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Dy. Commissioner of Income-Tax v/s Sabarmati Paper Udyog Ltd.

    Tax Appeal No. 31 of 2003

    Decided On, 11 September 2017

    At, High Court of Gujarat At Ahmedabad

    By, THE HONOURABLE MR. JUSTICE AKIL KURESHI & THE HONOURABLE MR. JUSTICE BIREN VAISHNAV

    For the Appellant: Mauna M. Bhatt, Advocate. For the Respondent: Nitin Mehta, Advocate.



Judgment Text

Akil Kureshi, J.

Oral:

1. The appeal was admitted for consideration of the following substantial question of law :

"Whether the Income Tax Appellate Tribunal has not substantially erred in law in holding that interest under sections 234B and 234C is not chargeable if the total income is assessed to tax under section 115J of the Income Tax Act?"

2. At one stage, the appeal was disposed of by judgment of the Division Bench dated 24.6.2011. Relying upon the judgment of the Supreme Court in case of Joint Commissioner of Income tax v. Rolta India Ltd reported in (2011) 330 ITR 470(SC), the Division Bench answered the question in favour of the Revenue. The assessee thereupon filed Misc. Civil Application (OJ) No. 15/2015 for review mainly on the ground that the decision of Supreme Court in case of Rolta India Ltd (supra) was rendered in context of provisions contained in sections 115JA and 115JB of the Act whereas judgment of Karnataka High Court in case of Kwality Biscuits Ltd. v. Commissioner of Income-tax reported in (2000) 243 ITR 519 (Karnataka), was in context of section 115J of the Act which was confirmed by the Supreme Court. This was also noticed in the later decision in case of Rolta India Ltd (supra). The Division Bench allowed the Revenue's application making following observations :

"8. On the other hand, Mr. Nitin Mehta, learned Senior Standing Counsel for the respondent has very fairly submitted that the controversy involved in the present case is no longer res integra, inasmuch as, this court in the case of Deputy C.I.T. (Assistant) v. Farmson Pharmaceuticals Guj. Ltd., rendered on 07.04.2011 in Tax Appeal No. 390 of 1999, has followed the decision of the Karnataka High Court in Kwality Biscuits Ltd. (supra) as affirmed by the Supreme Court in Commissioner of Income Tax v. Kwality Biscuits Ltd. (supra) and has held that interest could not be charged under sections 234B and 234C of the Act when the total income was determined under section 115J of the Act. It was, accordingly, submitted that the court may pass such order as it deems fit in the facts and circumstances of the case.

9. In the light of the facts and submissions noted here-in-above, it is evident that the earlier ex-parte judgment and order dated 24.06.2011 had been made by this court on an erroneous impression that the controversy involved in this case stands concluded by the decision of the Supreme Court in the case of Rolta India Limited (supra). A perusal of the decision of the Supreme Court in the case of Rolta India Limited (supra) 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 decision of the Karnataka High Court in the case of Kwality Biscuits Ltd. (supra) which was affirmed by the Supreme Court was delivered in the context of section 115J of the Act. A conjoint reading of section 115J of the Act as it stood at the relevant time, with sections 115JA and 115JB of the Act reveals that insofar as sections 115JA and 115JB are concerned, they are a complete code in themselves. Subsection (4) of section 115JA and subsection (5) of section 115JB of the Act specifically provide that save as otherwise provided in the section, all other provisions of the Act shall apply to every assessee, being a company, mentioned in the section; whereas, no similar provision is found in section 115Jof the Act. Moreover, the Supreme Court in the case of Rolta India Limited (supra) has specifically referred to the decision of the Karnataka High Court in the case of Kwality Biscuits Ltd. (supra) as having been affirmed by the Supreme Court in Kwality Biscuits Ltd. (supra) and has not disturbed the position of law enunciated therein.

10. In Rolta India Limited (supra), the Supreme Court, in the context of the provisions of sections 115JA and 115JB of the Act, which are held to be a self-contained code pertaining to MAT, held that interest under sections 234B and 234C of the Act shall be payable on failure to pay advance tax in respect of tax payable under those sections. Apparently therefore, the judgment and order dated 24.06.2011 made by this court in Tax Appeal No. 31 of 2003 has been rendered on a misreading of the decision of the Supreme Court in the case of Rolta India Limited (supra). Moreover, this court in the case of Farmson Pharmaceuticals Guj. Ltd (supra) has followed the decision of the Karnataka High Court in Kwality Biscuits Ltd. (supra) as affirmed by the Supreme Court and has held that interest cannot be charged under section 234B and 234C of the Act where the total income is determined under section 115J of the Act. The said decision has been ren

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dered on 07.04.2011, that is, prior in point of time to the judgment and order dated 24.06.2011 which is sought to be recalled. In the aforesaid premises, the application deserves to be allowed." 3. The said order recalling the judgment allowing the Revenue's petition has given detail reasons why the Bench had previously erred in answering the question in favour of the Revenue. We adopt the reasoning's and dismiss the appeal answering the question against the Revenue and in favour of the assessee.
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