By Sri. E. I. Sanmathi, Advocate Forsri. K v. Aravind, Advocate

1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU ON THE 4 DAY OF FEBRUARY, 2020. BEFORE THE HON'BLE MR. JUSTICE RAVI MALIMATH AND. THE HON'BLE MR. JUSTICE M.I.ARUN| %WRIT APPEAL No.5854 OF 2017 (1IT) BETWEEN: M/S CANBANK FINANCIAL SERVICES LTD.(WHOLLY OWNED SUBSIDIARY OFCANARA BANK), HAVING ITSREGISTERED OFFICE ATNAVEEN COMPLEX, 14|M.G.ROAD, TRINITY CIRCLE|BENGALURU —- 560 OOL.REPRESENTED BY S. NARAYANA SETTY,.AGED ABOUT 55 YEARS, SON OF LATE S. SEETHARAMAIAH SETTY,RESIDING AT BENGALURU. .., APPELLAN[— (BY SRI. BALRAM R. RAO, ADVOCATE) AND: CHIEF COMMISSIONER OF INCOME TAXCENTRAL REVENUE BUILDINGQUEEN’S ROAD, BENGALURU- 560 OO1, |KARNATAKA ~., RESPONDENT| (BY SRI. E. I. SANMATHI, ADVOCATE FOR|SRI. K. V. ARAVIND, ADVOCATE) | THIS WRIT APPEAL IS FILED UNDER SECTION 4OF THE KARNATAKA HIGH COURT ACT PRAYING TO!SET ASIDE THE ORDER DATED 21/08/2017 IN WRITPETITION NO.7276 OF 2017 (TAX-IT) PASSED BY THE.LEARNED SINGLE JUDGE AND TO ALLOW THIS WRIT|APPEAL WITH COSTS, THIS WRIT APPEAL COMING ON FOR HEARING,THIS DAY, M.I.ARUN J., DELIVERED THE FOLLOWING: JUDGMENT Aggrieved by the order dated 21.08.2017,passed by the learned Single Judge in dismissing writ.petition No.7276 of 2017, the petitioner therein is inappeal.| 2. The brief facts of the case are as follows: The appellant had a dispute with M/s.Hongkong.& Shangai Banking Corporation Limited (nereinafterreferred to aS M/s.HSBC’ for snort). It went up toSupreme Court of India. On 15.07.2013, the Hon'bleSupreme Court dismissed the appeal filed byM/s.HSBC and on 05.08.2013 directed the Registryof the Supreme Court to release the moneydeposited by M/s.HSBC in favour of the appellant| nerein. Accordingly, the appellant received a sum of.Rs.102,59,36,115/-, whicn resulted in profit ofRs.56,01,36,301/- for the financial year 2013-2014.Tne same was deposited in the appellant's account|on 03.10.2013. In the meantime, on 14.08.2013,|M/s. HSBC filed a review petition against the.judgment of the Hon'ble Supreme Court of India.directing the release of money to the appellant)nerein. Tne Hon'ble Supreme Court on 03.12.2013,dismissed the review petition filed Dy M/s.HSBC. 3. Tne appellant on the ground that matter|was pending before the Supreme Court, paid the)required advance tax for the Assessment Year 2014-2015 only in the third quarter. However, the)authorities on the ground that advance tax was not)paid in the first two quarters, charged interest underSection 234C of Income Tax Act, 1961, amounting toRs.20,21,466/-. The appellant challenged the samebefore the respondent herein seeking waiver of 4 complete interest charged under Section 234C of the.Income Tax Act. It nas to be noted tnat the saidwaiver of interest is governed by CBDT's order under. Section 119(2)(a) in F.No.400/29/2002-IT(B) dated| 26.06.2006. The relevant provision of the said order|reads as follows:- "4.7 Waiver of Interest under section234C:Waiver of interest charged under|Section 254C is governed by the guidelines|specifieqd in paragraph No.2 of tne Board'sorder (supra) as reproduced below:- Para 2(bD) Any income cnargeable toincome-tax under any head of income,|otner than Capital gains is received or accrued after due aate of payment of tne|first or subsequent instaliments of advance|tax,which was neither anticipated nor wasin the contemplation of the assessee,and|the advance tax on such income Is paid tn|the remaining instaliment or installments, and|theChiefCommissioner/Director|General is satisfied on the facts andcircumstances of the case thet this Is 2a fitcase for reduction or waiver of the [nterest|chargeable under Section 254C if tne[ncome Tax Act.” 4The|respondentIn|Itsorder adated19.09.2016 has observed tnat the Hon’bie Supreme. Para 2(bD) Any income cnargeable toincome-tax under any head of income,|otner than Capital gains is received or accrued after due aate of payment of tne|first or subsequent instaliments of advance|tax,which was neither anticipated nor wasin the contemplation of the assessee,and|the advance tax on such income Is paid tn|the remaining instaliment or installments, and|theChiefCommissioner/Director|General is satisfied on the facts andcircumstances of the case thet this Is 2a fitcase for reduction or waiver of the [nterest|chargeable under Section 254C if tne[ncome Tax Act.” 4The|respondentIn|Itsorder adated19.09.2016 has observed tnat the Hon’bie Supreme. Court dismissed the appeal filed by M/s.HSBC on)15.07.2013 against the appellant nerein and directedthe Registry on 05.08.2013 to release the money to.the appellant herein. The said amount was Kept in|fixed deposit and after TDS on interest and other|deductions, the assessee company i.e., appellant|nerein received a pay order of Rs.102,59,36,115/-.on 03.10.2013. As the Hon'ble Supreme Court)dismissed the appeal against the appellant herein on.15.07.2013, the appellant became eligible to receivethe sum accrued to it. Tne 2[<3]installment of Income.tax was due on 15.09.2013. It was only the first|installment of advance tax which was due on.15.09.2013 nad lapsed. Hence, the respondent.passed an order waiving the interest for not paying.the advance tax prior to 15.06.2013 but held that)the appellant company is liable to pay interest for|not paying the advance tax prior to 15.09.2013 andthus fixed interest liability at Rs.15,16,107/-. 6 5. The same is challenged by the appellant in|the instant writ petition. Tne learned Single Judge.taking into consideration the date on whicn the)Hon’‘ble Supreme Court dismissed the appeal asagainst the appellant herein and after appreciatingthe reasoning given by the respondent in the)impugned|order,dismissed.tne|writpetition.Aggrieved by the same, the petitioner therein nas_preferred this appeal. 6. It is the contention of the appellant tnat tneamount was received by it on 03.10.2013, though.the Hon ble Supreme Court had dismissed the appealon 15.07.2013 and a direction was issued to theRegistry to release the amount in favour of the.appellant on 05.08.2013. Thus, the amount was)received after 15.09.2013, the date when the 2[<3]instaliment for advance tax became due. On this.ground, the appellant has contended that the) T reasoning given by the respondent and the learned.Single Judge are bad. The otner ground raised by|the appellant is that M/s.HSBC filed a review petitionagainst the order passed by the Supreme Court and.tnereviewpetitionWaS|dismissedonlyOn|03.12.2013, which was not considered by the)respondent or the learned Single Judge wnile passingthe order. — 7. Heard learned counsels for the parties. 8. Though the amount was released to the|appellant on 03.10.2013, the same accrued to it on)15.07.7013.whentneHon'bleSupremeCourt.dismissed the appeal of M/s.HSBC. Further, the)Supreme Court has directed its Registry to release.the amount in favour of appellant herein on)05.08.2013. The order of CBDT dated 26.06.2006.as mentioned in paragrapn 4.1.SUPlais clear that Insucn a situation, the appellant will be obliged to pay| the advance tax and on the accrual of the incomewhich in the instant case accrued on 15.0/.2013. |Further, in the absence of any interim order, merefiling of a review petition before the Hon'ble.Supreme Court is no ground for non payment otfadvance tay. For the aforementioned reasons, we do not find it to De a fit case to interfere with the order passedby the learned Single Judge. Consequently, the writappeal is dismissed. No order as to costs. Sd/-.JUDGE Sd/-|JUDGE