Ramachandran Nair, J v. Jindal Exports Ltd.,(2009) 314 I.t.r. 137 (Del.), Followed By The Madras High Courtreported In Cit V. Chemplast Sanmar Ltd.,(2009) 314 I.t.r

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE V.K.MOHANAN WEDNESDAY, THE 18TH NOVEMBER 2009 / 27TH KARTHIKA 1931 ITA.No. 353 of 2009() --------------------- ITA.250/COCH/2003 of I.T.A.TRIBUNAL,COCHIN BENCH .................... APPELLANT: ------------------------------ THE COMMISSIONER OF INCOME TAX, COCHIN. BY ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT(S): --------------- M/S.SYNTHITE INDUSTRIAL CHEMICALS LTD., AJAY VIHAR, M.G.ROAD, COCHIN. ADV. SRI.P.BALAKRISHNAN (E) THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 18/11/2009, ALONG WITH ITA 1226 OF 2009 THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C .N. RAMACHANDRAN NAIR &V.K. MOHANAN, JJ. -------------------------------------------- I. T. A. No. 353 & 1226 OF 2009 -------------------------------------------- Dated this the 18th day of November, 2009 JUDGMENT Ramachandran Nair, J. The only question raised is whether the Tribunal was justified inholding that the respondents were entitled to seek for set off of creditavailable in the previous year's assessment completed under Section115JAA against assessed tax for the purpose of determination ofinterest liability under Section 234B and Section 234C of the I.T. Act.In fact, in the course of completion of assessment, the assessing officerallowed set off and worked the interest under Sections 234B and C onthe net deficiency. However, the Commissioner in exercise of suomotu revisional power under Section 263 cancelled the assessmentagainst the assessees filed appeals before the Tribunal. We notice thatsubsequent to the order issued by the Tribunal, there has been adecision of the Delhi High Court in CIT V. JINDAL EXPORTS LTD.,(2009) 314 I.T.R. 137 (Del.), followed by the Madras High Courtreported in CIT V. CHEMPLAST SANMAR LTD.,(2009) 314 I.T.R. 231, which are rendered based on later amendment introduced toSection 234B by Finance Act 2006 with effect from 1.4.2007. It isseen that corresponding amendment is made to Section 234A also, sothat credit available can be set off against liability to pay tax underSection 140A along with return. Even though amended provisionwhich authorises set off of credit available under Section 115JAA isnot retrospective, the Delhi High Court has held that the provision isonly clarificatory in nature. Standing counsel contended that theprovision introduced is substantive and is expressly made prospective.However, we are unable to accept this contention for the simple reasonthat such an interpretation will cause heavy hardship to the partiesbecause if credit is available for adjusting against tax liability, we seeno reason why it should not be permitted to be set off against taxliability before determination of liability for interest due under Sections234B and C. There is also no express bar against assessees reckoningthe credit available under Section 115JAA while making payment ofadvance tax. We therefore find no ground to deviate from the view ofthe Delhi and Madras High Courts in the decisions above referred. 3 Consequently taking the view that the amended provision isclarificatory in nature, we dismiss the two appeals filed by thedepartment. (C.N.RAMACHANDRAN NAIR)Judge. (V.K. MOHANAN) Judge. kk