Section 234C

Last updated: 24 September 2007

Court :
IN THE ITAT, LUCKNOW BENCH ‘B’

Brief :
Section 234C read with section 115JA of the Income-tax Act, 1961 - Interest - Chargeable as - Assessment year 1997-98 - Assessing Officer, during minimum alternative tax assessment under section 115JA, for deferment of payment of advance tax levied interest under section 234C upon assessee - Whether since in view of provisions of sub-section (4) of section 115JA provisions of sections 207 to 210 relating to computation of advance tax would be applicable to computation of income under section 115JA, assessee was liable to pay interest under section 234C for deferment of payment of advance tax - Held, yes FACTS The Assessing Officer, during the course of minimum alternative tax assessment under 115JA, for deferment of payment of advance tax levied the interest under section 234C upon the assessee. On appeal, the Commissioner (Appeals) upheld the impugned order. On second appeal, the assessee contended that in view of the decision of the Supreme Court in the case of CIT v. Quality Biscuit Co. (2006) 284 ITR 434 it was not liable to pay interest under section 234C and, therefore, the issue be decided in its favour. The revenue, on the other hand, contended that the decision of the Supreme Court in the case of CIT v. Quality Biscuit Co. (supra) was given on the provisions of section 115J; whereas in the instant case the interest was being charged during the assessment under section 115JA, which was materially different.

Citation :
PRADESHIYA INDUSTRIAL & INVESTMENT CORPN OF U. P. LTD. v. ADDITIONAL COMMISSIONER OF INCOME-TAX, SP RANGE I, LUCKNOW H. L. KARWA, JUDICIAL MEMBER AND D. C. AGRAWAL, ACCOUNTANT MEMBER IT APPEAL NO. 428 (LUC.) of 2004 [ASSESSMENT YEAR 1997-98]

Under the provision of section 115JA, there is sub-section (4) which provides that “Save as otherwise provided in this section, all other provisions of this Act shall apply to every assessee, being a company, mentioned in this section”. Further, the provisions of sub-section (5) of section 115JB are pari material with the provisions of sub-section (4) of section 115JA. Sub-section (4) of section 115JA and sub-section (5) of section 115JB clearly provide that the provisions of the Act would be applicable to the computation of income under these sections unless otherwise so provided therein. As no contrary view is provided in these sections, the provisions of sections 207 to 210 relating to computation of advance tax would be applicable to the computation of income under sections 115JA and 115JB and, therefore, for non payment of advance tax and deferment thereof, interest under section 234B or 234C, as the case may be, would be chargeable. The decision of the Supreme Court in the case of Quality Biscuit (supra), relied upon by the assessee, was admittedly given in the context of section 115J, which did not contain the provisions similar to sub-section (4) of section 115JA. Therefore, this decision did not create a binding precedence. Therefore, the decision of the Supreme Court in the case of Quality Biscuit (supra) would not be applicable for computation of income under section 115JA/115B in view of changed statutory provisions of those sections. Therefore, the assessee was liable to pay interest under section 234C for deferment of payment of advance tax. Therefore, the impugned order was to be upheld. [Para 6]