By TIOL News Service

AHEMDABAD, SEPTEMBER 26, 2017: THE ISSUE BEFORE THIS COURT IS - Whether interest u/s 234B and 234C could be charged on failure to pay advance tax, if the total income was assessed to tax u/s 115J of Income Tax Act. NO is the verdict.

Facts of the case:

The Revenue Department had preferred present appeal challenging the order, whereby the Tribunal had held that interest u/s 234B and 234C would not be chargeable, if the total income was assessed to tax u/s 115J of Income Tax Act.

High Court held that,

++ it is seen that at one stage, the appeal was disposed of by judgment of the Division Bench in favour of the Revenue, by relying upon the judgment of the Supreme Court in case of Joint Commissioner of Incometax v. Rolta India Ltd - 2011-TIOL-02-SC-IT-LB. The assessee thereupon filed Misc. Civil Application for review, mainly on the ground that the decision of Supreme Court in case of Rolta India Ltd was rendered in context of provisions contained in sections 115JA and 115JB, whereas judgment of Karnataka High Court in case of Kwality Biscuits Ltd. v. Commissioner of Income tax - 2003-TIOL-157-HC-KAR-IT, was in context of section 115J which was confirmed by the Supreme Court;

++ a perusal of the judgment of the Supreme Court in the case of Rolta India Limited makes it evident that the same was rendered in the context of the provisions of sections 115JA and 115JB of the Act, whereas the facts of the present case relate to the provisions of section 115J of the Act. The Apex Court in its decision has held that interest u/s 234B & 234C shall be payable on failure to pay advance tax in respect of tax payable under those sections, and such interest cannot be charged, where the total income is determined u/s 115J of the Act. We therefore, adopt the reasonings and answer the question in favour of the assessee.

(See 2017-TIOL-2002-HC-AHM-IT)