Wa/972/2015 Of The Fertilizers & Chemicals Travancore Ltd v. The Deputy Commissioner Of Income Tax

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE P.N.RAVINDRAN & THE HONOURABLE MR. JUSTICE A.MUHAMED MUSTAQUE MONDAY, THE 11TH DAY OF JULY 2016/20TH ASHADHA, 1938 WA.No. 972 of 2015 -------------------------------- AGAINST THE JUDGMENT IN W.P(C).NO. 2791/2007, DATED 16-01-2015 ------------------ APPELLANT(S)/PETITIONER IN THE W.P(C) : ------------------------------------------------------------------ THE FERTILIZERS & CHEMICALS TRAVANCORE LTD., UDYOGAMANDAL, COCHIN 683 501, REPRESENTED BY ITS DEPUTY CHIEF MANAGER(FINANCE), A.R.GEORGE SATISH. BY ADVS. SRI.M.GOPIKRISHNAN NAMBIAR SRI.P.GOPINATH SRI.P.BENNY THOMAS SRI.K.JOHN MATHAI SRI.JOSON MANAVALAN SRI.KURYAN THOMAS RESPONDENT(S)/RESPONDENTS IN W.P(C) : ------------------------------------------------------------------- 1. THE DEPUTY COMMISSIONER OF INCOME TAX (ASSMT.). SPECIAL RANGE 2, ERNAKULAM 682 015. 2. THE CHIEF COMMISSIONER OF INCOME TAX, KOCHI- 682 018. BY SRI.P.K.R.MENON (SENIOR ADVOCATE) ADV. SRI.JOSE JOSEPH, S.C THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 11-07-2016, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: Msd. P.N.RAVINDRAN & A.MUHAMED MUSTAQUE, JJ.~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ W.A.No.972 of 2015 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Dated this the 11[th ]day of July, 2016 J U D G M E N T P.N.Ravindran, J. The appellant is the petitioner in W.P.(C).No.2791 of 2007.The appellant had in the writ petition prayed for setting asideExt.P4 order passed by the Chief Commissioner of Income Tax,Kochi. Such a relief was sought on the averment that whileissuing the impugned order, the second respondent failed to takenote of the fact that advance tax on a book profit under section115J of the Income Tax Act, 1961 can never be paid in time asbook profit can be determined only after the accounts of theprevious years are closed. It was contended that such being thesituation, demand of interest under section 234C of the IncomeTax Act, 1961 was beyond the scope of the Income Tax Act. 2.The learned Single Judge after considering the rivalcontentions held that as the appellant does not satisfy the threeconditions stipulated in the notification dated 26.6.2006 issuedby the Central Board of Direct Taxes, the appellant cannot W.A.No.972 of 2015 -:2:- successfully challenge Ext.P4 order. The writ petition wasaccordingly dismissed. Hence, this writ appeal. 3.We heard Sri. Kuryan Thomas, learned counselappearing for the appellant and Sri.Jose Joseph, learned StandingCounsel appearing for the respondents. We have also gonethrough the impugned orders as also the impugned judgment. Itis not in dispute that the order of assessment for the assessmentyear 1990-91 has attained finality. The first respondent, theassessing authority had while completing the assessment leviedinterest under section 234C of the Income Tax Act, 1961 on theground that there was shortfall in payment of advance tax.Though the appellant challenged the said assessment orderbefore the appellate authority, levy of interest was upheld by theappellate authority. The said order was confirmed by the IncomeTax Appellate Tribunal. It was thereafter that the appellant fileda petition before the second respondent seeking waiver of theinterest levied under section 234C of the Income Tax Act, 1961.The second respondent rejected the said application on theground that the requisite conditions for grant of waiver stipulated -:3:- -:3:- in the notification dated 26.6.2006 issued by the Central Board ofDirect Taxes are not satisfied in the case in hand. The learnedsingle Judge after considering the rival contentions held that theappellant does not fall within the two classes of cases referred toin the circular dated 26.6.2006. The appellant has no case that itwill fall within the clauses (b) and (c) of the aforesaid circularwhich alone are relevant in the case on hand. Its contention isthat levy of interest under section 234C of the Income Tax Act,1961 is beyond the scope of the Act in the sense that it was notpractically possible to determine the book profit in the course ofthe financial year. That is an issue which did not find favour withthe appellate authority or the Income Tax Appellate Tribunalwhich upheld the order levying interest under section 234C of theIncome Tax Act, 1961. Though it was contended before us thatthe appellant’s case will fall within clause (b) of the notificationdated 26.6.2006, we find no merit in the said contention as well.Even assuming for the sake of arguments that income other thanunder the head capital gains was received or it had accrued afterthe due date of payment of the first or subsequent instalment of -:4:- advance tax, and it was neither anticipated nor contemplated inthe assessment, as the advance tax on such income was not paidin the remaining instalment or instalments, the appellant cannotclaim the benefit of clause (b). For invoking clause (b) of thesaid notification the appellant has to satisfy two conditions.Satisfying one of the conditions alone will not enable theappellant to claim the benefit of the said notification. Thelearned single Judge was therefore perfectly right in repelling thechallenge to Ext.P4. For the reasons stated above, we hold that there is no meritin the instant appeal. It fails and is accordingly dismissed. Nocosts. Sd/- P.N.RAVINDRAN, JUDGE Sd/- ms A.MUHAMED MUSTAQUE, JUDGE