DCIT, New Delhi V. M/s Bharat Aluminium Co. ltd., New Delhi

ITA 2825/DEL/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 53310 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 6 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 16-11-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 07-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS GEETMALA MOHNANEY
• Keywords: Recovery proceedings; Depreciation; Deemed to accrue or arise in india; Retrospective amendment
• Section: 234B; 115JB; 6; 263; 15; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI A BENC H BEFORE SHRI I.P. BANSAL, JM & SHRI A.N. PAHUJA, AM ITA NO.2825/DEL/2010 ASSESSMENT YEAR:2007-08 D.C.I.T.,CIRCLE 2(1), NEW DELHI. V/S . M/S BHARAT ALUMINIUM COMPANY LTD., CORE-6, SCOPE COMPLEX, LODI ROAD, NEW DELHI [PAN NO.: AAACB 1290 N] (APPELLANT) (RESPONDENT) ASSESSEE BY SHRI AJAY VOHRA, AR REVENUE BY MRS. GEETMALA MOHNANEY, DR DATE OF HEARING 16-11-2011 DATE OF PRONOUNCEMENT 09-12-2011 O R D E R A.N.PAHUJA:- THIS APPEAL FILED ON 7 TH JUNE, 2010 BY THE REVENUE ON AGAINST AN ORDER DATED 29.03.2010 OF THE LEARNED CIT(A)-V, NEW DELHI, RAISES THE FOLLOWING GROUNDS:- 1. THE LEARNED CIT(A) ERRED ON FACTS AND IN LAW IN DIRECTING TO DELETE THE INTEREST OF ` `2,24,28,120/- CHARGED U/S 234C OF THE INCOME-TAX ACT ON THE ACCOUNT OF DEFERRED PAYMENT OF ADVANCE TAX IGNORING THE PROVISIONS OF S UB- SECTION 5 OF SECTION 115JB OF THE INCOME-TAX ACT, W HICH CLEARLY IMPLIES THAT IN A CASE WHERE TAX IS PAYABLE UNDER THE SPECIAL PROVISIONS OF INCOME-TAX ACT (HERE MAT CASE), ALL PROVISIONS OF THE INCOME-TAX ACT SHALL A PPLY TO THE ASSESSEE AND HENCE THE PROVISIONS OF SECTION 20 7 TO 211 ARE APPLICABLE IN THE ASSESSEES CASE. 2. THAT THE APPELLANT CRAVES LEAVE FOR RESERVING THE R IGHT TO AMEND, MODIFY OR ALTER ADD OR FOREGO ANY GROUND(S) OF APPEAL AT ANY TIME BEFORE OR DURING THE HEARING OF THE APPEAL. 2. THIS APPEAL, EARLIER DISPOSED VIDE ORDER DATED 2 9.10.2010 ,WAS RECALLED IN MA NO.121/DEL./2011 VIDE ORDER DATED 5.8.2011. ADVE RTING NOW TO GROUND NO.1 IN THE APPEAL, FACTS, IN BRIEF, AS PER RELEVANT ORDERS ARE THAT RETURN DECLARING BOOK ITA N O.2825 /DEL./2010 2 PROFITS OF ` ` 923,02,07,861/- IN TERMS OF PROVISIONS OF SEC. 115J B OF THE INCOME- TAX ACT, 1961 (HEREAFTER REFERRED TO AS THE ACT) FI LED ON 27 TH OCTOBER, 2007 BY THE ASSESSEE, WAS PROCESSED ON 25 TH FEBRUARY, 2009 U/S 143(1) OF THE ACT, RESULTING IN REFUND OF ` 3,84,20,761/-. WHILE PROCESSING THE RETURN, THE AS SESSING OFFICER (IN SHORT A.O.) NOTICED THAT THE ASSESSEE PAID FOLL OWING AMOUNT OF ADVANCE TAX: DATE AMOUNT [IN ` ] 14.6.2005 3,50,00,000 15.9.2005 11,00,00,000 14.12.2005 31,00,00,000 14.3.2006 63,00,00,000 TOTAL 108,50,00,000 2.1. SINCE THE ASSESSEE DEFERRED ITS ADVANCE T AX LIABILITY AND FAILED TO PAY VARIOUS INSTALMENTS OF ADVANCE TAX AT THE PRESCRIB ED PERCENTAGE IN TERMS OF PROVISIONS OF SEC. 211 OF THE ACT, THE AO LEVIED IN TEREST OF ` `2,24,28,120/- U/S 234C OF THE ACT WHILE PROCESSING THE RETURN. SUBSE QUENTLY, ON 23.3.2009 ,THE ASSESSEE FILED AN APPLICATION 154 OF THE ACT ,MENTI ONING THAT INTEREST U/S 234C OF THE ACT WAS NOT LEVIABLE IN VIEW OF DECISION OF HO NBLE SUPREME COURT IN THE CASE OF CIT VS. KWALITY BISCUITS LIMITED,284 ITR 43 4(SC).ACCORDINGLY, THE ASSESSEE SOUGHT DELETION OF INTEREST. HOWEVER, THE A.O. REJECTED THE SAID APPLICATION ON THE GROUND THAT THE INTEREST U/S 234 C OF THE ACT IN CASE OF BOOK PROFITS DETERMINED U/S 115JB OF THE ACT WAS A QUES TION OF LAW ON WHICH DIFFERENT OPINIONS EXIST AND THUS, THE THERE WAS NO MISTAKE APPARENT FROM THE RECORD , AND CONSEQUENTLY, THE LEVY OF INTEREST U/S 234C OF THE ACT DID NOT FALL WITHIN THE AMBIT OF PROVISIONS OF SEC. 154 OF THE ACT. INTER ALIA, T HE AO OBSERVED THAT THE DECISION OF THE HONBLE APEX COURT IN KWALITY BISCUITS LIMIT ED,(SUPRA) WAS CONSIDERED BY THE HONBLE HIGH COURT IN CIT VS. GEETHA RAMAKRISH NA MILLS (P) LTD., 288 ITR 489 (MAD.) AND LEVY OF INTEREST U/S 234B & 234C OF THE ACT ON TAX CALCULATED ON THE BOOK PROFITS DETERMINED U/S 115J OF THE ACT, HA D BEEN UPHELD IN THE SAID DECISION. EVEN SLP AGAINST THE SAID DECISION HAD BE EN DISMISSED BY THE HONBLE APEX COURT. ACCORDINGLY, THE AO CONCLUDED THAT THE ISSUE BEING AMENABLE TO ITA N O.2825 /DEL./2010 3 DIFFERENT INTERPRETATIONS CANNOT BE SUBJECT MATTER OF RECTIFICATION U/S 154 OF THE ACT. 3. ON APPEAL, THE LEARNED CIT(A) DELETED THE INTERE ST CHARGED U/S 234C OF THE ACT IN THE FOLLOWING TERMS:- 4. I HAVE CONSIDERED THE SUBMISSIONS OF THE APPEL LANT. THERE IS NO DISPUTE AFTER THE AMENDMENT U/S 143(1) OF THE AC T BY THE FINANCE ACT, 1999, THE PROCESSING OF RETURN IS NO M ORE AN ASSESSMENT BUT IT IS INTIMATION. THERE IS NO DISPU TE ABOUT THE LAW THAT THE JURISDICTION AS AVAILABLE U/S 143(1) TO TH E ASSESSING OFFICER IS ONLY CONFINED TO THE PRIMA FACIE ADJUSTMENT AND NOT ON THE ISSUES, WHICH ARE DEBATABLE ONES. IN THE INSTANT C ASE, THE ASSESSING OFFICER, WHILE PASSING THE ORDER U/S 154 OF THE ACT, HAS HIMSELF ADMITTED THE FACT THAT THE ISSUE OF CHARGIN G OF INTEREST U/S 234B AND 234C WHILE PROCESSING THE RETURN IS A DEBA TABLE ISSUE BECAUSE VARIOUS HIGH COURTS HAVE GIVEN DIFFERENT VE RDICTS. 5. WHILE CONSIDERING THE FACTS OF THE CASE, THE FIN AL ACCOUNTS OF THE ASSESSEE IS PREPARED AFTER THE ACCOUNTING YEAR IS OVER AND NECESSARY AUDIT OF ACCOUNTS IS DONE IN DUE COURSE. THE MAT INCOME CANNOT BE KNOWN TO A COMPANY DURING THE PREV IOUS YEAR, AS HE IS NOT AWARE OF WHERE HE STANDS FOR COMPUTATION OF ADVANCE TAX ON MAT INCOME. THEREFORE, LEVY OF INTEREST U/S 234 B AND 234C IS NOT POSSIBLE IN SUCH CASE WHERE MAT INCOME IS DECID ING FACTOR FOR CHARGEABILITY OF TAX. 6. THE DEBATABLENESS OF THE ISSUE IS ALSO APPARENT FROM THE JUDGMENTS OF VARIOUS HIGH COURTS AS DISCUSSED ABOVE . THE MADRAS HIGH COURT IN THE CASE OF GEETHA RAMAKRISHNA HAS GIVEN THE JUDGMENT IN FAVOUR OF THE REVENUE, WHEREAS IN T HE CASE OF SNOWCEM THE BOMBAY HIGH COURT HAS GIVEN THE JUDGMEN T IN FAVOUR OF THE ASSESSEE. IN VIEW OF SUCH LEGAL POSITION AN D KEEPING INTO CONSIDERATION THE JURISDICTION AVAILABLE U/S 143(1) OF THE ACT, WHICH IS AKIN TO THE JURISDICTION AVAILABLE U/S 154 OF TH E ACT, THE INTEREST AS CHARGED BY THE ASSESSING OFFICER U/S 234C OF THE AC T IN PROCESSING OF RETURN U/S 143(1) IS NOT IN ACCORDANCE WITH LAW AND IS REQUIRED TO BE DELETED. IT IS AGAIN REMINDED THAT THE ASSESSIN G OFFICER HAD NOT CHARGED 234C INTEREST U/S 143(1) ON THE SAME INCOME COMPUTED UNDER MAT. THE ASSESSING OFFICER IS DIRECTED TO DE LETE THE INTEREST CHARGED U/S 234C OF THE ACT AT ` `2,24,28,130/-. ITA N O.2825 /DEL./2010 4 4. THE REVENUE IS NOW IN APPEAL BEFORE US AGAINST T HE AFORESAID FINDINGS OF LEARNED CIT(A).THE LD. DR WHILE SUPPORTING THE ORDE R OF THE AO, CONTENDED THAT LEVY OF INTEREST BEING MANDATORY, THE LD. CIT(A) WA S NOT JUSTIFIED IN DELETING SUCH INTEREST. INTER ALIA, THE LEARNED DR RELIED UPON T HE DECISIONS IN JT. CIT MUMBAI VS. ROLTA INDIA LTD.330 ITR 470 (SC); CIT VS. RANA SUGARS LTD. (2011) TIOL-573 HC (P&H)AND CIT VS. STEEL STEIPS LEASING LTD.,338 ITR 455(P&H) . 5. ON THE OTHER HAND, THE LD. AR ON BEHALF OF THE A SSESSEE SUBMITTED THAT HE ISSUE BEING DEBATABLE WAS OUTSIDE THE SCOPE OF PRO VISIONS OF SECTION 143 (1) OF THE ACT. WHILE REFERRING TO DECISION IN CIT VS. SMT . PREMLATA JALANI (2003) 264 ITR 744(RAJ); DCIT VS. SURYA ROSHINI LTD. (2006) 8 SOT 470 AND JCIT VS. ROLTA INDIA 330 ITR 470(SC) THE LD. AR CONTENDED THAT DEB ATE IS NOT OBLITERATED BY THE SUBSEQUENT DECISION OF THE APEX COURT. IN THIS C ONNECTION, THE LEARNED AR RELIED UPON THE DECISION IN CIT VS. MAX INDIA, 295 ITR 282(SC); CIT VS. PALANI ANDAVAR COTTON & SYNTHETIC SPINNERS LTD., 326 ITR 3 39 (MADRAS) AND JIYAJEERAO COTTON MILLS LIMITED. VS. ITO,130 ITR 710 (CALCUTTA ). 6. WE HAVE HEARD BOTH THE PARTIES AND GONE TH ROUGH THE FACTS OF THE CASE AS ALSO AFORESAID DECISIONS RELIED UPON BY BOTH THE SI DES. BEFORE PROCEEDING FURTHER, WE MAY HAVE A LOOK AT THE RELEVANT PROVISIONS OF SE C. 143(1) OF THE ACT, WHICH READ AS UNDER: 143. ASSESSMENT. (1) WHERE A RETURN HAS BEEN MADE UNDER SECTION 139, OR IN RESPONSE TO A NOTICE UNDER SUB-SECTION (1) OF SECTION 142,-- (I) IF ANY TAX OR INTEREST IS FOUND DUE ON THE BASI S OF SUCH RETURN, AFTER ADJUSTMENT OF ANY TAX DEDUCTED AT SOURCE, ANY ADVANCE TAX PAID, ANY TAX PAID ON SELF-ASSESSMENT AND ANY AMOUN T PAID OTHERWISE BY WAY OF TAX OR INTEREST, THEN, WITHOUT PREJUDICE TO THE PROVISIONS OF SUB-SECTION (2), AN INTIMATION SHALL BE SENT TO THE ASSESSEE SPECIFYING THE SUM SO PAYABLE, AND SUCH IN TIMATION SHALL BE DEEMED TO BE A NOTICE OF DEMAND ISSUED UNDER SEC TION 156 AND ALL THE PROVISIONS OF THIS ACT SHALL APPLY ACCORDIN GLY; AND ITA N O.2825 /DEL./2010 5 (II) IF ANY REFUND IS DUE ON THE BASIS OF SUCH RETU RN, IT SHALL BE GRANTED TO THE ASSESSEE AND AN INTIMATION TO THIS E FFECT SHALL BE SENT TO THE ASSESSEE: PROVIDED THAT EXCEPT AS OTHERWISE PROVIDED IN THIS SUB-SECTION, THE ACKNOWLEDGMENT OF THE RETURN SHALL BE DEEMED TO BE INTIMATION UNDER THIS SUB-SECTION WHERE EITHER NO SUM IS PAYAB LE BY THE ASSESSEE OR NO REFUND IS DUE TO HIM: PROVIDED FURTHER THAT NO INTIMATION UNDER THIS SUB- SECTION SHALL BE SENT AFTER THE EXPIRY OF ONE YEAR FROM THE END OF T HE FINANCIAL YEAR IN WHICH THE RETURN IS MADE: PROVIDED ALSO THAT WHERE THE RETURN MADE IS IN RESP ECT OF THE INCOME FIRST ASSESSABLE IN THE ASSESSMENT YEAR COMM ENCING ON THE 1ST DAY OF APRIL, 1999, SUCH INTIMATION MAY BE SENT AT ANY TIME UP TO THE 31ST DAY OF MARCH, 2002. 6.1 IT MAY BE POINTED OUT THAT SUBSTANTIAL CHANG ES HAVE BEEN MADE TO SECTION 143(1) OF THE ACT WITH EFFECT FROM JUNE 1, 1999. UP TO MARCH 31, 1989, AFTER A RETURN OF INCOME WAS FILED THE AO COULD MAKE AN ASS ESSMENT UNDER SECTION 143(1) WITHOUT REQUIRING THE PRESENCE OF THE ASSESS EE OR PRODUCTION BY HIM OF ANY EVIDENCE IN SUPPORT OF THE RETURN. WHERE THE AS SESSEE OBJECTED TO SUCH AN ASSESSMENT OR WHERE THE OFFICER WAS OF THE OPINION THAT THE RETURN WAS INCORRECT OR INCOMPLETE OR THE OFFICER DID NOT COMPLETE THE A SSESSMENT UNDER SECTION 143(1), BUT WANTED TO MAKE AN INQUIRY, A NOTICE UND ER SECTION 143(2) WAS REQUIRED TO BE ISSUED TO THE ASSESSEE REQUIRING HIM TO PRODUCE EVIDENCE IN SUPPORT OF HIS RETURN. AFTER CONSIDERING THE MATERI AL AND EVIDENCE PRODUCED AND AFTER MAKING NECESSARY INQUIRIES, THE OFFICER HAD P OWER TO MAKE ASSESSMENT UNDER SECTION 143(3). WITH EFFECT FROM APRIL 1, 198 9, THE PROVISIONS UNDERWENT SUBSTANTIAL AND MATERIAL CHANGES. A NEW SCHEME WAS INTRODUCED AND IN THE NEW SUBSTITUTED SECTION 143(1) PRIOR TO THE SUBSEQUENT SUBSTITUTION WITH EFFECT FROM JUNE 1, 1999, IN CLAUSE (A), A PROVISION WAS MADE T HAT WHERE A RETURN WAS FILED UNDER SECTION 139 OR IN RESPONSE TO A NOTICE UNDER SECTION 142(1), AND ANY TAX OR REFUND WAS FOUND DUE ON THE BASIS OF SUCH RETURN AF TER ADJUSTMENT OF TAX DEDUCTED AT SOURCE, ANY ADVANCE TAX OR ANY AMOUNT P AID OTHERWISE BY WAY OF TAX OR INTEREST, AN INTIMATION WAS TO BE SENT WITHOUT P REJUDICE TO THE PROVISIONS OF ITA N O.2825 /DEL./2010 6 SECTION 143(2) TO THE ASSESSEE SPECIFYING THE SUM S O PAYABLE AND SUCH INTIMATION WAS DEEMED TO BE A NOTICE OF DEMAND ISSU ED UNDER SECTION 156. THE FIRST PROVISO TO SECTION 143(1)(A) ALLOWED THE DEPA RTMENT TO MAKE CERTAIN ADJUSTMENTS IN THE INCOME OR LOSS DECLARED IN THE R ETURN. THEY WERE AS FOLLOWS : (I) AN ARITHMETICAL ERRORS IN THE RETURN, ACCOUNTS AND DOCUMENTS ACCOMPANYING IT WERE TO BE RECTIFIED ; (II) ANY LOSS CARRIED FORWARD, DEDUCTION, ALLOWANCE OR RELIEF, WHICH, ON THE BASIS OF THE INFORMATION AVAILABLE IN SUCH RETURN, ACCOUNTS OR DOCUMENTS, WAS PRIMA FACIE ADMISSIBLE, BUT WHICH WAS NOT CLAIMED IN THE RETURN , WAS TO BE ALLOWED ; (III) ANY LOSS CARRIED FORWARD, RELIEF CLAIMED IN T HE RETURN, WHICH, ON THE BASIS OF THE INFORMATION AS AVAILABLE IN SUCH RETURN, ACCOUN TS OR DOCUMENTS WERE PRIMA FACIE INADMISSIBLE, WAS TO BE DISALLOWED. 6.2 BY MAKING ADJUSTMENTS UNDER THE FIRST PROVISO TO SECTION 143(1)(A) OF THE ACT, NO ADDITION WHICH IS IMPERMISSIBLE BY THE INFO RMATION GIVEN IN THE RETURN COULD BE MADE BY THE AO. HOWEVER, IN TERMS OF THE NEWLY SUBSTITUTED SECTION 143(1), WITH EFFECT FROM JUNE 1, 1999, EXCEPT AS PR OVIDED IN THE PROVISION ITSELF, THE ACKNOWLEDGMENT OF THE RETURN IS DEEMED TO BE IN TIMATION UNDER SECTION 143(1) WHERE (A) EITHER NO SUM IS PAYABLE BY THE AS SESSEE OR (B) NO REFUND IS DUE TO HIM. THE INTIMATION UNDER SECTION 143(1) WAS DEEMED TO BE A NOTICE OF DEMAND UNDER SECTION 156, FOR THE APPARENT PURPOSE OF MAKING MACHINERY PROVISIONS RELATING TO RECOVERY OF TAX APPLICABLE. NO ADJUSTMENTS OF THE NATURE ENVISAGED IN THE OLD PROVISIONS ,WERE STIPULATED I N THE SUBSTITUTED PROVISIONS NOR IN THE INSTANT CASE, ADMITTEDLY, ANY SUCH ADJUSTMEN TS HAVE BEEN MADE. WHAT THE AO HAS DONE IN THE INSTANT CASE IS THAT HE HAS MERE LY DETERMINED THE TAX AND INTEREST DUE ON THE BASIS OF RETURN AFTER ADJUSTMEN T OF TDS AND ADVANCE TAX. THE ASSESSEE ITSELF MADE PAYMENT OF FOUR INSTALMENTS OF ADVANCE TAX ,BUT NOT AT THE RATES STIPULATED IN PROVISIONS OF SEC. 211 OF THE A CT. RESULTANTLY, THE AO WHILE PROCESSING THE RETURN U/S 143(1) OF THE ACT ,LEVIED INTEREST U/S 234C OF THE ACT ON ITA N O.2825 /DEL./2010 7 ACCOUNT OF DEFERMENT OF ADVANCE TAX SUCH INTEREST HAS BEEN CALCULATED ON THE BASIS OF INCOME RETURNED BY THE ASSESSEE IN TERMS O F PROVISIONS OF SEC. 115JB OF THE ACT. THE RELEVANT PORTION OF THE PROVISIONS OF SEC. 115JB OF THE ACT, READ AS UNDER: (4) EVERY COMPANY TO WHICH THIS SECTION APPLIES, S HALL FURNISH A REPORT IN THE PRESCRIBED FORM FROM AN ACCOUNTANT AS DEFINED I N THE EXPLANATION BELOW SUB-SECTION (2) OF SECTION 288, CERTIFYING TH AT THE BOOK PROFIT HAS BEEN COMPUTED IN ACCORDANCE WITH THE PROVISIONS OF THIS SECTION ALONG WITH THE RETURN OF INCOME FILED UNDER SUB-SECTION ( 1) OF SECTION 139 OR ALONG WITH THE RETURN OF INCOME FURNISHED IN RESPON SE TO A NOTICE UNDER CLAUSE (I) OF SUB-SECTION (1) OF SECTION 142. (5) SAVE AS OTHERWISE PROVIDED IN THIS SECTION, ALL OTHER PROVISIONS OF THIS ACT SHALL APPLY TO EVERY ASSESSEE, BEING A COMPANY, MENTIONED IN THIS SECTION. AS IS APPARENT FROM THE AFORESAID PROVISIONS, BOOK PROFITS RETURNED BY THE ASSESSEE ARE ON THE BASIS OF A REPORT IN THE PRESCR IBED FORM FROM AN ACCOUNTANT AS DEFINED IN THE EXPLANATION BELOW SUB-SECTION (2) OF SECTION 288, WHO CERTIFIED THAT THE BOOK PROFITS HAVE BEEN COMPUTED IN ACCORDA NCE WITH THE PROVISIONS OF THIS SECTION. THE BOOK PROFITS AS DETERMINED AND CE RTIFIED BY THE ACCOUNTANT ALONE FORMED THE BASIS OF DETERMINATION OF TAX AND INTERE ST U/S 234C OF THE ACT. IT IS NOT THE CASE OF THE ASSESSEE THAT THE AO MADE ANY ADJUSTMENT IN THE BOOK PROFITS. THE AO IS STATUTORILY DUTY BOUND TO COMPU TE TAX AND INTEREST IN TERMS OF PROVISIONS OF SEC. 234C READ WITH SEC. 115JB(5) OF THE ACT.THE RELEVANT CIRCULAR ISSUED BY THE CBDT IN THE CONTEXT OF LEVY OF INTERE ST U/S 234B & 234C ON THE TAX ON BOOK PROFITS DETERMINED IN TERMS OF PROVISIONS O F THE SEC. 115JB OF THE ACT READS AS UNDER: SUBJECT: LIABILITY FOR PAYMENT OF ADVANCE TAX UNDER NEW MAT PROVISIONS OF SECTION 115JB OF THE INCOME-TAX ACT. CIRCULAR NO. 13 OF 2001, DATED 9TH NOVEMBER, 2001. THE FINANCE ACT, 2000, INSERTED SECTION 115JB OF TH E INCOME-TAX ACT, 1961, WITH EFFECT FROM 1-4-2001, I,E., FROM THE ASSESSMENT YEA R 2001-02 PROVIDING FOR LEVY OF ITA N O.2825 /DEL./2010 8 MINIMUM ALTERNATE TAX ON COMPANIES. SECTION 115JB C ONCEPTUALLY DIFFERS FROM ERSTWHILE SECTION 115JA, WHICH PROVIDED FOR MAT ON COMPANIES, SO FAR AS IT DOES NOT DEEM ANY PART OR THE WHOLE OF BOOK PROFIT AS TO TAL INCOME. HOWEVER, THE NEW PROVISION OF SECTION 115JB PROVIDES THAT IF TAX PAY ABLE ON TOTAL INCOME IS LESS THAN 7.5% OF BOOK PROFIT, THE TAX PAYABLE UNDER THI S PROVISION SHALL BE 7.5% OF BOOK PROFIT. 2. INSTANCES HAVE COME TO THE NOTICE OF THE BOARD T HAT A LARGE NUMBER OF COMPANIES LIABLE TO TAX UNDER THE NEW MAT PROVISION S OF SECTION 115JB, ARE NOT MAKING ADVANCE TAX PAYMENTS. IT MAY BE EMPHASISED T HAT THE NEW PROVISION OF SECTION 115JB IS A SELF-CONTAINED CODE. SUB-SECTION (1) LAYS DOWN THE MANNER IN WHICH INCOME-TAX PAYABLE IS TO BE COMPUTED. SUB-SEC TION (2) PROVIDES FOR COMPUTATION OF 'BOOK PROFIT'. SUB-SECTION (5) SPECI FIES THAT SAVE AS OTHERWISE PROVIDED IN THIS SECTION, ALL OTHER PROVISIONS OF T HIS ACT SHALL APPLY TO EVERY ASSESSEE, BEING A COMPANY MENTIONED IN THAT SECTION . IN OTHER WORDS, EXCEPT FOR SUBSTITUTION OF TAX PAYABLE UNDER THE PROVISION AND THE MANNER OF COMPUTATION OF BOOK PROFITS, ALL THE PROVISIONS OF THE TAX INCLUDI NG THE PROVISION RELATING TO CHARGE, DEFINITIONS, RECOVERIES, PAYMENT, ASSESSMEN T, ETC., WOULD APPLY IN RESPECT OF THE PROVISIONS OF THIS SECTION. 3. THE SCHEME OF THE INCOME-TAX ACT ALSO NEEDS TO B E REFERRED TO. SECTION 4 OF THE INCOME-TAX ACT CHARGES TO TAX THE INCOME AT ANY RATE OR RATES WHICH MAY BE PRESCRIBED BY THE FINANCE ACT EVERY YEAR. SECTION 2 07 DEALS WITH THE LIABILITY FOR PAYMENT OF ADVANCE TAX, AND SECTION 209 DEALS WITH ITS COMPUTATION BASED ON THE RATES IN FORCE FOR THE FINANCIAL YEAR, AS ARE C ONTAINED IN THE FINANCE ACT. THE RATES OF TAX ARE PROVIDED IN THE FINANCE ACT. THE F IRST PROVISO TO SECTION 2(8) OF THE FINANCE ACT, 2001, READS AS UNDER: 'PROVIDED THAT IN CASES TO WHICH THE PROVISIONS OF CHAPTER XII OR CHAPTER XII-A OR SECTION 115JB OR SUB-SECTION (1A) OF SECTION 161 OR SECTION 164A OR SECTION 167B OF THE INCOME-TAX ACT APPLY, 'ADVANCE TAX' SHALL BE COMPUTED WITH REFERENCE TO THE RATES IMPOSED BY THIS SUB-SECTION OR THE RATES AS SPECIFIED IN THAT CHAPTER OR SECTION, AS THE CASE MAY BE:' THE THIRD PROVISO TO SECTION 2(8) OF THE FINANCE AC T, 2001, FURTHER PROVIDES THAT THE TAX PAYABLE BY WAY OF ADVANCE TAX IN RESPECT OF INCOME CHARGEABLE UNDER SECTION 115JB, SHALL BE INCREASED BY A SURCHARGE OF 2%. THE FINANCE ACT, 2000, ALSO CONTAINED SIMILAR PROVISIONS. 4. IT IS, THUS, ABUNDANTLY CLEAR THAT ALL COMPANIES ARE LIABLE FOR PAYMENT OF ADVANCE TAX HAVING REGARD TO THE PROVISIONS CONTAIN ED IN NEW SECTION 115JB. CONSEQUENTLY, THE PROVISIONS OF SECTIONS 234B AND 2 34C FOR INTEREST ON DEFAULTS IN PAYMENT OF ADVANCE TAX AND DEFERMENT OF ADVANCE TAX WOULD ALSO BE APPLICABLE WHERE FACTS OF THE CASE WARRANT. 5. THIS MAY BE BROUGHT TO THE NOTICE OF ALL OFFICER S WORKING IN YOUR REGION. ITA N O.2825 /DEL./2010 9 (SD.) SUPRIYODE , UNDER SECRETARY TO THE GOVERNMENT OF INDIA. [F. NO. 153/216/2001-TPL] 6.3 AS IS APPARENT FROM THE AFORESAID PROVISION S OF SEC. 115JB(5) OF THE ACT, THE LEGISLATURE WHILE INTRODUCING THESE PROVISIONS INTENDED THAT PROVISIONS OF ADVANCE TAX ARE APPLICABLE WHILE DETERMINING THE LI ABILITY IN TERMS OF PROVISIONS OF SEC 115JB OF THE ACT. THE AFORESAID CIRCULAR NO. 13 IS SUFFICIENT REFLECTION OF THE INTENT BEHIND PROVISIONS OF SEC. 115JB(5) OF THE AC T. WE ARE OF THE OPINION THAT IN VIEW OF THE DECISION OF THE HONBLE SUPREME COURT I N THE CASE OF CIT V. ANJUM M. H. GHASWALA AND OTHERS. 252 ITR 1 (SC), AFFIRMED BY HON'BLE APEX COURT IN THE CASE OF CIT V. HINDUSTAN BULK CARRIERS [2003] 259 ITR 449 (SC) AND IN THE CASE OF CIT V. SANT RAM MANGAT RAM JEWELLERS [2003] 264 ITR 564 (SC), LEVY OF INTEREST UNDER SECTION 234C IS MANDATORY EVEN WHIL E DETERMINING BOOK PROFITS U/S 115JB OF THE ACT AND ESPECIALLY IN VIEW OF SPE CIFIC PROVISIONS OF SECTION 115JB(5) OF THE ACT .IN VIEW OF THE SPECIFIC PROVI SIONS U/S 115JB(5) OF THE ACT AND THE AFORESAID CIRCULAR AND THE DECISIONS, THE A O DID NOT COMMIT ANY ERROR, IN OUR VIEW, WHILE LEVYING INTEREST U/S 234C OF THE AC T AT THE TIME OF PROCESSING OF RETURN U/S 143(1) OF THE ACT. 7. IN THE INSTANT CASE, LIABILITY FOR PAYMENT OF ADVANCE TAX HAS NOWHERE BEEN DENIED. SINCE THE AO LEVIED INTEREST U/S 234C OF TH E ACT ON ACCOUNT OF DEFERMENT OF PAYMENT OF ADVANCE TAX, AT THE TIME OF PROCESSIN G OF RETURN ON 25.2.2009, THE ASSESSEE COMPANY MOVED AN APPLICATION U/S 154 OF TH E ACT VIDE LETTER DATED 23.3.2009 WHICH READS AS UNDER: YOU HAVE LEVIED AN AMOUNT OF RS.22,428,119 U/S 234C IN RESPECT OF ASSESSMENT U/S 143(1) OF THE ACT. IN THIS CONNECTIO N, WE WOULD LIKE TO REFER TO THE JUDGMENT OF THE APEX COURT IN THE CASE OF COMMISSIO NER OF INCOME TAX VS. KWALITY BISCUITS LTD.(2006) 284 ITR 0434,WHEREIN IT WAS DECIDED THAT WHEN THE ASSESSEES INCOME IS ASSESSED UNDER MAT, INTEREST U /S 234C IS NOT LEVIABLE. FOR YOUR READY REFERENCE, WE ARE ENCLOSING A COPY OF OR DER OF THE APEX COURT WHICH IS SELF EXPLANATORY. SINCE AS PER ORDER OF THE SUPR EME COURT, INTEREST U/S 234C IS ITA N O.2825 /DEL./2010 10 NOT LEVIABLE, WE WOULD REQUEST YOU TO AMEND THE SAI D ORDER AND REFUND US AN AMOUNT OF RS.22,428,119/- WRONGLY LEVIED BY YOU. 7.1 THE AO REJECTED THE AFORESAID APPLICATION ON THE GROUND THAT ISSUE WAS AMENABLE TO DIFFERENT INTERPRETATIONS, WHICH CANNOT BE SUBJECT MATTER OF RECTIFICATION U/S 154 OF THE ACT AND REFERRED TO DE CISION IN GEETHA RAMAKRISHNA MILLS (P) LTD.,288 ITR 489(MAD.). ON APPEAL, THE LD . CIT(A) ALLOWED THE CLAIM OF THE ASSESSEE ON THE GROUND THAT JURISDICTION AS AVA ILABLE U/S 143(1) TO THE AO IS ONLY CONFINED TO THE PRIMA FACIE ADJUSTMENT AND NOT ON THE ISSUES WHICH ARE DEBATABLE ONES. ACCORDING TO THE LD. CIT(A), THE IS SUE IN THE INSTANT CASE WAS DEBATABLE IN VIEW OF JUDGMENTS IN ASSAM BENGAL CAR RIERS LTD. VS. CIT,239 ITR 862(GAU);ITARSI OIL & FLOURS PVT. LTD.VS. CIT,250 I TR 686(MP);CIT VS. HOLIDAY TRAVEL PVT. LTD. ,263 ITR 307(MAD.);CIT VS. KOTAK M AHINDRA FINANCE LTD.,265 ITR 199(BOM.)&CIT VS. UPPER INDIA STEELS MFG.& ENGG . CO. LTD.,279 ITR 123(P&H); JINDAL THERMAL POWER CO. LTD. VS. DCIT,28 6 ITR 182(KAR) AND CIT VS. GEETHA RAMAKRISHNA MILLS P LTD.,288 ITR 489(MAD .) ON THE ONE HAND IN FAVOUR OF THE REVENUE AND THE DECISIONS IN KWALITY BISCUITS LTD.(SUPRA) IN THE CONTEXT OF PROVISIONS OF SEC. 115J OF THE ACT AND S NOWCEM INDIA LTD. VS. DCIT,313 ITR 170(BOM.) IN THE CONTEXT OF PROVISION S OF SEC. 115JA OF THE ACT, ON THE OTHER. AS IS APPARENT FROM THE IMPUGNED ORDE R, THE LD. CIT(A) WHILE REFERRING TO JUDGMENTS RENDERED IN THE CONTEXT OF LEVY OF INTEREST U/S 234& 234C OF THE ACT ON THE TAX DETERMINED ON THE BOOK PROFIT S IN TERMS OF PROVISIONS OF SEC. 115J & 115JA OF THE ACT ,HAS CONCLUDED THAT THE ISS UE IS DEBATABLE AND COMPLETELY IGNORED THE RELEVANT PROVISIONS OF SEC. 115JB(5) OF THE ACT AND THE AFORESAID CIRCULAR . 8. HERE WE MAY ANALYSE AS TO HOW THE AO OR THE LD. CIT(A) TREATED THE ISSUE OF LEVY OF INTEREST U/S 234C IN THE CONTEXT OF PROVISIONS OF SEC. 115JB OF THE ACT AS DEBATABLE. AT THE TIME OF PROCESSING THE RETURN ON 25.2.2009 AND AT THE TIME OF PASSING OF IMPUGNED ORDER BY THE LD. CIT(A), T HE DECISIONS IN ASSAM BENGAL CARRIERS LTD.(SUPRA);ITARSI OIL & FLOURS PVT. LTD.( SUPRA); HOLIDAY TRAVEL PVT. LTD.(SUPRA.); KOTAK MAHINDRA FINANCE LTD.,(SUPRA); AND GEETHA RAMAKRISHNA ITA N O.2825 /DEL./2010 11 MILLS P LTD. ,RENDERED IN THE CONTEXT OF LEVY OF IN TEREST U/S 234B &/OR 234C OF THE ACT ON THE TAX CALCULATED ON THE BOOK PROFITS U/S 1 15J OF THE ACT, WERE IN FAVOUR OF THE REVENUE WHILE DECISION OF THE HONBLE APEX COURT IN KWALITY BISCUITS LTD.(SUPRA) WAS IN FAVOUR OF THE ASSESSEE. THESE DECISIONS RENDERED IN THE CONTEXT OF PROVISIONS OF SEC. 115J OF THE ACT ,CANN OT ,IN OUR VIEW, BE APPLIED IN THE CONTEXT OF PROVISIONS OF SEC. 115JB OF THE ACT OR FOR HOLDING THE ISSUE OF LEVY OF INTEREST U/S 234C ON TAX ON BOOK PROFITS U/S 11 5JB OF THE ACT, AS DEBATABLE.. AS REGARDS LEVY OF INTEREST U/S 234B AND 234C IN TH E CONTEXT OF PROVISIONS OF SEC. 115JA OF THE ACT, THE DECISION IN UPPER INDIA STEEL S MFG.& ENGG. CO. LTD. WAS IN FAVOUR OF REVENUE WHILE DECISION IN SNOWCEM INDIA L TD.(SUPRA) WAS IN FAVOUR OF THE ASSESSEE. IN SNOWCEM INDIA LTD.(SUPRA), HONBLE BOMBAY HIGH COURT MERELY FOLLOWED THE DECISION OF HONBLE APEX COURT IN K WALITY BISCUITS LTD.(SUPRA) RENDERED IN THE CONTEXT OF PROVISIONS OF SEC. 115J OF THE ACT, WITHOUT EVEN EXAMINING THE APPLICABILITY OF PROVISIONS OF SEC. 1 15JA(4) OF THE ACT. HOWEVER, IN THE CONTEXT OF PROVISIONS OF 115JB OF THE ACT, THE ONLY DECISION AVAILABLE WAS OF HONBLE KARNATAKA HIGH COURT IN JINDAL THERMAL POWE R CO. LTD. (SUPRA), WHERE IN AFTER CONSIDERING THEIR OWN DECISION IN THE CASE OF KWALITY BISCUITS LTD., HON'BLE HIGH COURT HELD IN THE CONTEXT OF LEVY OF INTEREST UNDER SECTIONS 234B AND 234C OF THE ACT ON TAX CALCULATED ON BOOK PROFITS IN TE RMS OF PROVISIONS OF SECTION 115JB OF THE ACT THAT:- 'THE CENTRAL BOARD OF DIRECT TAXES CIRCULAR NO. 13/ 2001 WAS ISSUED ON 18-11- 2001, REGARDING THE LIABILITY FOR PAYMENT OF ADVANC E TAX UNDER THE NEW MAT PROVISIONS OF SECTION 115JB OF THE ACT AND IT IS AB UNDANTLY MADE CLEAR IN THE SAID CIRCULAR THAT THE NEW PROVISION OF THE SECTION 115J B AS INTRODUCED BY THE FINANCE ACT, 2000 IS A SELF-CONTAINED CODE. SUB-SECTION (1) LAYS DOWN THE MANNER IN WHICH INCOME-TAX PAYABLE IS TO BE COMPUTED. SUB-SEC TION (2) PROVIDES FOR COMPUTATION OF 'BOOK PROFIT'. SUB-SECTION (5) SPECI FIES THAT SAVE AS OTHERWISE PROVIDED IN THIS SECTION, ALL OTHER PROVISIONS OF T HIS ACT SHALL APPLY TO EVERY ASSESSEE, BEING A COMPANY MENTIONED IN THAT SECTION . IN OTHER WORDS, EXCEPT FOR SUBSTITUTION OF TAX PAYABLE UNDER THE PROVISION AND THE MANNER OF COMPUTATION OF BOOK PROFITS, ALL THE PROVISIONS OF THE TAX INCLUDI NG THE PROVISION RELATING TO CHARGE, DEFINITIONS, RECOVERIES, PAYMENT, ASSESSMEN T, ETC., WOULD APPLY IN RESPECT OF THE PROVISIONS OF THIS SECTION AND IN VI EW OF THE SCHEME OF THE INCOME- TAX ACT. SECTION 4 OF THE ACT CHARGES TO TAX THE IN COME AT ANY RATE OR RATES WHICH MAY BE PRESCRIBED BY THE FINANCE ACT EVERY YEAR AND SECTION 207 DEALS WITH ITA N O.2825 /DEL./2010 12 LIABILITY FOR PAYMENT OF ADVANCE TAX AND SECTION 20 9 DEALS WITH ITS COMPUTATION BASED ON THE RATES IN FORCE FOR THE FINANCIAL YEAR, AS ARE CONTAINED IN THE FINANCE ACT AND THE FIRST PROVISO TO SECTION 2(8) OF THE FI NANCE ACT, 2001, PROVIDES THAT THE TAX PAYABLE BY WAY OF ADVANCE TAX IN RESPECT OF INCOME CHARGEABLE UNDER SECTION 115JB AS INTRODUCED BY THE FINANCE ACT, 200 0, AND CONSEQUENTLY THE PROVISIONS OF SECTIONS 234B AND 234C FOR INTEREST O N DEFAULTS IN PAYMENT OF ADVANCE TAX AND DEFERMENT OF ADVANCE TAX WOULD ALSO BE APPLICABLE WHERE THE FACTS O F THE CASE WARRANT.' 8.1. THUS AT THE TIME OF PROCESSING OF RETURN OR EVEN AT THE TIME OF PASSING OF IMPUGNED ORDER, IN OUR OPINION, THERE WAS NO DISPUT E IN RESPECT OF LEVY OF INTEREST U/S 234C OF THE ACT ON THE TAX DETERMINE D ON BOOK PROFITS IN TERMS OF PROVISIONS OF SEC. 115JB OF THE ACT, ESPECIALLY IN VIEW OF AFORESAID DECISION OF THE HONBLE KARNATAKA HIGH COURT IN JINDAL THERMAL POWER CO. LTD. (SUPRA), AND THE FOLLOWING OBSERVATIONS OF THE HONBLE MADRAS H IGH COURT IN GEETHA RAMAKRISHNA MILLS P LTD.(SUPRA): . THAT APART, IN VIEW OF THE INTRODUCTION OF SECTI ONS 115JA AND 115JB OF THE ACT WITH EFFECT FROM APRIL 1, 1997 BY THE FINANCE (NO.2 ) ACT, 1996, THE QUESTION WHETHER A COMPANY WHICH IS LIABLE TO PAY TAX UNDER EITHER OF THE PROVISIONS SHOULD PAY ADVANCE TAX DOES NOT ASSUME MUCH IMPORTA NCE AS SPECIFIC PROVISIONS HAVE BEEN MADE IN THE SECTION PROVIDING THAT ALL PROVISIONS OF THE ACT SHALL APPLY TO THE ASSESSEE BEING A COMPANY MENTION ED IN THE SAID SECTION AND THEREFORE, SECTION 115J OF THE ACT IS NO MORE AVAIL ABLE FOR THE ASSESSEE FOR DELAYING THE PAYMENT OF ADVANCE TAX IN VIEW OF THE INSERTION OF SECTIONS 115JA AND 115JB OF THE ACT. 8.2 THE LD. CIT(A) ,IN OUR OPINION, HAS UNNECES SARILY AND UNJUSTIFIABLY MADE THE ISSUE DEBATABLE WHILE DRAGGING IN THE DECISION S RENDERED IN THE CONTEXT OF PROVISIONS OF SEC. 115J OF THE ACT, IGNORING THE SP ECIFIC PROVISIONS OF SEC. 115JB(5) OF THE ACT NOR POINTED OUT ANY CONTRARY D ECISION IN THE CONTEXT OF RELEVANT PROVISIONS OF SEC. 115JB OF THE ACT. 9. EVEN OTHERWISE, RECENTLY HONBLE APEX COUR T IN ROLTA INDIA LTD.(SUPRA) VIDE THEIR DECISION DATED 7.1.2011 UPHELD THE LEVY OF INTEREST U/S 234B ON THE TAX CALCULATED ON BOOK PROFITS U/S 115JA OF THE ACT . WHILE REFERRING TO THE JUDGMENTS IN KWALITY BISCUITS LTD.(SUPRA) AND JINDA L THERMAL POWER COMPANY LTD. (SUPRA),HONBLE APEX COURT OBSERVED THAT CIRCU LAR NO. 13/2001 DATED ITA N O.2825 /DEL./2010 13 9.11.2001 ISSUED BY CBDT REPORTED IN 252 ITR(ST.)50 CLARIFIED THAT SECTION 115JB IS A SELF-CONTAINED CODE AND THUS, ALL COMPA NIES WERE LIABLE FOR PAYMENT OF ADVANCE TAX U/S 115JB AND CONSEQUENTLY PROVISION S OF SECTIONS 234B AND 234C IMPOSING INTEREST ON DEFAULT IN PAYMENT OF ADV ANCE TAX WERE ALSO APPLICABLE. 10. THE LD. AR ARGUED BEFORE US THAT DEBATE CA NNOT BE OBLITERATED WITH THE SUBSEQUENT DECISION OF THE HONBLE APEX COURT. BUT THE DEBATE WAS IN RESPECT OF ISSUE OF LEVY OF INTEREST ON TAX CALCULATED ON BO OK PROFITS U/S 115J OF THE ACT AND NOT IN THE CONTEXT OF PROVISIONS OF SEC. 115JB OF T HE ACT. HONBLE APEX COURT WHILE REFERRING TO THE AFORESAID CIRCULAR OBSERVED THAT SEC. 115JB IS SELF CONTAINED CODE AND THAT IS WHY UPHELD LEVY OF INTER EST ON TAX ON BOOK PROFITS DETERMINED IN TERMS OF PROVISIONS OF SEC. 115JB OF THE ACT. 11. MOREOVER, RECENTLY HONBLE PUNJAB AND HARYAN A HIGH COURT IN THEIR DECISIONS IN CIT VS. STEEL STEIPS LEASING LTD.,338 ITR 455,CIT VS. RANA SUGARS LTD.,2011-TIOL-573-HC-P&H-IT AND AMTEXK AUTO LTD. V S. CIT,338 ITR 550,FOLLOWING THE VIEW TAKEN BY THE HONBLE APEX CO URT IN ROLTA INDIA LTD.(SUPRA) UPHELD THE LEVY OF INTEREST U/S 234B OF THE AND 234 C OF THE ACT ON TAX CALCULATED ON BOOK PROFITS DETERMINED U/S 115JB OF THE ACT E VEN AT THE TIME OF PROCESSING OF RETURN U/S 143(1) OF THE ACT. 12. HONBLE KARNATAKA HIGH COURT IN THEIR DECISI ON DATED 30.6.2010 IN CIT VS. SANKALA POLYMERS P LTD.,46 DTR(KAR)385 UPHELD THE LEVY OF INTEREST U/S 234B & 234C OF THE ACT ON TAX CALCULATED ON BOOK PROFITS U /S 115JB OF THE ACT IN PROCEEDINGS U/S 154 OF THE ACT IN THE FOLLOWING TER MS: 8. AT THE OUTSET IT IS NECESSARY TO CLARIFY T HAT THE CASE OF THE ASSESSEE FALLS UNDER S. 115JB AND NOT UNDER S. 115JA OF THE ACT AS SUBMITTED BY THE ASSESSEE'S COUNSEL. HOWEVER, IN BOTH S. 115JA AS WELL AS IN S. 115JB OF THE ACT A SAVING CLAUSE HAS BEEN INCORPORATED WHICH IS IN THE FOLLOW ING WORDS : 'SAVE AS OTHERWISE PROVIDED IN THIS SECTION,ALL OTH ER PROVISIONS OF THIS ACT SHALL APPLY TO EVERY ASSESSEE, BEING A COMPANY, MEN TIONED IN THIS SECTION.' ITA N O.2825 /DEL./2010 14 9 . THE SAID SAVING CLAUSE IS IN SUB-S. (4) OF S. 115JA AND SUB-S. (5) OF S. 115JB OF THE ACT. IT IS RELEVANT TO NOTE THATTHE DECISION OF THIS COURT IN THE CASE OF KWALITY BISCUITS (SUPRA) WAS RENDERED UNDER S. 115J WHEREIN SUCH A SAVING CLAUSE IS NOT INCORPORATED. THIS COURT, IN THE CASE OF KWALITY BISCUITS LTD. (SUPRA), RAISED ONE OF THE SUBSTANTIAL QUESTIONS OF LAW AS F OLLOWS : 'HAVING REGARD TO THE SCHEME OF S. 115J WHETHER IN AN ASSESSMENT YEAR WHERE THE ASSESSEE'S INCOME IS COMPUTED BY INVOKING THE PROVISIONS OF S. 115J INTEREST UNDER SS. 234B AND 234C ARE LEVIABLE ?' WHILE ANSWERING THE SAID QUESTION, THIS COURT HELD THAT SINCE THE ENTIRE EXERCISE OF COMPUTING THE INCOME OR THAT OF BOOK PROFIT COUL D BE ONLY AT THE END OF FINANCIAL YEAR, THE PROVISIONS OF SS. 207, 208, 209 AND 210 CANNOT BE MADE APPLICABLE, UNLESS AND UNTIL ACCOUNTS ARE AUDITED A ND THE BALANCE SHEET IS PREPARED, BECAUSE TILL THEN EVEN THE ASSESSEE MAY N OT KNOW WHETHER THE PROVISIONS OF S. 115J WOULD BE APPLICABLE OR NOT. T HE LIABILITY WOULD BE AFTER THE BOOK PROFITS ARE DETERMINED IN ACCORDANCE WITH THE COMPANIES ACT. THE WORDS 'FOR THE PURPOSES OF THIS SECTION' IN THE EXPLANATI ON TO S. 115J(1A) ARE RELEVANT AND CANNOT BE CONSTRUED TO EXTEND BEYOND THE COMPUT ATION OF LIABILITY OF TAX. HENCE, INTEREST CANNOT BE CHARGED UNDER SS. 234B AN D 234C. THE SAID REASONING WAS BASED ON THE FACT THAT IT IS ONLY IN RESPECT OF THE DEEMED INCOME FOR WHICH THE PROVISION OF S. 115J HAD BEEN INCORPORATED AND WHEN A DEEMED FICTION IS BROUGHT UNDER THE STATUTE, IT SHO ULD BE CARRIED TO THE LOGICAL CONCLUSION BUT WITHOUT CREATING FURTHER DEEMING FIC TION SO AS TO INCLUDE OTHER PROVISIONS OF THE ACT WHICH ARE NOT SPECIFICALLY MA DE APPLICABLE. HOWEVER, WHAT IS BEING CONSIDERED IN THIS CASE IS T HAT THE ASSESSEE'S CASE FALLS UNDER S. 115JB. UNDER S. 115JB OF THE ACT, SUB-S. ( 5) CLEARLY STATES THAT OTHER PROVISIONS OF THE ACT SHALL APPLY TO EVERY ASSESSEE BEING A COMPANY, SAVE AS OTHERWISE PROVIDED IN THE SAID SECTION. IN THIS CON TEXT, CIRCULAR NO. 13 OF 2001 HAS ALSO BEEN ISSUED BY THE CBDT AS PER WHICH COMPA NIES COVERED BY THE PROVISIONS OF S. 115JB ARE LIABLE TO PAY ADVANCE TA X AND CONSEQUENTLY, SS. 234B AND 234C OF THE ACT ARE APPLICABLE. THE CIT(A) MADE A REFERENCE TO THE CIRCULAR, BUT ERRONEOUSLY NOTED THAT THE CASE OF THE ASSESSEE WAS UNDER S. 115JA OF THE ACT AND BY PLACING RELIANCE ON THE SAID CIRCULAR, D ISMISSED THE APPEAL OF THE ASSESSEE. LEARNED COUNSEL FOR THE RESPONDENT-ASSESS EE HAS CATEGORICALLY STATED THAT THE CASE OF THE ASSESSEE FALLS UNDER S. 115JB THEN SUB-S. (5) OF THE SAID SECTION IS APPLICABLE AND THEREFORE, THE PROVISIONS REGARDING INTEREST ARE APPLICABLE TO THE ASSESSEE. IN THE CASE OF KWALITY BISCUITS (SUPRA), THIS COURT WHILE CONSIDERING THE SAID ASPECT UNDER S. 115J OF THE ACT, NOTED THAT IT IS ONLY A DEEMED INCOME WHICH IS TAKEN INTO CONSIDERATION UND ER S. 115J AND IN THE ABSENCE OF ANY SPECIFIC PROVISIONS BEING MADE APPLI CABLE THE SAME COULD NOT BE APPLIED BY CREATING A FURTHER DEEMING FICTION AND I T IN THAT CONTEXT HELD THAT INTEREST UNDER SS. 234B AND 234C WAS NOT LEVIABLE W HEN THE CASE OF ASSESSEE ITA N O.2825 /DEL./2010 15 FALLS UNDER S. 115J.HOWEVER, UNDER S. 115JA AS WELL AS UNDER S. 115JB THERE ARE SPECIFIC PROVISIONS MAKING APPLICABLE OTHER PROVISI ONS OF THE ACT TO AN ASSESSEE BEING A COMPANY COMING UNDER THE RELEVANT SECTIONS. IN VIEW OF THE SPECIFIC PROVISION, PARTICULARLY UNDER S. 115JB UNDER WHICH THE CASE OF THE PRESENT ASSESSEE FALLS, WE HOLD THAT THE RATIO OF KWALITY BISCUITS (SUPRA) CANNOT APPLY TO THE CASE OF THE ASSESSEE HEREIN WHICH IS COVERED UN DER S. 115JB OF THE ACT, WHEREIN SUB-S. (5) MAKES ALL OTHER PROVISIONS OF TH E ACT APPLICABLE. WHEN A SPECIFIC PROVISION OF THE ACT HAS NOT BEEN APPLIED WHILE PASSING AN ORDER OF ASSESSMENT, WHICH IS A MISTAKE APPARENT FROM THE RE CORD, THE IT AUTHORITY HAS THE POWER TO RECTIFY THE SAID MISTAKE BY INVOKING S . 154 OF THE ACT. THEREFORE, WE ARE OF THE VIEW THAT THE ORDER PASSED BY THE TRIBUN AL CANNOT BE SUSTAINED AND IS LIABLE TO BE SET ASIDE WHILE THE ORDERS OF THE CIT( A) AND THE AO HAVE TO BE UPHELD SUBJECT TO THE CLARIFICATION THAT THE CASE O F THE ASSESSEE FALLS UNDER S. 115JB OF THE ACT AND NOT UNDER S. 115JA. FOR THE AFORESAID REASONS, THE SUBSTANTIAL QUESTION S OF LAW HAVE TO BE ANSWERED IN FAVOUR OF THE REVENUE BY ALLOWING THIS APPEAL. A CCORDINGLY, THE ORDER PASSED BY THE TRIBUNAL, BANGALORE, BENCH-A, DT. 7TH JUNE, 2005 BEARING ITA NO. 383/BANG/2005 VIDE ANNEX. A IS SET ASIDE AND THE OR DER DT. 10TH JAN., 2005 PASSED IN ITA NO. 084/C-12(1)/CIT(A)-III/2004-05 BY THE CIT(A)-III, BANGALORE, VIDE ANNEX. B AND THE ORDER PASSED BY THE AO DT. 1S T DEC., 2004 FOR THE ASST. YR. 200102, VIDE ANNEX. C ARE ALL HEREBY UPHELD, SUBJEC T TO THE CLARIFICATION THAT THE CASE OF THE ASSESSEE FALLS UNDER S. 115JB OF THE AC T. THE MATTER IS REMITTED BACK TO THE AO TO RECOMPUTE THE INTEREST BY CONSIDERING THE CASE OF THE ASSESSEE UNDER S. 115JB OF THE ACT AND PASS AN ORDER IN ACCO RDANCE WITH LAW 13. IN THE INSTANT CASE BEFORE US, THE AO APPLIE D SPECIFIC PROVISIONS OF SEC. 115JB(5) OF THE ACT AND AS POINTED OUT BY THE HONB LE KARNATAKA HIGH COURT IN THEIR AFORESAID DECISION IN VIEW OF THE SPECIFIC PR OVISIONS OF S. 115JB(5) ,THE RATIO OF KWALITY BISCUITS (SUPRA) CANNOT APPLY TO THE CA SE OF THE ASSESSEE HEREIN WHICH IS COVERED UNDER S. 115JB OF THE ACT. FOR THI S REASON ALONE, THE AO WAS CORRECT IN REJECTING THE APPLICATION OF THE ASSESSE E U/S 154 OF THE ACT, SEEKING RECTIFICATION OF THE ORDER IN THE LIGHT OF DECISIO N OF THE HONBLE APEX COURT IN KWALITY BISCUITS LTD.(SUPRA) RENDERED IN THE CONTEX T OF PROVISIONS OF SEC. 115J OF THE ACT. 14. NOW ADVERTING TO THE DECISION RELIED UPON BY THE LD. AR IN SMT. PREMLATA JALANI(SUPRA). IN THE SAID DECISION, THERE WAS NO S UCH ISSUE OF LEVY OF INTEREST U/S 234C OF THE ACT ON TAX ON BOOK PROFITS DETERMINED U /S 115JB OF THE ACT. IN THE SAID CASE, THE RETURN OF INCOME WAS FILED BY THE AS SESSEE ON OCTOBER 30, 2000, ITA N O.2825 /DEL./2010 16 FOR THE ASSESSMENT YEAR 2000-2001. AN INTIMATION UN DER SECTION 143(1) WAS SENT BY THE ASSESSING OFFICER ON NOVEMBER 9, 2000, MAKIN G VARIATION IN THE CALCULATION, COMPUTING THE INTEREST AS MADE BY THE ASSESSEE UNDER SECTIONS 234B AND 234C OF THE ACT. AGGRIEVED BY THE ADDITION S MADE TO THE ADMITTED LIABILITY TO PAY INTEREST BY THE ASSESSEE WHILE EXE RCISING JURISDICTION UNDER SECTION 143(1), THE ASSESSEE PREFERRED A RECTIFICATION APPL ICATION BEFORE THE ASSESSING OFFICER WHICH WAS DISMISSED BY HIM ON JANUARY 16, 2 001. HE HELD THAT THERE IS NO MISTAKE APPARENT ON THE FACE OF THE RECORD AND T HE ASSESSING OFFICER HAD JURISDICTION TO MAKE SUCH ADJUSTMENT IN THE COMPUTA TION OF INTEREST IN EXERCISE OF HIS JURISDICTION UNDER SECTION 143(1)(A) OF THE ACT . THE APPEAL FILED BY THE ASSESSEE BEFORE THE CIT(APPEALS) WAS DISMISSED ON N OVEMBER 2, 2001. SINCE THE PROVISO TO SECTION 234C EXCLUDED THE INCLUSION OF CAPITAL GAINS IN THE COMPUTATION OF TOTAL INCOME FOR THE PURPOSE OF COMP UTING THE ADVANCE TAX TO BE PAID AT ANY TIME BEFORE THE CAPITAL GAINS ARISES, T HE ASSESSEE CONTENDED THAT THERE WAS NO LIABILITY TO PAY ANY AMOUNT OF ADVANCE TAX, PRIOR TO THE DATE CAPITAL GAINS ACCRUES OR ARISES AND THEREFORE, NO INTEREST WAS CHARGEABLE IN RESPECT OF SHORTFALL IN PAYMENT OF ADVANCE TAX RELATABLE TO CA PITAL GAINS, PRIOR TO THE DATE CAPITAL GAINS ACCRUED OR AROSE AND ADVANCE TAX IN R ESPECT THEREOF BECAME PAYABLE. IN THE SAID DECISION, THE CAPITAL GAIN ARO SE AFTER MARCH 15, 2000, WHEN THE DATE OF PAYMENT OF THE LAST INSTALMENT OF ADVAN CE TAX HAD ALREADY EXPIRED. THE ASSESSEE COULD NOT HAVE PAID ADVANCE TAX ON SUC H CAPITAL GAINS ARISING OUT AFTER MARCH 15, 2000. THE ASSESSEE HAS NOT PAID THE TAX PAYABLE IN RESPECT OF SUCH CAPITAL GAINS BY MARCH 31, 2000, BUT HAS PAID THE TAX IN RESPECT THEREOF IN APRIL, 2000.HE CALCULATED INTEREST PAYABLE IN RESPE CT OF SUCH LATE PAYMENT OF TAX ON SUCH CAPITAL GAIN FOR ONE MONTH IN HIS RETURN AN D DEPOSITED THE SAME ALONG WITH THE RETURN. IN THE LIGHT OF THESE FACTS, HONB LE HIGH COURT UPHELD THE FINDINGS OF THE TRIBUNAL THAT THE INTEREST SHALL BE PAYABLE ONLY WITH EFFECT FROM THE DATE THE LIABILITY TO PAY ADVANCE TAX IN RESPECT THEREOF HAS BEEN INCURRED. THERE CANNOT BE ANY INTEREST PRIOR TO THE DATE IN RESPECT OF SUCH L IABILITY WHEN THERE WAS NO LIABILITY TO PAY ADVANCE TAX UNDER ANY PROVISIONS OF THE ACT. HONBLE HIGH COURT ALSO OBSERVED THAT ASSESSEE'S PLEA FOR RECTIFICATION IN THAT CASE WAS NOT THAT THE ITA N O.2825 /DEL./2010 17 LIABILITY TO PAY INTEREST UNDER SECTION 234C IS DIS PUTABLE, BUT HIS CONTENTION WAS THAT UNDER SECTION 143(1), THE ASSESSING OFFICER HA D NO AUTHORITY TO MAKE SUCH ADJUSTMENT TO INTEREST STATUTORY PROVISION AND ON W HICH POSSIBLY TWO OPINIONS CAN EXIST. THIS ISSUE NOTWITHSTANDING NOTICED BY THE TR IBUNAL, HAD NOT BEEN DECIDED BY IT AT ALL, HONBLE HIGH COURT CONCLUDED. BUT SU CH ARE THE FACTS AND CIRCUMSTANCES IN THE INSTANT CASE NOR THE LD. AR EX PLAINED BEFORE US AS TO HOW THIS DECISION IS OF ANY HELP TO THE ASSESSEE, ESPEC IALLY WHEN THE PROVISIONS OF SEC. 115JB OF THE ACT ARE SELF CONTAINED IN VIEW OF SPECIFIC CLAUSE (5) THEREOF AS ALSO DECISIONS OF THE HONBLE KARNATAKA HIGH COURT IN JINDAL THERMAL POWER CO. LTD. (SUPRA) AND OBSERVATIONS OF THE HONBLE MADRA S HIGH COURT IN GEETHA RAMAKRISHNA MILLS P LTD.(SUPRA) AS AFORESAID CLEA RLY STATE THAT INTEREST U/S 234C OF THE ACT IS LEVIABLE IN VIEW OF DEFERMENT OF LIAB ILITY OF ADVANCE TAX PAID BY THE ASSESSEE. EVEN OTHERWISE, THE LEVY OF INTEREST WAS NOT IN THE CONTEXT OF TAX ON BOOK PROFITS DETERMINED U/S 115JB OF THE ACT IN T HE CITED DECISION, AS ALREADY OBSERVED BY US. THUS, RELIANCE ON THIS DECISION IS TOTALLY MISPLACED. 14.1 THE DECISION IN SURYA ROSHINI LTD. (SUPRA) ,FOLLOWING THE AFORESAID DECISION OF RAJASTHAN HIGH COURT, WAS RENDERED IN T HE CONTEXT OF LEVY OF INTEREST U/S 234C OF THE ACT WHILE PROCESSING THE RETURN. TH E ITAT HELD THAT SUCH INTEREST ON TAX DETERMINED ON BOOK PROFITS U/S 115JA OF THE ACT CANNOT BE LEVIED .IT IS NOTICED ON PERUSAL OF THE SAID DECISION THAT THE I TAT COMPLETELY IGNORED THE SPECIFIC PROVISIONS OF SEC. 115JA(4) OF THE ACT AS ALSO THE DECISIONS IN ANJUM M. H. GHASWALA AND OTHERS.(SUPRA); HINDUSTAN BULK CARR IERS (SUPRA); AND SANT RAM MANGAT RAM JEWELLERS(SUPRA),HOLDING THAT LEVY O F SUCH INTEREST IS MANDATORY. IN THE CITED CASE, THE ITAT RELIED UPON DECISION OF HONBLE KARNATAKA HIGH COURT IN THE CASE KWALITY BISCUITS L TD.(SUPRA) WHICH WAS RENDERED IN THE CONTEXT OF PROVISIONS OF SEC. 115J OF THE ACT AND CONCLUDED THAT THE AO CANNOT ENTER IN TO INTERPRETATIVE EXERCISE W HILE PROCESSING THE RETURN. WITH RESPECT ,RELIANCE BY THE ITAT ON THE DECISION RENDE RED IN THE CONTEXT OF PROVISIONS OF SEC. 115J OF THE ACT FOR HOLDING THAT ISSUE OF LEVY OF INTEREST U/S ITA N O.2825 /DEL./2010 18 234C ON TAX ON BOOK PROFITS COMPUTED U/S 115JA OF T HE ACT,IS DEBATABLE ,IS NOT CORRECT IN OUR OPINION. 14.2 THE DECISION IN . MAX INDIA(SUPRA), WAS REN DERED IN ITS OWN PECULIAR FACTS AND CIRCUMSTANCES IN THE CONTEXT OF PROVISIONS OF SEC. 263 OF THE ACT WHILE THE LD. AR DID NOT DEMONSTRATE BEFORE US AS TO HOW THIS DEC ISION HELPS THE ASSESSEE. 14.3 IN . PALANI ANDAVAR COTTON & SYNTHETIC SPIN NERS LTD.(SUPRA), THE ISSUE RELATED TO THE COMPUTATION OF BOOK PROFIT AND THE CARRY FORWARD OF LOSS AND THE DEPRECIATION FOR PURPOSES OF SECTION 115J OF THE AC T IN THE AYS 1988-89 TO 1990- 91. HONBLE HIGH COURT OBSERVED THAT ON THE DATE O F THE PROCEEDINGS TAKEN UNDER SECTION 143(1)(A) AS WELL AS UNDER SECTION 15 4, ADMITTEDLY, THERE WAS A DISPUTE WITH REFERENCE TO THE COMPUTATION OF BOOK P ROFIT AND THE CARRY FORWARD OF LOSS AND THE DEPRECIATION FOR PURPOSES OF SECTION 1 15J AND THE LAW ON THE QUESTION WAS SETTLED BY THE MADRAS HIGH COURT AND A GAIN BY THE SUPREME COURT, WITH THE UNCERTAINTY EXISTING AS ON THE DATE WHEN T HE PROCEEDINGS UNDER SECTION 143(1)(A) WERE SUBJECTED TO SECTION 154, THE JURISD ICTION UNDER SECTION 154 WAS NOT AVAILABLE TO CORRECT THE ILLEGALITY IN AN ASSES SMENT. AN IMPRESSION FORMED ON THE SCOPE OF THE PROVISIONS COULD NOT BE A MISTAKE OR AN ERROR APPARENT FROM THE RECORD SO AS TO JUSTIFY THE EXERCISE OF JURISDICTI ON UNDER SECTION 154. THE INVOKING OF THE PROVISIONS OF SECTION 154 PRESUPPOSES A MIS TAKE OR AN ERROR WHICH IS PATENT OR OBVIOUS AND DOES NOT INVOLVE A LONG DRAW N PROCESS OF REASONING ON A POINT WHICH IS ALREADY A DEBATABLE ISSUE. HOW THIS DECISION, RENDERED ON AN ALTOGETHER DIFFERENT ISSUE OF CARRY FORWARD OF LOSS AND DEPRECIATION WHILE DETERMINING BOOK PROFITS U/S 115J OF THE ACT, HELPS THE ASSESSEE HAS NOT BEEN EXPLAINED BEFORE US BY THE LD. AR. IN THE PRESENT C ASE ISSUE INVOLVED IS MANDATORY LEVY OF INTEREST U/S 234C OF THE ACT IN T ERMS OF PROVISIONS OF SEC. 115JB(5) OF THE ACT AND THE ASSESSEE SOUGHT RECTIF ICATION ON THE BASIS OF A DECISION RENDERED IN THE CONTEXT OF PROVISIONS OF S EC. 115J OF THE ACT. THE CREATION OF A DISPUTE WHILE RELYING ON DECISIONS RE NDERED IN THE CONTEXT OF AN ALTOGETHER DIFFERENT PROVISION, DOES NOT ENTITLE TH E ASSESSEE TO HAVE RECOURSE TO PROVISIONS TO SEC. 154 OF THE ACT, ESPECIALLY WHEN ON THE DATE OF PROCESSING OF ITA N O.2825 /DEL./2010 19 RETURN AND EVEN AT THE TIME OF PASSING OF IMPUGNED ORDER, A DIRECT DECISION OF HONBLE KARNATAKA HIGH COURT WAS AVAILABLE IN FAVOU R OF REVENUE AND NO CONTRARY DECISION WAS POINTED OUT AT ALL BY THE AS SESSEE. SUBSEQUENTLY, HONBLE APEX COURT IN ROLTA INDIA LTD.(SUPRA) VIDE THEIR DECISION DATED 7.1.2011 UPHELD THE LEVY OF INTEREST U/S 234B ON THE TAX CALCULA TED ON BOOK PROFITS U/S 115JA OF THE ACT 14.4 IN JIYAJEERAO COTTON MILLS LIMITED. (SUPRA ),RELIED UPON BY THE LD. AR, HONBLE CALCUTTA HIGH COURT OBSERVED THAT THE LAW L AID DOWN BY THE SUPREME COURT, CANNOT BE SAID TO HAVE RETROSPECTIVE OPERATI ON IN THE SENSE THAT ALTHOUGH A DEBATE OR DOUBT OR A CONFLICT OF JUDICIAL OPINION IS RESOLVED AND SETTLED BY THE SUPREME COURT, YET STILL THAT DOES NOT OBLITERATE T HE EXISTENCE OF SUCH DEBATE OR DOUBT OR CONFLICT THAT EXISTED PRIOR TO THE DECISIO N OF THE SUPREME COURT SETTING AT REST SUCH DEBATE OR DOUBT OR CONFLICT. WITH DUE RES PECT TO THESE OBSERVATIONS OF THE HONBLE HIGH COURT, THE VIEW TAKEN IN THE CITE D DECISION IS QUITE CONTRARY TO THE VIEW TAKEN BY THE HONBLE APEX COURT IN ACIT V S. SAURASHTRA KUTCH STOCK EXCHANGE LIMITED, 305 ITR 227 ,WHEREIN IT WAS HELD THAT IN OUR JUDGMENT, IT IS ALSO WELL-SETTLED THAT A JUD ICIAL DECISION ACTS RETROSPECTIVELY. ACCORDING TO BLACKSTONIAN THEORY, IT IS NOT THE FUNCTION OF THE COURT TO PRONOUNCE A 'NEW RULE' BUT TO MAINTAIN AND EXPOUND THE 'OLD ONE'. IN OTHER WORDS, JUDGES DO NOT MAKE LAW, THEY ONLY DISC OVER OR FIND THE CORRECT LAW. THE LAW HAS ALWAYS BEEN THE SAME. IF A SUBSEQUENT D ECISION ALTERS THE EARLIER ONE, IT (THE LATER DECISION) DOES NOT MAKE NEW LAW. IT ONLY DISCOVERS THE CORRECT PRINCIPLE OF LAW WHICH HAS TO BE APPLIED RETROSPECT IVELY. TO PUT IT DIFFERENTLY, EVEN WHERE AN EARLIER DECISION OF THE COURT OPERATED FOR QUITE SOME TIME, THE DECISION RENDERED LATER ON WOULD HAVE RETROSPECTIVE EFFECT C LARIFYING THE LEGAL POSITION WHICH WAS EARLIER NOT CORRECTLY UNDERSTOOD. 14.41 IN THEIR AFORESAID DECISION, HONBLE APEX COU RT AFFIRMED THE VIEW TAKEN BY THE HONBLE GUJRAT HIGH COURT IN THEIR DECISION IN SUHRID GEIGY LTD. V. COMMISSIONER OF SURTAX [1999] 237 ITR 834 ,WHILE HOLDING THAT IF THE POINT IS COVERED BY A DECISION OF THE JURISDICTIONAL HIGH CO URT OR SUPREME COURT RENDERED PRIOR OR EVEN SUBSEQUENT TO THE ORDER OF RECTIFICAT ION, IT COULD BE SAID TO BE A ITA N O.2825 /DEL./2010 20 'MISTAKE APPARENT FROM THE RECORD' UNDER SECTION 25 4(2) OF THE ACT AND COULD BE CORRECTED BY THE TRIBUNAL. 15 WE MAY FURTHER POINT OUT THAT RELIANCE BY THE ASSESSEE IN THEIR APPLICATION U/S 154 OF THE ACT ON THE DECISION IN KWALITY BISCU ITS LTD.(SUPRA), WHICH WAS RENDERED IN THE CONTEXT OF DIFFERENT PROVISIONS OF SEC. 115J OF THE ACT AND IGNORING SPECIFIC PROVISIONS OF SEC. 115JB(5) OF T HE ACT AS ALSO RELIANCE BY THE LD. AR ON DECISIONS WHICH WERE RENDERED IN DIFFERENT CO NTEXT AND CIRCUMSTANCES IS NOT IN ACCORDANCE WITH LAW , IN VIEW OF FOLLOWING OBSERVATIONS OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. SUN ENGINEERIN G WORKS PVT. LTD., 198 ITR 257 : IT IS NEITHER DESIRABLE NOR PERMISSIBLE TO PICK OUT A W ORD OR A SENTENCE FROM THE JUDGMENT OF THIS COURT, DIVORCED FROM THE CONT EXT OF THE QUESTION UNDER CONSIDERATION AND TREAT IT TO BE THE COM PLETE ' LAW ' DECLARED BY THIS COURT. THE JUDGMENT MUST BE READ AS A WHOLE AND THE OBSERVATIONS FROM THE JUDGMENT HAVE TO BE CONSIDERED IN THE LIGHT OF THE QUESTIONS WHICH WERE BEFORE THIS COURT. A DECISION O F THIS COURT TAKES ITS COLOUR FROM THE QUESTIONS INVOLVED IN THE CASE I N WHICH IT IS RENDERED AND, WHILE APPLYING THE DECISION TO A LATER CASE, THE COURTS MUST CAREFULLY TRY TO ASCERTAIN THE TRUE PRINCIPLE LAID DOWN BY THE DECISION OF THIS COURT AND NOT TO PICK OUT WORDS OR SENTEN CES FROM THE JUDGMENT, DIVORCED FROM THE CONTEXT OF THE QUESTIONS UN DER CONSIDERATION BY THIS COURT, TO SUPPORT THEIR REASONINGS. IN MADHAV RAO JIVAJI RAO SCINDIA BAHADUR V. UNION OF INDIA [19 71] 3 SCR 9; AIR 1971 SC 530, THIS COURT CAUTIONED (AT PAGE 578 OF AIR 1971 SC). 15.1 IN THIS CONTEXT ,HONBLE SUPREME COURT CAUT IONED IN THEIR DECISION DATED 6.3.2009 IN THE CASE OF STATE OF AP VS. M. RADHA KRISHNA MURTHY,[CRIMINAL APPEAL NO. 386 OF 2002] 6. COURTS SHOULD NOT PLACE RELIANCE ON DECI SIONS WITHOUT DISCUSSING AS TOHOW THE FACTUAL SITUATION FITS IN WITH THE FACT S ITUATION OF THE DECISION ON WHICH RELIANCE IS PLACED. OBSERVATIONS OF COURTS ARE NEIT HER TO BE READ AS EUCLID'S THEOREMS NOR AS PROVISIONS OF THE STATUTE AND THAT TOO TAKEN OUT OF THEIR CONTEXT. THESE OBSERVATIONS MUST BE READ IN THE CONTEXT IN W HICH THEY APPEAR TO HAVE BEEN STATED. JUDGMENTS OF COURTS ARE NOT TO BE CONS TRUED AS STATUTES. TO ITA N O.2825 /DEL./2010 21 INTERPRET WORDS, PHRASES AND PROVISIONS OF A STATUT E, IT MAY BECOME NECESSARY FOR JUDGES TO EMBARK INTO LENGTHY DISCUSSIONS BUT T HE DISCUSSION IS MEANT TO EXPLAIN AND NOT TO DEFINE. JUDGES INTERPRET STATUTE S, THEY DO NOT INTERPRET JUDGMENTS. THEY INTERPRET WORDS OF STATUTES; THEIR WORDS ARE NOT TO BE INTERPRETED AS STATUTES . 8. CIRCUMSTANTIAL FLEXIBILITY, ONE ADDITIONAL OR DIFFERENT FACT MAY MAKE A WORLD OF DIFFERENCE BETWEEN CONCLUSIONS IN TWO CASES. DISPOS AL OF CASES BY BLINDLY PLACING RELIANCE ON A DECISION IS NOT PROPER. 9. THE FOLLOWING WORDS OF LORD DENNING IN THE MA TTER OF APPLYING PRECEDENTS HAVE BECOME LOCUS CLASSICUS: 'EACH CASE DEPENDS ON ITS OWN FACTS AND A CLOSE SIMILARITY BETWEEN ONE CASE AND ANOTHER IS NOT ENOUGH BECAUSE EVEN A SING LE SIGNIFICANT DETAIL MAY ALTER THE ENTIRE ASPECT, IN DECIDING SUCH CASE S, ONE SHOULD AVOID THE TEMPTATION TO DECIDE CASES (AS SAID BY CORDOZO) BY MATCHING THE COLOUR OF ONE CASE AGAINST THE COLOUR OF ANOTHER. TO DECIDE THER EFORE, ON WHICH SIDE OF THE LINE A CASE FALLS, THE BROAD RESEMBLANCE TO ANOTHER CASE IS NOT AT ALL DECISIVE.' *** *** *** 'PRECEDENT SHOULD BE FOLLOWED ONLY SO FAR AS IT MARKS THE PATH OF JUSTICE, BUT YOU MUST CUT THE DEAD WOOD AND TRIM OFF THE SIDE B RANCHES ELSE YOU WILL FIND YOURSELF LOST IN THICKETS AND BRANCHES. MY PLEA I S TO KEEP THE PATH TO JUSTICE CLEAR OF OBSTRUCTIONS WHICH COULD IMPEDE IT.' 16. IN VIEW OF THE FOREGOING, ESPECIALLY WHEN NE ITHER AT THE TIME OF PROCESSING OF RETURN OR ON THE DATE OF APPLICATION U/S 154 OF THE ACT AND EVEN AT THE TIME OF PASSING OF IMPUGNED ORDER, ANY CONTRARY DECISION I N RESPECT OF LEVY OF INTEREST ON TAX COMPUTED ON BOOK PROFITS U/S 115JB OF THE ACT W AS AVAILABLE NOR POINTED BY THE ASSESSEE BEFORE THE LOWER AUTHORITIES AND EVEN BEFORE US, WE ARE OF THE OPINION THAT NO SUCH DEBATABLE ISSUE AS HAS BEEN MA DE OUT BY THE LD. CIT(A) WHILE REFERRING TO DECISIONS RENDERED IN THE CONTEX T OF ALTOGETHER DIFFERENT PROVISION OF SEC. 115J OF THE ACT, EXISTED .IN VIEW OF SPECIFIC PROVISIONS OF SEC. 115JB(5) OF THE ACT AND IN THE LIGHT OF VIEW TAKEN IN THE AFORESAID DECISIONS BY THE HONBLE APEX COURT IN ROLTA INDIA LTD.(SUPRA) ,SAURASHTRA KUTCH STOCK EXCHANGE LIMITED (SUPRA) AND BY THE HONBLE KARNATA KA HIGH COURT IN JINDAL THERMAL POWER CO. LTD. (SUPRA), AND SANKALA POLYM ERS P LTD(SUPRA) AS ALSO OBSERVATIONS OF THE HONBLE MADRAS HIGH COURT IN GE ETHA RAMAKRISHNA MILLS P LTD.(SUPRA), WE ARE OF THE OPINION THAT THE AO IS P ERFECTLY JUSTIFIED IN LEVYING INTEREST U/S 234C ON TAX DETERMINED ON BOOK PROFITS CALCULATED U/S 115JB OF THE ITA N O.2825 /DEL./2010 22 ACT AND THERE WAS NO SUCH DEBATABLE ISSUE AS HAS BE EN MADE OUT BY THE LD. CIT(A). IN VIEW THEREOF, WE VACATE THE FINDINGS OF THE LD. CIT(A) AND ALLOW GROUND NO.1 IN THE APPEAL OF THE REVENUE. : 17. NO ADDITIONAL GROUND HAVING BEEN RAISED BEFOR E US IN TERMS OF RESIDUARY GROUND NO.2 IN THE APPEAL, ACCORDINGLY, THIS GROUND IS DISMISSED. 18. NO OTHER SUBMISSION OR ARGUMENT WAS MADE BEF ORE US. 19. IN THE RESULT, APPEAL IS ALLOWED. SD/- SD/- (I.P. BANSAL) (A.N. PAHUJA) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) NS COPY OF THE ORDER FORWARDED TO :- 1. D.C.I.T., CIRCLE 2(1), NEW DELHI. 2 M/S BHARAT ALUMINIUM COMPANY LTD., CORE-6, SCOPE COMPLEX, LODI ROAD, NEW DELHI. 3. CIT(A)-V, NEW DELHI. 4. CIT CONCERNED. 5. DR, ITAT,A BENCH, NEW DELHI 6. GUARD FILE. BY ORDER, DEPUTY / ASSTT.REGISTRAR ITAT, DELHI ORDER PRONOUNCED IN OPEN COURT