R. Sudhakar, J@mdashThe assessee has filed this appeal challenging the order of the Income Tax Appellate Tribunal ''C'' Bench, Chennai, dated 31.5.2007 made in I.T.A. No.1092/Mds/2003 for the assessment year 2000-2001, and the same was admitted on the following question of law:
"Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that interest under Section 234B of the Income Tax Act can be levied for default in payment of advance tax when the income is computed under Section 115JA of the Act?"
2. The learned counsel for the assessee fairly submits that the issue raised in this appeal is no longer res integra in view of the decision of the Supreme Court in
3. In Rolta India Limited case, referred supra, the issue considered by the Supreme Court is as under:
"A short question which arises for determination in this batch of cases is whether interest under section 234B can be charged on the tax calculated on the book profits under section 115JA? In other words, whether advance tax was at all payable on book profits under section 115JA?"
and while answering the said issue, the Supreme Court held as under:
"6. At the outset, it may be stated that sections 234B and 234C do not make any reference to section 115J/115JA. Section 234B lays down that where advance tax is required to be paid under section 208 and there is a failure on that if the amount of advance tax paid under section 210 is less than 90 per cent of the assessed tax, then, in that case the assessee is liable to pay interest. (3) Section 234C refers to interest for deferment of advance tax. It says that if the assessee has to pay advance tax on its current income on or before 15th of June and the tax paid is less than 15 per cent of the tax due on the returned income or the amount of the advance tax paid on or before 15th of September is less than 45 per cent of the tax due on the returned income or the amount of such advance tax paid on or before 15th of December is less than 75 per cent of the tax due on the returned income, then the assessee shall be liable to pay interest at the specified rate on the amount of the shortfall from 15 per cent or 45 per cent or 75 per cent, as the case may be, of the tax due on the returned income.
7. In our view, section 115J/115JA are special provisions. Section 207 envisages that tax shall be payable in advance during any financial year on current income in accordance with the scheme provided in sections 208 to 219 (both inclusive) in respect of the total income of the assessee that would be chargeable to tax for the assessment year immediately following that financial year. Section 215(5) of the Act defined what is "assessed tax", i.e., tax determined on the basis of regular assessment so far as such tax relates to income subject to advance tax. The evaluation of the current income and the determination of the assessed income had to be made in terms of the statutory scheme comprising section 115J/115JA of the Act. Hence, levying of interest was inescapable. The assessee was bound to pay advance tax under the said scheme of the Act. Section 115J/115JA of the Act were special provisions which provided that where in the case of an assessee, the total income as computed under the Act in respect of any previous year relevant to the assessment year is less than 30 per cent of the book profit, the total income of the assessee shall be deemed to be an amount equal to 30 per cent of such book profit. The object is to tax zero-tax companies.
8. Section 115J was inserted by the Finance Act, 1987 with effect from April 1, 1988. This section was in force from April 1, 1988 to March 31, 1991. After April 1, 1991, section 115JA was inserted by the Finance Act of 1996 with effect from April 1, 1997. After (4) insertion of section 115JA, section 115JB was inserted by the Finance Act, 2000 with effect from April 1, 2001. It is clear from reading sections 115JA and 115JB that the question whether a company which is liable to pay tax under either provision does not assume importance because specific provision(s) is made in the section saying that all other provisions of the Act shall apply to the MAT company (section 115JA(4) and section 115JB(5)). Similarly, amendments have been made in the relevant Finance Acts providing for payment of advance tax under sections 115JA and 115JB. So far as interest leviable under section 234B is concerned, the section is clear that it applies to all companies. The prerequisite condition for applicability of section 234B is that the assessee is liable to pay tax under section 208 and the expression "assessed tax" is defined to mean the tax on the total income determined under section 143(1) or under section 143(3) as reduced by the amount of tax deducted or collected at source. Thus, there is no exclusion of section 115J/115JA in the levy of interest under section 234B. The expression "assessed tax" is defined to mean the tax assessed on regular assessment which means the tax determined on the application of section 115J/115JA in the regular assessment.
9. The question which remains to be considered is whether the assessee, which is a MAT company, was not in a position to estimate its profits of the current year prior to the end of the financial year on 31st March. In this connection the assessee placed reliance on the judgment of the Karnataka High Court in the case of
4. In view of the law enunciated in the decision referred supra, we have no hesitation to hold that the Tribunal was right in imposing interest under Section 234B of the Act for default in payment of advance tax.
In the result, this appeal is dismissed by answering the question of law against the assessee and in favour of the Revenue. No costs.
