAST DATE AS PER THE LAW THEN PREVAILING. THUS, CLAUSE (H) WHICH IS REPRODUCED ABOVE HAVING BEEN BROUGHT IN WI TH RETROSPECTIVE EFFECT BUT BY FINANCE ACT 2008, THE A DVANCE TAX COMPUTATION BY THE ASSESSEE FOR THE YEAR 2006-07 CA NNOT BE FAULTED AND IT CANNOT BE SAID THAT THE ASSESSEE IS IN DEFAULT AND THEREFORE, THERE IS ANY LIABILITY TO PAY INTEREST I N TERMS OF SECTION 234B OF THE INCOME TAX ACT, 1961. 18. IN THE CASE OF STAR INDIA (P.) LTD. V. C CE [2006] 280 ITR 321/150 TAXMAN 128 THE HON'BLE SUPREME COURT HELD THAT THE SERVICE OF 'BROADCASTING' WAS MADE A TAXABLE SERVICE WITH EFFE CT FROM JULY 16, 2001, BY THE FINANCE ACT, 2001. THE APPELLANT D ISPUTED ITS LIABILITY TO MAKE ANY PAYMENT FOR SERVICE TAX ON TH E GROUND THAT IT DID NOT BROADCAST. THE COMMISSIONER, HOWEVER, HELD AGAINST THE APPELLANT. THE MATTER WAS CARRIED BEFORE THE COMMIS SIONER OF INCOME TAX (APPEALS) AND DURING PENDENCY OF APPEAL THE FINANCE PAGE 13 OF 16 ITA NO.2508/BANG/2019 ACT, 2001 WAS AMENDED BY THE FINANCE ACT, 2002. THE EFFECT OF AMENDMENT, INTER ALIA, WAS TO MAKE AN AGENT, SUCH A S THE APPELLANT, BEFORE THE SUPREME COURT, LIABLE TO PAY SERVICE TAX AS BROADCASTER. 19. THE SUPREME COURT NOTED THAT THE APPELLANT S' APPEAL PENDING BEFORE THE COMMISSIONER WAS REJECTED BY HIM ON THE BASIS OF THIS AMENDMENT. THE TRIBUNAL ALSO MAINTAINED THIS ORDER AND THAT PART OF THE ORDER PASSED BY THE COMMISSIONER WAS NO T CHALLENGED IN APPEAL. HOWEVER, THE APPELLANT WAS AGGRIEVED BY THE FACT THAT THE TRIBUNAL HELD IT LIABLE TO PAY INTEREST ON THE AMOUNT WHICH IT WAS REQUIRED TO PAY BY REASON OF THE 2002 AMENDMENT . THE ASSESSEE CONTENDED THAT ONCE THE AMENDMENT WAS BROU GHT IN, PENDING THE APPEAL, THERE WAS NO QUESTION OF APPLYI NG SECTION 234B OR ANY ANALOGUS PROVISION AND PAYMENT OF INTER EST. IT IS IN THAT REGARD THAT THE HON'BLE SUPREME COURT HELD AS UNDER: '7. IN ANY EVENT, IT IS CLEAR FROM TH E LANGUAGE OF THE VALIDATION CLAUSE, AS QUOTED BY US EARLIER, THAT TH E LIABILITY WAS EXTENDED NOT BY WAY OF CLARIFICATION BUT BY WAY OF AMENDMENT TO THE FINANCE ACT WITH RETROSPECTIVE EFF ECT. IT IS WELL ESTABLISHED THAT WHILE IT IS PERMISSIBLE FOR T HE LEGISLATURE TO RETROSPECTIVELY LEGISLATE, SUCH, RET ROSPECTIVITY IS NORMALLY NOT PERMISSIBLE TO CREATE AN OFFENCE RETROSPECTIVELY. THERE WERE CLEARLY JUDGMENTS, DECR EES OR ORDERS OF COURTS AND TRIBUNALS OR OTHER AUTHORITIES , WHICH REQUIRED TO BE NEUTRALISED BY THE VALIDATION CLAUSE . WE CAN ONLY ASSUME THAT THE JUDGMENTS, DECREE OR ORDERS, E TC., HAD, IN FACT, HELD THAT PERSONS SITUATE LIKE THE APPELLA NTS WERE NOT LIABLE AS SERVICE PROVIDERS. THIS IS ALSO CLEAR FROM THE EXPLANATION TO THE VALUATION SECTION WHICH SAYS THA T NO ACT OR ACTS ON THE PART OF ANY PERSON SHALL BE PUNISHAB LE AS AN OFFENCE WHICH WOULD NOT HAVE BEEN SO PUNISHABLE IF THE SECTION HAD NOT COME INTO FORCE. 8. THE LIABILITY TO PAY INTEREST WOUL D ONLY ARISE ON DEFAULT AND IS REALLY IN THE NATURE OF A QUASI-PUNISHMENT. SUCH LIABILITY ALTHOUGH CREATED RETROSPECTIVELY COULD NO T ENTAIL THE PUNISHMENT OF PAYMENT OF INTEREST WITH RETROSPECTIV E EFFECT.' 20. THE SUPREME COURT HELD THAT THE LIABILITY TO PAY INTEREST WOULD ONLY ARISE ON DEFAULT AND IS REALLY IN THE NATURE O F A QUASI PUNISHMENT. THE LIABILITY TO TAX ALTHOUGH CREDITED RETROSPECTIVELY COULD NOT ENTAIL THE PUNISHMENT OF PAYMENT OF INTER EST WITH RETROSPECTIVE EFFECT. IT IS THIS PRINCIPLE WHICH HA S BEEN LAID DOWN WHICH IS FOLLOWED BY THE CALCUTTA HIGH COURT. IT IS THAT PRINCIPLE RELIED UPON BY THE CALCUTTA HIGH COURT WHICH HAS BE EN APPLIED BY THE TRIBUNAL TO THE FACTS AND CIRCUMSTANCES OF T HE PRESENT CASE. WE DO NOT THINK THAT THE ASSESSEE BEFORE US C AN BE CALLED PAGE 14 OF 16 ITA NO.2508/BANG/2019 UPON TO PAY INTEREST IN TERMS OF SECTION 234B, ONCE THE EXPLANATION WAS INTRODUCED OR BROUGHT IN WITH RETRO SPECTIVE EFFECT BUT BY FINANCE ACT, 2008. THEN, THERE WAS NO LIABIL ITY TO PAY INTEREST IN TERMS OF THIS PROVISION. THAT WAS BECAU SE THE ASSESSEE CANNOT BE TERMED AS DEFAULTER IN PAYMENT OF ADVANCE TAX. THE ADVANCE TAX COMPUTATION ON THE BASIS OF THE UNAMEND ED (SIC) PROVISION THEREFORE COULD NOT HAVE BEEN ENTERTAINED . 21. WE DO NOT SEE ANY BROADER OR WIDER QUESTI ON ARISING FOR OUR DETERMINATION AS THE VIEW TAKEN EVEN ON THIS QUESTI ON IS NEITHER PERVERSE OR NEITHER VITIATED BY ANY ERROR OF LAW AP PARENT ON THE FACE OF THE RECORD.' 23. THEREFORE, RESPECTFULLY FOLLOWING THE DECISION OF HONOURABLE BOMBAY HIGH COURT WE ALSO HOLD THAT NO INTEREST SHA LL BE CHARGEABLE U/S. 234B OF THE ACT ON TAX LIABILITY ARISING ON TH E ASSESSEE BY VIRTUE OF RETROSPECTIVE AMENDMENT U/S. 115JB OF THE ACT 13. THEREFORE, RESPECTFULLY FOLLOWING THE DECISIONS REPRODUCED HEREINABOVE, WE ALSO HOLD THAT NO INTERE ST SHALL BE CHARGEABLE UNDER SECTION 234B AND C OF THE ACT ON T AX LIABILITY ARISING ON ASSESSEE BY VIRTUE OF RETROSPECTIVE AMEN DMENT UNDER SECTION 115 JB OF THE ACT. ACCORDINGLY, THE GROUNDS RAISED BY REVENUE STANDS DISMISSED. IN THE RESULT APPEAL FILED BY REVENUE STANDS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT ON 8 TH MARCH, 2021 SD/- SD/- (CHANDRA POOJARI) (BEENA PILLAI) ACCOUNTANT MEMBER JUDICIAL ME MBER BANGALORE, DATED, THE 8 TH MARCH, 2021. /VMS/ PAGE 15 OF 16 ITA NO.2508/BANG/2019 COPY TO : 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE PAGE 16 OF 16 ITA NO.2508/BANG/2019 DATE INITIAL 1. DRAFT DICTATED ON ON DRAGON SR.PS 2. DRAFT PLACED BEFORE AUTHOR -3-2021 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER -3-2021 JM/AM 4. DRAFT DISCUSSEDAPPROVED BY SECOND MEMBER. -3-2021 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS -3-2021 SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON -3-2021 SR.PS 7. DATE OF UPLOADING THE ORDER ON WEBSITE -3-2021 SR.PS 8. IF NOT UPLOADED, FURNISH THE REASON -- SR.PS 9. FILE SENT TO THE BENCH CLERK -3-2021 SR.PS 10. DATE ON WHICH FILE GOES TO THE AR 11. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 12. DATE OF DISPATCH OF ORDER. 13. DRAFT DICTATION SHEETS ARE ATTACHED NO SR.PS