Interest under sec 234B and 234C is payable for failure to advance tax in respect of tax payable under sec 115JA/115JB

IN THE INCOME TAX APPELLATE TRIBUNAL

DELHI BENCH: B: NEW DELHI

BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT

AND

SHRI I.P. BANSAL, JUDICIAL MEMBER

ITA No.635/Del/2012

Assessment Year: 2002-03

Central Warehousing

Corporation,

Warehousing Bhawan,

4/1, Siri Institutional Area,

August Kranti Bhawan,

Hauz Khas,

New Delhi.

PAN: AAACC1206D

(Appellant)

Vs.

ACIT (OSD),

CIT-I,

CR Building, IP Estate,

New Delhi.

 (Respondent)

Assessee by: Prof. S. Sampath, CA

Revenue by: Shri Surender Pal, Sr. DR

ORDER

PER I.P. BANSAL, JUDICIAL MEMBER

This is an appeal filed by the assessee. It is directed against the order passed by the CIT (A) dated 7th December, 2011 for Assessment Year 2002-03.

2. At the outset, it was pointed out by the learned AR that only one issue is raised in the present appeal which is regarding disallowance made u/s 14A read with Rule 8D of IT Rules, 1962. The Assessing Officer has made disallowance u/s 14A with reference to Rule 8D of ` 28,20,693/- and learned CIT (A) has upheld the disallowance made by the Assessing Officer. It is the submission or the learned AR that the matter should be restored back to the file of Assessing Officer with a direction to re-determine the disallowance as per the decision of Hon’ble Delhi High Court in the case of Maxopp Investment Limited vs. CIT 247 CTR 162 (Del). He submitted that admittedly Rule 8D has been held to have no retrospective effect, hence, will not be applicable for the assessment year under consideration.

3. On the other hand, the learned DR relied upon the order of Assessing Officer and CIT (A).

4. We have carefully considered the rival submissions in the light of the material placed before us. We find that there is a force in the claim of the learned AR that Rule 8D is not applicable to the impugned assessment year, hence, the matter has to be reconsidered in the light of the aforementioned decision of Hon’ble Delhi High Court in the case of Maxopp Investment Limited vs. CIT (supra) as the said decision of Hon’ble Delhi High Court was not available when learned CIT (A) has decided the issue. We, therefore, restore this issue to the file of Assessing Officer for re-determination of the disallowance u/s 14A. We direct accordingly. This issue of disallowance u/s 14A is considered to be allowed for statistical purposes in the manner aforesaid.

5. Though the learned AR has not raised any argument in respect of ground Nos.7 and 8 which relate to leviability or otherwise of interest u/s 234B in respect of assessment made under the provisions of Section 115JB, these grounds are reproduced below:-

“7. It is contended that interest of Section 234B is not chargeable when the Appellant is subjected to MAT under section 115JB as decided by the Hon’ble Supreme Court Kwality Biscuits Ltd.

8. It is contended that CIT (Appeals) had erred in coming to the conclusion that charge of interest is mandatory and consequential in nature.”

6. We find that this issue is now covered by the decision of Hon’ble Supreme Court in the case of JCIT vs. Rolta India Ltd. 330 ITR 470 (SC) wherein it has been held that interest u/s 234B and 234C shall be payable for failure to pay advance tax in respect of tax payable u/s 115JA/115JB. Therefore, we hold that learned CIT (A) has rightly decided that interest is leviable u/s 234B in respect of income computed u/s 115JB. However, ld. Assessing Officer is directed to recomputed that interest on the income which remains finally assessable after giving effect to this order. We direct accordingly.

7. In the result, the appeal filed by the assessee is partly allowed for statistical purposes in the manner aforesaid.

The order pronounced in the open court on 13.04.2012.

                                                             Sd/-                        Sd/-

                                              [G.D. AGRAWAL]       [I.P. BANSAL]

                                              VICE PRESIDENT   JUDICIAL MEMBER

Dated, 13.04.2012.

dk

Copy forwarded to: -

1. Appellant

2. Respondent

3. CIT

4. CIT (A)

5. DR, ITAT

Deputy Registrar,

ITAT, Delhi Benches