THE COMMISSIONER OF INCOME TAX AND THE ASSISTANT COMMISSIONER OF INCOME-TAX Vs. SAMSON DISTILLERIES PVT LTD

JUDGEMENT

(1.) This appeal by the Revenue arises out of the impugned order dated 23rd Nov. 2006 passed in I.T.A. No. 3/ Bang/2007 by the Income Tax Appellate Tribunal, Bangalore Bench 'A', for consideration of the following substantial questions of law:

(2.) The facts in brief are that, the assessee has been carrying on the business of manufacture of industrial alcohol, Indian made liquors and allied products. The assessee filed return of income, declaring 'nil' income and Minimum Alternative Tax (MAT) income of Rs. 30,76,960.00. The return of income was processed under Sec. 143(1) of the Act on 30th March 2001. Thereafterwards, a rectification order under Sec. 154 came to be passed on 16th July 2004 charging interest under Sections 234B and 234C. Subsequently, notice under Sec. 148 came to be issued to the assessee and thereafter the assessment was re-opened and taken up for scrutiny. After hearing the assessee, the Assessing Officer passed an order dated 14th March 2005, determining deemed income under Sec. 115JA at Rs. 30,76,960.00 and tax was demanded under Sec. 115JA at Rs. 30,76,960.00 thereon together with interest under Sections 234B and 234C of the Act. Aggrieved by the same, the assessee filed an appeal before the Commissioner of Income Tax (Appeals), the first appellate authority, in I.T.A. No. 57/CIT(A)/DVG/2004-05, contending that under corresponding Sec. 115J, interest on the income determined under MAT cannot be levied. The first appellate authority, by its order dated 23rd Sept. 2004, dismissed the appeal, holding that the Assessing Officer is justified in distinguishing the case of Kwality Biscuits Ltd. case, 253 ITR 519 and thus the assessee ought to have paid advance tax relevant to assessment year 2000-01 even on the tax liability under Sec. 115JA and failure to do so would attract levy of interest under Sections 234B and 234C. Assailing the correctness of the said order passed by the first appellate authority, the assessee herein filed an appeal before the Income Tax Appeal Tribunal, Bangalore Bench 'A' (for short "Tribunal") in I.T.A. No. 3/Bang/2007 for the assessment year 2000-01. The said matter came up for consideration before the Tribunal and the Tribunal allowed the appeal, holding that interest under Sec. 234B of the Act is not leviable in the case of assessee. Being aggrieved by the said order passed by Tribunal, the Revenue is in appeal before this Court, to consider the aforesaid substantial questions of law.

(3.) We have heard learned Counsel appearing for Revenue as well as the learned Counsel appearing for the respondent - Assessee, for quite sometime.