M/S Gie Jewells, F-33 Phase-2, Sez Riico Industrial Area,Sitapura Jaipur Raj v. Pr. Commissioner Of Income Tax, Circle-I, Central Revenuebuilding Department Of Income Tax, Statue Circle, C-Scheme,Jaipur Raj

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Income Tax Appeal No. 107/2018 M/s Gie Jewells, F-33 Phase-2, Sez Riico Industrial Area,Sitapura Jaipur Raj ----Appellant Versus Pr. Commissioner Of Income Tax, Circle-I, Central RevenueBuilding Department Of Income Tax, Statue Circle, C-Scheme,Jaipur Raj ----RespondentConnected With D.B. Income Tax Appeal No. 106/2018 M/s. Gie Jewells, F-33, Phase-2, Scz Riico Industrial Area,Sitapura, Jaipur. ----AppellantVersus Pr. Commissioner Of Income Tax, Circle-I, Central RevenueBuilding, Department Of Income Tax, Statue Circle, C-Scheme,Jaipur. ----Respondent For Appellant(s) : Mr. N.L. AgarwalFor Respondent(s): HON'BLE MR. JUSTICE K.S.JHAVERI HON'BLE MR. JUSTICE VIJAY KUMAR VYAS 03/04/2018 Judgment In both appeals common questions of law and facts are involved, hence, they are decided by this common judgment. By way of these appeals, the appellant has challenged thejudgment and order of the Tribunal whereby the Tribunal hasdismissed the appeal of the assessee. Counsel for the appellant has framed the following substantial questions of law:- In DBITA No. 107/2018 “i) Whether the appellate Tribunal is right in lawand on facts in confirming the order passed by theld. Commissioner of Income Tax (Appeals)sustaining the charge of interest amounting to Rs.4,36,630/- by the ld. AO u/s 234B of the Act of1961? ii) Whether the ld. ITAT is right under law whileholding the provisions of Sec. 115JC at par with theprovisions of Sec. 115JA and 115JB in respect ofliability of payment of advance tax prescribed u/s208 charging of interest u/s 234B of the IncomeTax Act, 1961 in case of non-payment of AdvanceTax which cannot be computed without adjustmentof total income as provided under Sub-section (2)of Sec. 115JC and the application of the provisionsof said section only when a report is obtained in theprescribed form from an accountant certifying thatthe adjusted income and the AMT have beencomputed in accordance with the provisions ofChapter XIIBA? iii) Whether the ld. ITAT was justified under lawwhile sustaining the findings of ld. CIT(A) forconfirming the charge of interest u/s 234B of theIncome Tax Act, 1961 in case of Assessee-Appellant who is a person other than a companyand paid Alternate Minimum Tax (AMT) u/s 115JCbefore filing of the return of income duly auditedand alongwith the report of accountant asprescribed under the said provision? iv) Whether the ld. ITAT was justified under lawwhile ignoring the provision of law that tax creditfor AMT paid by a person u/s 115JC is notrefundable and no interest is payable on tax creditallowed and the tax credit is carried forward andset off in the tax liability of the following years,while the excess advance tax paid by an assesseeis refundable with interest after passing of theassessment order by the AO?” In DBITA No. 106/2018 “i) Whether the appellate Tribunal is right in lawand on facts in confirming the order passed by theld. Commissioner of Income Tax (Appeals)sustaining the charge of interest amounting to Rs.20,14,476/- by the ld. AO u/s 234A & 234B of theAct of 1961? ii) Whether the ld. ITAT is right under law whileholding the provisions of Sec. 115JC at par with theprovisions of Sec. 115JA and 115JB in respect ofliability of payment of advance tax prescribed u/s208 charging of interest u/s 234B of the IncomeTax Act, 1961 in case of non-payment of AdvanceTax which cannot be computed without adjustmentof total income as provided under Sub-section (2)of Sec. 115JC and the application of the provisionsof said section only when a report is obtained in theprescribed form from an accountant certifying thatthe adjusted income and the AMT have beencomputed in accordance with the provisions ofChapter XIIBA? ii) Whether the ld. ITAT is right under law whileholding the provisions of Sec. 115JC at par with theprovisions of Sec. 115JA and 115JB in respect ofliability of payment of advance tax prescribed u/s208 charging of interest u/s 234B of the IncomeTax Act, 1961 in case of non-payment of AdvanceTax which cannot be computed without adjustmentof total income as provided under Sub-section (2)of Sec. 115JC and the application of the provisionsof said section only when a report is obtained in theprescribed form from an accountant certifying thatthe adjusted income and the AMT have beencomputed in accordance with the provisions ofChapter XIIBA? iii) Whether the ld. ITAT was justified under lawwhile sustaining the findings of ld. CIT(A) forconfirming the charge of interest u/s 234B of theIncome Tax Act, 1961 in case of Assessee-Appellant who is a person other than a companyand paid Alternate Minimum Tax (AMT) u/s 115JCbefore filing of the return of income duly auditedand alongwith the report of accountant asprescribed under the said provision? iv) Whether the ld. ITAT was justified under lawwhile ignoring the provision of law that tax creditfor AMT paid by a person u/s 115JC is notrefundable and no interest is payable on tax creditallowed and the tax credit is carried forward andset off in the tax liability of the following years,while the excess advance tax paid by an assesseeis refundable with interest after passing of theassessment order by the AO?” The case of the appellant is that the appellant was assessed under Section 115JC. Counsel for the appellant contended thatSection 115JB & 115JC are not parimateria and the Tribunal hasseriously committed an error in considering the issue andmisconceivly applied the decision of Supreme Court CIT vs. RoltaIndia Ltd.; 330 ITR 470 and the decision of Karnataka High Courtin Kwality Biscuits Ltd. vs. CIT; 243 ITR 519. Counsel for the appellant has taken us to the provisions ofSection 115JB & 115JC and also Finance Act, 2013 so alsoexplanation to 115JB and contended that explanation which was subsequently inserted was not there when the decision wasrendered in Rolta India Ltd. (supra) by the Supreme Court. However, the Tribunal while considering the matter hasspecifically observed as under:- under Section 115JC. Counsel for the appellant contended thatSection 115JB & 115JC are not parimateria and the Tribunal hasseriously committed an error in considering the issue andmisconceivly applied the decision of Supreme Court CIT vs. RoltaIndia Ltd.; 330 ITR 470 and the decision of Karnataka High Courtin Kwality Biscuits Ltd. vs. CIT; 243 ITR 519. Counsel for the appellant has taken us to the provisions ofSection 115JB & 115JC and also Finance Act, 2013 so alsoexplanation to 115JB and contended that explanation which was subsequently inserted was not there when the decision wasrendered in Rolta India Ltd. (supra) by the Supreme Court. However, the Tribunal while considering the matter hasspecifically observed as under:- “3. Before us, the ld. AR of the assessee has submittedthat while filing the return of income the assesseemade payment of alternative minimum tax under theprovisions of section 115JC however, while completingthe assessment the AO charged interest u/s 234B fornot paying the alternative minimum tax as per schemeof advance tax u/s 208. The Ld. AR has contended thatthe provisions of advance tax u/s 208 is not applicableto the facts of the case and in respect of the taxpayment made u/s 115JC. He has further contendedthat the reliance of CIT(A) on the decision of Hon’bleSupreme Court in case of JCIT vs. Rolta India Ltd 196taxmann 594 as well as Hon’ble Karnataka High Courtin case of Jindal Thermal Power Co. Ltd. vs. DCIT 154taxman 547 is misplaced as these decisions are not onsection 115JC but these decisions were rendered withreference to section 115JB which is in respect of MATwhereas section 115JC was introduced in the statutew.e.f. 01.04.2013 and proceeds for payment ofalternative minimum tax for the assessee other thancorporate assessee. The ld. AR then contended that incase of corporate assessee the books of accounts arerequired to be maintained as per the provisions ofCompanies Act whereas in case of other assessee whenthe books of account are not required to maintain asper companies Act then, it is not possible to estimatethe income in advance with a reasonable accuracy. Theld. AR has thus contended that the provisions of Section115JB cannot be compared with the provisions ofsection 115JC and therefore, the assessee cannot beexpected to pay the advance tax on the basis of booksprofits in terms of section 115JC. The ld. AR thencontended that the alternative minimum tax as per theprovisions of section 115JC is payable an adjusted totalincome and as such income is deemed to be totalincome. There is nothing under this provision requiringpayment of advance tax u/s 208 of the Act. Thus, in theentire chapter there is no a single word referring topayment of interest of any type leave aside section234B. The ld. AR has further contended that deemingprovisions create a legal fiction only for a definitepurpose and they are limited to that purpose only andshould not be extended beyond that unless it is clearlyand expressly provided. Therefore, it is not permissibleto impose the liability of supposition of law. In supportof his contention he has relied upon the followingdecisions:- (i) CIT vs. Elphinstone Sps & Wvg. Mills CoLtd 40 ITR 142 (SC) (ii) Balkrishnan Memon (MK) vs.ACED 83 ITR 162 (SC) (iii) CIT vs. Amarchand N Shroof 48 ITR 59 (SC) (iv) Executor & Trustees of Sir CawasjiJehangir Vs. CIT 35 ITR 537 (Bom) To sum up hisarguments, the ld. AR has submitted that the provisionsof section 115JC are introduced in the statute with thepurpose to tax the other persons in addition tocompanies paying zero tax. The purpose of this sectionis limited to pay tax as per this provision and cannotextend to other provisions of the Act. i.e. 208 or 234B.There is vast different in the payment of advance taxand that of alternative minimum tax. The Advance taxis levied on current income and payment is based onestimate where as AMT is based on book profit whichcan be arrived at only on finalization of accounts by theauditors. In such circumstances AMT cannot be paid inadvance tax and can be paid only after the end of thefinancial year that too on finalization of accounts.Therefore, it is patently wrong to apply advance taxprovisions on payment of AMT. He has furthercontended that in case advance tax is found in excessof regular tax the same is refunded on completion ofassessment u/s 143(1) or u/s 143(3). The excesspayment of advance tax is not carried forward to set offagainst tax liability of subsequent assessment yearswhereas in case of payment AMT the same is neverrefunded and as per the provision of section 115JD(4)the payment of AMT shall be carried forward for creditupto subsequently 10th assessment years. Further, incase of advance tax the Revenue is liable to payinterest u/s 244A(a) of the Act but no such refund isallowed on payment of AMT. Thus, the ld. AR hassubmitted that the assessee cannot be held liable foradvance tax section 208 on account of tax liability u/s115JC and consequently no interest can be levied u/s234B on such tax liability. 4. On the other hand, the ld. DR has submitted that theissue is covered by the decision of Hon’ble SupremeCourt in case of CIT vs. Rolta India Ltd. 330 ITR 470 aswell as decisions of Hon’ble Gujarat High Court in caseof JCIT vs. Sumit Industries Ltd. 54 taxmann.com 345and decision of Hon’ble Punjab and Haryana High Courtin case of CIT vs. Rana Sugars Ltd. 14 taxmann.com191. The ld. DR has also relied upon the orders of theld. CIT(A) and submitted that the ld. CIT(A) hasfollowed the decision of Hon’ble Supreme Court as wellas Hon’ble High Court while deciding this issue.” In view of concurrent findings, the appellant has retained theamount which is supposed to be paid under Section 115JC whichhas not been paid. In that view of the matter, the proviso of Section 234B hasbeen rightly invoked by the AO and confirmed by the CIT(A) andthe Tribunal. No substantial question of law arises. Hence, the appeals stand dismissed. (VIJAY KUMAR VYAS),J A.Sharma/1-2 (K.S.JHAVERI),J