COMMISSIONER OF INCOME TAX Vs. RANA SUGARS LTD.

JUDGEMENT

(1.) This order shall dispose of ITA Nos. 250 of 2004 and 111 of 2005 as, according to the learned counsel, identical question of law is involved therein. For brevity, the facts are being extracted from ITA No. 250 of 2004. This appeal has been preferred by the revenue under section 260A of the Income Tax Act, 1961 (in short "the Act") against the order dated 13-2-2004 passed by the Income Tax Appellate Tribunal, Chandigarh Bench "B", Chandigarh (hereinafter referred to as "the Tribunal") in ITA No. 333/CHANDI/99, for the assessment year 1997-98, raising the following substantial question of law:-

(2.) Briefly stated, the facts necessary for adjudication as narrated in the appeal are that the assessee filed its return on 30-11-1997 for the assessment year 1997-98 declaring loss of Rs. 85,76,500. However, an income of Rs. 60,44,810 was computed under section 115JA of the Act. The tax due from the assessee was calculated to be Rs. 26,17,917 including the additional tax under section 143(1A) of Rs. 18,648. The assessee had not paid any advance tax except TDS of Rs. 1,19,130/-. However, the assessee had paid Rs. 25,99,269/- under section 140-A of the Act on 29.11.1997 under self assessment scheme. The case was processed under section 143(1)(a) of the Act on 29.6.1998 and demand of Rs. 4,14,976/- under section 234B of the Act and Rs. 1,78,958/- under section 234C of the Act was created on account of interest. The assessee filed an application under section 154 of the Act on 27.7.1998 for rectification on the issue of charge of interest along with other issues. The prayer for rectification on the issue of charging of interest was declined whereas relief was allowed on other issue. Accordingly, the interest charged under Sections 234B and 234C of the Act was reduced. The case was taken up for scrutiny and the assessment was completed under section 143(3) of the Act on the same income. Feeling aggrieved, the assessee filed an appeal before the Commissioner of Income Tax (Appeals) [in short "the CIT(A)"]. The CIT(A) vide order dated 17.2.1998 allowed the appeal and deleted the interest under Sections 234B and 234C of the Act holding that the assessee was not liable to pay advance tax on deemed income. Feeling dissatisfied, the department filed an appeal before the Tribunal who vide order dated 13.2.2004 upheld the order of the CIT(A) following the earlier decision of the Tribunal dated 18.11.2002 in IT Appeal Nos. 284 and 285 (Chad.) of 2000 (Dy. CIT v. Upper India Steel Ltd.). Hence, the present appeal by the revenue.

(3.) We have heard learned counsel for the revenue.