CHARBHUJA INDUSTRIOES P.LTD, MUMBAI V. ADDL CIT RG 2(1), MUMBAI

ITA 6902/MUM/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75286 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-01-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 12-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bonafide belief
• Section: 143(3); 234B; 115JB

Judgement Text

, LH LHLH LH IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL C CC C BENCH, BENCH, BENCH, BENCH, MUMBAI MUMBAI MUMBAI MUMBAI , . , . , ! ! ! ! '# '# '# '# BEFORE BEFORE BEFORE BEFORE SHRI SHRI SHRI SHRI VIJAY PAL RAO, JM VIJAY PAL RAO, JM VIJAY PAL RAO, JM VIJAY PAL RAO, JM & & & & SHRI SHRI SHRI SHRI D. KARUNAKARA RAO D. KARUNAKARA RAO D. KARUNAKARA RAO D. KARUNAKARA RAO, AM , AM , AM , AM ./ I.T.A. NO. I.T.A. NO. I.T.A. NO. I.T.A. NO.6 66 69 99 901/MUM/2012 01/MUM/2012 01/MUM/2012 01/MUM/2012 ( $% $% $% $% & & & & / ASSESSMENT YEAR :2008-09) M/S CHARBHUJA INDUSTREIS PVT. LTD., 502, ABHAYA STEEL HOUSE, BARODA STREET MUMBAI-9 % % % % / VS. ADDL. CIT-2(1) MUMBAI ( '( / APPELLANT APPELLANT APPELLANT APPELLANT) .. ( )*'( / RESPONDENT RESPONDENT RESPONDENT RESPONDENT) ./ I.T.A. NO. I.T.A. NO. I.T.A. NO. I.T.A. NO.6902/MUM/2012 6902/MUM/2012 6902/MUM/2012 6902/MUM/2012 ( $% $% $% $% & & & & / ASSESSMENT YEAR :2009-10) M/S CHARBHUJA INDUSTREIS PVT. LTD., 502, ABHAYA STEEL HOUSE, BARODA STREET MUMBAI-9 % % % % / VS. ADDL. CIT-2(1) MUMBAI #' ! ./ + ./ PAN/GIR NO. :AABCC7512P ( '( / A AA APPELLANT PPELLANT PPELLANT PPELLANT) .. ( )*'( / RESPONDENT RESPONDENT RESPONDENT RESPONDENT) $% $%$% $% ,- ,- ,- ,- . / . / . / . / /ASSESSEE BY : SHRI VIMAL PUNMIYA # # # # . / . / . / . / / REVENUE BY : SHRI RAVI PRAKASH % % % % . .. . -! -! -! -! / DATE OF HEARING : 16 TH JANUARY 2014 01& 01& 01& 01& . .. .-! -! -! -! /DATE OF PRONOUNCEMENT: 24 TH JANUARY 2014 ' 2 / O R D E R PER : , . . / VIJAY PAL RAO, JM THESE APPEALS BY THE ASSESSEE ARE DIRECTED AGAINST THE TWO SEPARATE ORDERS OF COMMISSIONER OF INCOME TAX(APPEA LS) BOTH DATED 14.9.2012 FOR THE ASSESSMENT YEAR 2008-09 AND 2009- 10 RESPECTIVELY. 2. THE ASSESSEE HAS RAISED THE SOLITARY COMMON GROU ND IN THESE APPEALS. THE GROUND RAISED FOR THE ASSESSMENT YEAR 2008-09 IS AS UNDER: ITA NO.6901 & 6902/M/2012 CHARBHUJA INDUSTRIES PVT. LTD. 2 THE LD. COMMISSIONER OF INCOME TAX (A) ERRED IN CO NFIRMING CHARGING INTEREST U/S 234B OF ` 18,79,294/- AND U/S 234C OF ` 3,70,502/- IN VIEW OF THE PROVISIONS OF U/S 115JB O F THE INCOME TAX ACT, 1961. 3. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF PROCE SSING OF MINERAL OIL SEEDS. IT FILED RETURN OF INCOME DECLARING INCOME O F ` 82,96,100/- UNDER THE NORMAL PROVISIONS OF THE ACT AND ` 93,76,366/- AS PER SECTION 115JB. THE A.O WHILE COMPLETING THE ASSESSMENT U/S 143(3) COMPUTED BOOK PROFIT FOR THE PURPOSE OF MAT U/S 115JB AND ACCORDINGLY LE VIED THE INTEREST U/S 234B AND 234C. THE ASSESSEE PAID THE TAX ON THE INC OME ASSESSED BY THE A.O HOWEVER CHALLENGED THE LEVY OF INTEREST U/S 234 B AND 234C BEFORE THE CIT(A). THE ASSESSEE CONTENDED BEFORE THE CIT(A) TH AT AT THE RELEVANT POINT OF TIME THERE ARE VARIOUS DECISIONS INCLUDING THE DECISION OF HONBLE SUPREME COURT IN CASE OF CIT VS KWALITY BISCUITS LT D. 284 ITR 434 WHEREIN IT HAS BEEN HELD THAT NO INTEREST U/S 234B AND 234C IS LEVIABLE ONCE THE INCOME TAX IS DETERMINED U/S 115JB. THE ASSESSEE HA S ALSO RELIED UPON THE VARIOUS DECISIONS OF HONBLE HIGH COURTS INCLUD ING A DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN CASE OF SNOWCE M INDIA LTD. VS DCIT 178 TAXMAN 478 AS WELL AS DECISION OF HONBLE GUJAR AT HIGH COURT IN CASE OF DCIT VS ASSOCIATED CROWN CLOSURES (P.) LTD. 315 ITR 291. PLACING THE RELIANCE ON THE VARIOUS DECISIONS THE ASSESSEE CONT ENDED BEFORE THE CIT(A) THAT THE NON-PAYMENT OF ADVANCE TAX ON THE B OOK PROFIT WAS UNDER BONAFIDE BELIEF OF THE ASSESSEE AND THEREFORE, THE INTEREST U/S 234B AND 234C CANNOT BE CHARGED. THE CIT(A) DID NOT ACCEPT T HE CONTENTION OF THE ASSESSEE AND HELD THAT IN VIEW OF THE DECISION OF H ONBLE SUPREME COURT IN CASE OF JCIT VS ROLTA INDIA LTD. 196 TAXMAN 594 LEVY OF INTEREST U/S ITA NO.6901 & 6902/M/2012 CHARBHUJA INDUSTRIES PVT. LTD. 3 234B AND 234C IS MANDATORY AND CONSEQUENTIAL AND HE NCE CONFIRMED THE SAME. 4. BEFORE US THE LD. A.R OF THE ASSESSEE HAS SUBMIT TED THAT THE CIT(A) HAS TOTALLY IGNORED THE FACT THAT DURING THE ASSESS MENT YEARS UNDER CONSIDERATION THE JUDGEMENT OF HONBLE SUPREME COUR T IN CASE OF CIT VS KWALITY BISCUITS LTD. (SUPRA) WAS THE LAW OF THE LA ND ON THIS POINT AND THEREFORE THE ASSESSEE COULD NOT BE EXPECTED TO PAY ADVANCE TAX IN RESPECT OF BOOK PROFIT FOR THE PURPOSE OF MAT U/S 1 15JB. THE LD. A.R HAS FURTHER SUBMITTED THAT SINCE THE ENTIRE EXERCISE OF COMPUTING THE INCOME OR BOOK PROFIT COULD BE ONLY AT THE END OF FINANCIA L YEAR AND IN VIEW OF THE DECISION OF HONBLE SUPREME COURT AS WELL AS HONBL E HIGH COURT THE ASSESSEE WAS NOT REQUIRED TO PAY THE ADVANCE TAX IN RESPECT OF MAT. THUS, THE NON-PAYMENT OF ADVANCE TAX OF MAT U/S 207 TO 210 OF THE INCOME TAX ACT WOULD NOT ATTRACT THE LEVY OF INTERE ST U/S 234B AND 234C OF THE INCOME TAX ACT. THE LD. A.R HAS ALSO RELIED UPON THE DECISION OF HONBLE CALCUTTA HIGH COURT IN CASE OF BINANI INDUS TRIES LTD. VS CIT 329 ITR 323 AS WELL AS DECISION OF THIS TRIBUNAL IN CAS E OF DEEPAK FERTILIZERS AND PETROCHEMICALS CORPORATION LTD. VS DCIT 304 ITR (AT) 167 (MUM) AND SUBMITTED THAT IT HAS BEEN HELD THAT THE PROVISIONS OF SECTION 207 AND ONWARDS CANNOT BE INVOKED FOR THE PURPOSE OF COMPUT ATION OF INCOME U/S 115J FOR THE REASON THAT THE INCOME WOULD BE COMPUT ED ONLY AFTER FINALIZATION OF BOOKS OF ACCOUNT AFTER THE END OF T HE FINANCIAL YEAR. CONSEQUENTLY, NO INTEREST CAN BE CHARGED FOR NON-PA YMENT OF ADVANCE TAX OF MAT. THE DECISION OF HONBLE SUPREME COURT IN CA SE OF JCIT VS ROLTA ITA NO.6901 & 6902/M/2012 CHARBHUJA INDUSTRIES PVT. LTD. 4 INDIA LTD. (SUPRA) HAS BEEN DELIVERED SUBSEQUENT AN D MUCH AFTER THE END OF THE FINANCIAL YEAR AND THEREFORE, THE ASSESSEE C ANNOT FORESEE THE NON- EXISTING LAW. HE HAS FURTHER SUBMITTED THAT IN THE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE THE INTEREST U/S 234B AND 234C CANNOT BE LEVIED WHEN THE ASSESSEE WAS UNDER BONAFIDE BELIEF THAT ADVANCE TAX WAS NOT PAYABLE IN RESPECT OF MAT. ON THE OTHER HAND, T HE LD. D.R HAS RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW AS WELL AS DECISION OF HONBLE SUPREME COURT IN CASE OF JCIT VS ROLTA INDIA LTD. ( SUPRA). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD. THERE IS NO DISPUTE REGARDING T HE FACT THAT DURING THE ASSESSMENT YEARS UNDER CONSIDERATION THE SETTLED LA W ON THE POINT WAS THE DECISION OF THE HONBLE SUPREME COURT IN CASE O F CIT VS KWALITY BISCUITS LTD. 284 ITR 434 AS WELL AS A NUMBER OF OT HER DECISIONS INCLUDING DECISIONS OF HONBLE JURISDICTIONAL HIGH COURT IN C ASE OF SNOWCEM INDIA LTD. VS DCIT 313 ITR 170 AND IN CASE OF CIT VS NATU RAL GEMS LTD. 327 ITR 269 WHEREIN IT HAS BEEN HELD THAT NO ADVANCE MAT WA S PAYABLE BY THE COMPANY. THEREFORE, THE ASSESSEE HAD NO REASON TO B ELIEF OR FORESEE A SUBSEQUENT DECISION FASTENING THE LIABILITY OF PAYM ENT OF ADVANCE TAX. EVEN OTHERWISE THE DECISION IN CASE OF JCIT VS ROLT A INDIA LTD. (SUPRA) IS A SUBSEQUENT DECISION AND THEREFORE, THE IMPOSSIBILIT IES AT THE RELEVANT POINT OF TIME CANNOT BE THRASHED UPON THE ASSESSEE. IN THE FACTS AND CIRCUMSTANCES AS DISCUSSED ABOVE NO FAULT CAN BE FO UND WITH THE ASSESSEE IN NOT DEPOSITING THE ADVANCE TAX OF MAT IN VIEW OF THE DECISION OF THE HONBLE SUPREME COURT AS WELL AS VARIOUS DECISIONS OF THE HONBLE HIGH ITA NO.6901 & 6902/M/2012 CHARBHUJA INDUSTRIES PVT. LTD. 5 COURT. THE ASSESSEE HAD THE BONAFIDE REASON TO BELI EVE THAT ADVANCE TAX WAS NOT PAYABLE IN RESPECT OF MAT U/S 115JB AS IT W AS SETTLED LAW LAID DOWN BY THE HONBLE SUPREME COURT AND HONBLE HIGH COURT WHICH HOLD GOOD TILL THE SUBSEQUENT DECISION OF HONBLE SUPREM E COURT IN CASE OF JCIT VS ROLTA INDIA LTD. (SUPRA). THEREFORE, PRIOR TO TH E DECISION OF HONBLE SUPREME COURT IN CASE OF JCIT VS ROLTA INDIA LTD. ( SUPRA) SETTLED PROPOSITION OF THE LAW ON THE POINT WAS THAT NO ADV ANCE TAX WAS PAYABLE ON MAT COMPUTED U/S 115JB AND ACCORDINGLY, THE INTE REST U/S 234B AND 234C CANNOT BE LEVIED FOR NON-DEPOSIT OF ADVANCE TA X ON MAT FOR THE YEAR UNDER CONSIDERATION. HENCE, WE DELETE THE LEVY OF I NTEREST U/S 234B AND 234C IN THIS CASE. 6. IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE A LLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 24 TH DAY OF JANUARY 2014 SD/- SD/- ( . ) ! '# (D. KARUNAKARA RAO) ACCOUNTANT MEMBER ( ) $ '# (VIJAY PAL RAO) JUDICIAL MEMBER PLACE: MUMBAI : DATED: 24 TH JANUARY 2014 SUBODH COPY FORWARDED TO: 1 APPELLANT 2 RESPONDENT 3 CIT 4 CIT(A) 5 DR /TRUE COPY/ BY ORDER DY /AR, ITAT, MUMBAI