No interest is chargeable under sections 234B and 234C for non-payment of MAT

[pawansingla]

IT: No interest is chargeable under sections 234B and 234C for non-payment of minimum alternate tax in advance

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[2014] 49 taxmann.com 391 (Mumbai - Trib.)

IN THE ITAT MUMBAI BENCH 'D'

Rockline Developers (P.) Ltd.

v.

Income-tax Officer*

RAJENDRA, ACCOUNTANT MEMBER
AND DR. S.T.M. PAVALAN, JUDICIAL MEMBER
IT APPEAL NO. 6382 (MUM.) OF 2013
[ASSESSMENT YEAR 2010-11]
FEBRUARY  21, 2014

Section 234B, read with sections 115J and 234C, of the Income-tax Act, 1961 - Interest, chargeable as (MAT Companies) - Assessment year 2010-11 - Whether no interest is chargeable under sections 234B and 234C for non-payment of minimum alternate tax in advance - Held, yes [Para 4][In favour of assessee]

CASE REVIEW

CIT v. Kwality Biscuits Ltd. [2006] 284 ITR 434 (SC) (para 4) followed.

CASES REFERRED TO

Jt. CIT v. Rolta India Ltd. [2011] 330 ITR 470/196 Taxman 594/9 taxmann.com 36 (SC) (para 3) andCIT v. Kwality Biscuits Ltd. [2006] 284 ITR 434 (SC) (para 4).

S.K. Tyagi, Vimal Punmiya and Himanshu Gandhi for the Appellant. A.C. Tejpal for the Respondent.

ORDER

Dr. S.T.M. Pavalan, Judicial Member - This appeal filed by the assessee is directed against the order of the learned Commissioner of Income-tax (Appeals)-20, Mumbai, dated September 16, 2013 for the assessment year 2010-11.

2. In this appeal, the main ground "B" raised by the assessee relates to the decision of the learned Commissioner of Income-tax (Appeals) in confirming the order of the Assessing Officer levying interest under sections 234B and 234C of the Act to the extent of Rs. 2,90,22,007 and Rs. 45,12,423 (sic) respectively.

3. The relevant facts are that after ascertaining the book profit under section 115JB, the Assessing Officer had disallowed the claim of deduction under section 80-IB(10) as such the book profit was not to be reduced by claim of deduction and thus computed taxable income and tax thereon which was inclusive of interest under section 234B of Rs. 2,90,22,007 and interest under section 234C of Rs. 45,12,432. On appeal, the learned Commissioner of Income-tax (Appeals) confirmed the action of the Assessing Officer relying on the decision of the hon'ble apex court in the case of Jt. CIT v.Rolta India Ltd. [2011] 330 ITR 470/196 Taxman 594/9 taxmann.com 36.

4. Having heard both sides and perused the material on record, it is pertinent to mention that the decision of the hon'ble apex court in the case of Rolta India Ltd. (supra) has been passed on January 7, 2011. However, during the relevant assessment year under consideration, the law on this point has been governed by the decision of the hon'ble apex court in the case of CIT v. Kwality Biscuits Ltd.[2006] 284 ITR 434 (SC) according to which no interest has chargeable under sections 234B and 234C for non-payment of minimum alternate tax in advance. Since this difference in the legal position as applicable to the case of the assessee has not been appreciated by the authorities below, we are of the considered view that the authorities below are not justified in confirming/ levying the interest under sections 234B and 234C of the Act and hence the same are deleted.

5. Since the other issues raised in ground No. "A" becomes merely academic in view of the aforementioned adjudication on the main issue the same is dismissed as requires no adjudication.

6. In the result, the appeal filed by the assessee is allowed.

[ketanvyas1975]

very very interesting decision. the SC judgment of Kwality buiscuit was in the context of section 115J and not in context of 115JB. The difference between 115J and 115JB has been noted in several decisions in the context of interest u/s 234B & 234C. The view taken was that since 115JB specifically prescribes application of all other provisions of the Act, interest is chargeble. Similar decisions were there for section 115JA also. I thought the judgment of Rolta has put an end to the controversy but seems not. i also thought that the judgment of SC has always retrospective effect and time of rendering is not important. Let us have views of the expert members on this.