Jindal Thermal Power Co. Ltd. v. Deputy CIT & Anr.

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The Tax Publishers2006 TaxPub(DT) 1550 (Karn-HC) : (2006) 012 (I) ITCL 0305 : (2006) 286 ITR 0182 : (2006) 203 CTR 0381 : (2006) 154 TAXMAN 0547 Jindal Thermal Power Co. Ltd. v. Dy. CIT & Anr. INCOME TAX ACT, 1961 MAT- Book profit under section 115JB-Failure to pay advance tax-Liability of interest under section 234A and 234B Assessee-company did not pay advance tax for the relevant assessment years. Dy. CIT levied interest upon the assessee under sections 234B and 234C for said default in payment of advance tax. The assessee submitted that liability to pay advance tax arose only in view of the provisions of amendment of section 115JB(1) made retrospective with effect from 1-4-2001 and as on 1-4-2001, the assessee was not liable to pay advance tax. It also submitted that the retrospective operation of section 115JB(1) with effect from 1-4-2001 was unreasonable, excessive, harsh and was unconstitutional. As per the Dy. CIT amendment of section 115JB was only clarificatory and Circular No. 13/2001, dated 9-11-2001 had already been issued by the CBDT, clarifying the position that after amendment of section 115JB, the assessee was liable to pay advance tax, therefore, the retrospective operation would not be in any way said to be unreasonable, harsh or excessive. *Held:The CBDT Circular No. 13/2001 was issued on 9-11-2001, regarding the liability for payment of advance tax under the new Minimum Alternate Tax (MAT) provisions of section 115JB and it was abundantly made clear in the said Circular that the new provisions of section 115JB is a self-contained Code. In other words, except for substitution of tax payable under the provision and the manner of computation of book profits, all the provisions of the Act, including the provision relating to charge, definitions, recoveries, payment, assessment, etc., would apply in respect of the provisions of this section and in view of the scheme of the Act. The submission of the assessee that liability to pay tax arose only in view of the provisions of amendment of section 115JB(1) made retrospective with effect from 1-4-2001 and as on 1-4-2001, the assessee was not liable to pay advance tax, could not be accepted and the retrospective operation of section 115JB(1) with effect from 1-4-2001 could not at all be said to be unreasonable, excessive or harsh, so as be to declare it as unconstitutional. Income Tax Act, 1961* Section 115JB read with sections 234B and 234C Case Law Analysis:Referred:Kwality Biscuits Ltd. v. CIT[2000] 243 ITR 519 / 110 Taxman 47 (Kar.) [Para 4], National Agrl. Co-operative Marketing Federation of India Ltd. v. Union of India [2003] 260 ITR 548 / 128 Taxman361 (SC) [Para 7], Star India (P.) Ltd. v. CCE [2006] 280 ITR 321/ 150 Taxman 128 (SC) [Para 7] and Dr. S. Reddappa v. Union of India [1998] 232 ITR 62 (Kar.) [Para 8]. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers2006 TaxPub(DT) 1550 (Karn-HC) : (2006) 012 (I) ITCL 0305 : (2006) 286 ITR 0182 : (2006) 203 CTR 0381 : (2006) 154 TAXMAN 0547

Jindal Thermal Power Co. Ltd. v. Dy. CIT & Anr.

INCOME TAX ACT, 1961

MAT- Book profit under section 115JB-Failure to pay advance tax-Liability of interest under section 234A and 234B

Assessee-company did not pay advance tax for the relevant assessment years. Dy. CIT levied interest upon the assessee under sections 234B and 234C for said default in payment of advance tax. The assessee submitted that liability to pay advance tax arose only in view of the provisions of amendment of section 115JB(1) made retrospective with effect from 1-4-2001 and as on 1-4-2001, the assessee was not liable to pay advance tax. It also submitted that the retrospective operation of section 115JB(1) with effect from 1-4-2001 was unreasonable, excessive, harsh and was unconstitutional. As per the Dy. CIT amendment of section 115JB was only clarificatory and Circular No. 13/2001, dated 9-11-2001 had already been issued by the CBDT, clarifying the position that after amendment of section 115JB, the assessee was liable to pay advance tax, therefore, the retrospective operation would not be in any way said to be unreasonable, harsh or excessive. Held:The CBDT Circular No. 13/2001 was issued on 9-11-2001, regarding the liability for payment of advance tax under the new Minimum Alternate Tax (MAT) provisions of section 115JB and it was abundantly made clear in the said Circular that the new provisions of section 115JB is a self-contained Code. In other words, except for substitution of tax payable under the provision and the manner of computation of book profits, all the provisions of the Act, including the provision relating to charge, definitions, recoveries, payment, assessment, etc., would apply in respect of the provisions of this section and in view of the scheme of the Act. The submission of the assessee that liability to pay tax arose only in view of the provisions of amendment of section 115JB(1) made retrospective with effect from 1-4-2001 and as on 1-4-2001, the assessee was not liable to pay advance tax, could not be accepted and the retrospective operation of section 115JB(1) with effect from 1-4-2001 could not at all be said to be unreasonable, excessive or harsh, so as be to declare it as unconstitutional.

Income Tax Act, 1961 Section 115JB read with sections 234B and 234C

Case Law Analysis:Referred:Kwality Biscuits Ltd. v. CIT[2000] 243 ITR 519 / 110 Taxman 47 (Kar.) [Para 4], National Agrl. Co-operative Marketing Federation of India Ltd. v. Union of India [2003] 260 ITR 548 / 128 Taxman361 (SC) [Para 7], Star India (P.) Ltd. v. CCE [2006] 280 ITR 321/ 150 Taxman 128 (SC) [Para 7] and Dr. S. Reddappa v. Union of India [1998] 232 ITR 62 (Kar.) [Para 8].