IN RE: Y. LTD. Vs. STATE

JUDGEMENT

(1.) THE business of the applicant -company is to make, hold and manage investments. In India the business of the company constituted holding of shares and debentures in an Indian Company. The applicant sold its shares and debentures of the said company in India in January 1994 and earned the following income under the heads : Capital gains xx,xx,xx,xxx Dividend xx,xx,xx,xxx and Interest xx,xx,xxx (Total Rs. 28 crores). On account of these transactions the applicant was liable to pay advance tax amounting to xx,xx,xx,xxx on or before 15 -3 -1994. The applicant has stated that it issued instructions to its Chartered Accountants to pay the advance tax before 15 -3 -1994 and sent a cheque bearing the date of 10 -3 -1994 for advance tax xx,xx,xx,xxx drawn on Bank of XYZ, Bombay and made payable to ABC Bank, Bombay. It is stated, however, that the cheque was received by the applicant's CAs on 15 -3 -1994, who deposited it with the ABC Bank Main Branch, with income -tax challan, on the same date. Thereafter, a messenger of the applicant's CAs is said to have visited the main branch of the ABC on 30 -3 -1994 for collecting the challan when he was told that the challan was not ready. Another messenger visited ABC on 6 -4 -1994 when he was informed that the cheque had been returned unpaid by the XYZ Bombay. Thereupon, a higher employee of the CA's visited the Bank and was told that the cheque had been returned with the endorsement: 'Advice not received. Please present after two days'. The CA's representative was told that the ABC was not obliged, nor was it their practice, to represent unpaid cheques. Therefore, the returned cheque and the accompanying challan were returned to the CA's representative in 1994. It is stated that a representative of the applicant's CAs contacted the XYZ Bombay on 7 -4 -1994 to ascertain whether they could contact the ABC and persuade them to represent the cheques. He was told that it was not possible. On 7th April, he collected the cheque from the ABC Bombay. Efforts were made again on 12th and 13th April to persuade the ABC to re -present the cheque but the ABC informed them that it was not their practice to represent dishonoured cheques and that they would require fresh challans, etc., if the amount is to be paid in again. It is also stated that there were some discussions between the officials of the ABC and XYZ Bombay and the Deputy Controller of Accounts, the Central Board of Direct Taxes (CBDT). Then it was decided that the ABC's procedure has to be followed and only a representation could be made to the concerned Commissioner for redressed, if any'. Thereafter, the applicant presented the returned cheque together with a fresh challan to the ABC on 15 -4 -1994. This fact is not in K's affidavit. So it is set out later. These facts have been stated in an affidavit of Mr. K., an employee of the CAs of the applicant, acting under authorisation from the applicant. The cheque was honoured by XYZ on its presentation the next day and a receipted challans dated 16 -4 -1994 was issued to the applicant.

(2.) LATER , the applicant made an application before the Commissioner on 18 -4 -1994, requesting him to 'confirm' that the applicants are not liable to pay any interest in terms of section 234B and/or section 234C of the Income -tax Act, 1961 (the Act). The Commissioner intimated the CAs vide his letter dated 20 -4 -1994 that there is no provision in the Act to treat the payment made after the end of the relevant financial year as advance tax payment before 31st March. Therefore, the provisions regarding charge of interest would squarely be applicable. After receipt of this letter, the applicant filed this application before us on 10 -11 -1994 seeking advance ruling on the following question :

(3.) THE Commissioner submitted that the application was not maintainable because there was no transaction peculiar to the case of the applicant on which advance ruling can be given as the question of chargeability of interest under this section involved the principal question whether payment of advance tax after the end of the financial year is to be deemed to be advance tax in the circumstances stated by the applicant. This is essentially a question of law which is evident from the fact that the applicant has cited a number of Courts' decisions in support of his interpretation. According to the Commissioner, any ruling on the question posed by the applicant will be of general application to all such cases and the authority was not constituted to handle the questions of law which are of general applicability to all persons.