The Commissioner Of Income Tax, Business Circle X, Chennai v. M/S.abdul Wahib & Co

IN THE HIGH COURT OF JUDICATURE AT MADRAS THE HONOURABLE MR. JUSTICE R. MAHADEVANAND THE HONOURABLE MR. JUSTICE MOHAMMED SHAFFIQ The Commissioner of Income Tax,Business Circle X,Chennai. .. Appellant/ AppellantVersus M/s.Abdul Wahib & Co.No.26/53, Vepery High Road,Periamet, Chennai-600 003. Appeals filed under Section 260 (A) of the the Income TaxAct, 1961 against the order of the Income Tax Appellate Tribunal“D” Bench, Chennai, dated 26.11.2010 in I.T.A.Nos.182/Mds/2010and 183/Mds/2010 respectively and against the order of IncomeTax, (Appeals) - IV, Chennai dated 16/12/2009 in Appeal No. CIT(A) - IV /CHE/2019/08-09 Assessment year 2002-2003, and againstthe order of the Assistant Commissioner of Income Tax, Circle X,Chennai 600 006 dated 28/03/2006, in PAN CIR AAAFT 0482 B. (Judgment of the court was made by MOHAMMED SHAFFIQ, J.) The short question that arises for consideration in theseTax Cases relates to the correctness of the levy of interestunder Section 234B of the Act, which arises consequent torestriction of deduction under Section 80HHC in terms of the Vthproviso to Section 80-HHC(3) which was introduced by anamendment brought in the year 2005 with retrospective effectfrom 01.04.1992. 2. The above question stands answered against the Revenue in relation to the very same assessee for the years 1998-99 and1999-2000 by order dated 22.06.2010 in T.C.A.Nos.396 and 398 of2010 wherein it was held by this Court that when the liabilityfor payment of additional tax itself was created for the firsttime on the basis of amendment in the year 2005, withretrospective effect from 01.04.1992, it would be incongruous toexpect the assessee to satisfy the requirement of payment ofadvance tax in terms of Section 234(B). It was further held thatthough the liability for additional tax by virtue of theamendment may be justified, however levy of interest for failureto pay advance tax in anticipation of such liability created onthe basis of an amendment made subsequently cannot be justified/countenanced. The following portion of the said order isrelevant and extracted below: When the liability for payment of additional taxitself was created for the first time, based on thesubsequent amendment, in the year 2005 withretrospective effect from 01.04.1992, it would beincongruent to expect the asses see to have satisfiedthe requirement of payment of advance tax asprescribed under Section 234(B) of the Income Tax Act.Therefore, while the liablity for additional tax byvirtue of the amendment was found to be satisfied bythe respondent/assessee, the payment of interest underSection 234(B) for failure to pay advance tax inanticipation of such liability created on a futureyear, based on an amendment, cannot be made. We aretherefore, convinced that the conclusion arrived at bythe C.I.T. (Appeals) as well as that of the Tribunalcannot be found fault with. We therefore do not findany scope to entertain these appeals. The substantialquestion of law raised in these tax case appeals areanswered in favour of the assessee. 3. Following the aforesaid judgment, the substantialquestions of law are answered against the Revenue and theseappeals filed by the appellant stand dismissed. No costs. //True Copy// Sub Assistant Registrar psa To: 1. The Commissioner of Income Tax, Business Circle X, Chennai. Business Circle X, Chennai. 2. Income Tax Appellate Tribunal “D” Bench, Chennai. Chennai. 3. The Commissioner of Income Tax, (Appeals) - IV, Chennai. (Appeals) - IV, Chennai. 4. The Assistant Commissioner of Income Tax, Circle X, Chennai 600 006. Circle X, Chennai 600 006. +1cc to Mr.T. Ravi kumar, Advocate, S.R.No.34765 TCA Nos.172 and 173 of 2011 NR(CO)CT/13/07/2022