M/s Navayuga Engineering Company Limited, Hyderabad v. DCIT, Hyderabad

ITA 1062/HYD/2009 | 2006-2007
Pronouncement Date: 14-12-2011 | Result: Dismissed

Appeal Details

RSA Number 106222514 RSA 2009
Assessee PAN AAACN7396R
Bench Hyderabad
Appeal Number ITA 1062/HYD/2009
Duration Of Justice 2 year(s) 1 month(s) 19 day(s)
Appellant M/s Navayuga Engineering Company Limited, Hyderabad
Respondent DCIT, Hyderabad
Appeal Type Income Tax Appeal
Pronouncement Date 14-12-2011
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 14-12-2011
Date Of Final Hearing 20-07-2011
Next Hearing Date 20-07-2011
Assessment Year 2006-2007
Appeal Filed On 26-10-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B' HYDERABAD BEFORE SHRI CHANDRA POOJARI ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN JUDICIAL MEMBER I .T.A. NO. 1062/HYD/2009 (ASSESSMENT YEAR : 2006-07) M/S. NAVAYUGA ENGINEERING COMPANY LTD. VISAKHAPATNAM PAN: AAACN7396R VS. DY. COMMISSIONER OF INCOME- TAX CENTRAL CIRCLE-1 HYDERABAD APPELLANT RESPONDENT APPELLANT BY: SHRI V. RAGHAVENDRA RAO RESPONDENT BY: SMT. SUBHASREE ANANTHA RAMA KRISHNAN DATE OF HEARING: 09.11.2011 DATE OF PRONOUNCEMENT: 14.12.2011 O R D E R PER CHANDRA POOJARI AM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT(A)-I HYDERABAD DATED 20 TH AUGUST 2009 FOR THE ASSESSMENT YEAR 2006-07. 2. THE ASSESSEE RAISED THE FOLLOWING GROUNDS OF APP EAL: '2. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACT S IN SUSTAINING THE INTEREST CHARGED OF RS. 2 13 98 072/- U/S. 234B AND RS. 76 44 765/- U/S. 234C OF THE IT ACT. 3. THE LEARNED CIT(A) HAS ERRED IN LAW IN HOLDING THAT THE DECISION OF THE SUPREME COURT IN THE CASE OF CIT VS. ANJUM M .H. GHASWALA (252 ITR 1) APPLIES TO THE FACTS OF THE CASE. 4. THE LEARNED CIT(A) HAS FAILED TO APPRECIATE THA T THE PROVISIONS OF SEC. 234B & 234C COME INTO PLAY ONLY IF THERE EX ISTED ADVANCE TAX LIABILITY U/S. 208 OF THE IT ACT. 5. ADVANCE TAX LIABILITY U/S. 208 R.W.S. 207 ARISES ONLY IF THE 'CURRENT INCOME' AND NOT THE ASSESSED INCOME SUBJECT TO ADVA NCE TAX LIABILITY. THERE EXISTED NO ADVANCE TAX LIABILITY AS THE TAX ON 'CURRENT INCOME' IS FULLY COVERED BY TDS. 6. THE LEARNED CIT(A) HAS OMITTED TO CONSIDER THE F ACT THAT THE LIABILITY TO THE ADVANCE TAX AROSE ONLY ON ACCOUNT OF THE INSERTION OF EXPLANATION U/S. 80IA OF THE IT ACT INSERTED BY FIN ANCE ACT 2007 AFTER THE END OF THE INSTANT PREVIOUS YEAR. I.T.A. NO. 1062/HYD/2009 M/S. NAVAYUGA ENGINEERING CO. LTD. =========================== 2 7. THE LEARNED CIT(A) HAS ERRED IN MECHANICALLY CON CURRING WITH THE CONCLUSIONS OF THE ASSESSING OFFICER THAT THE C ASE LAW CITED WAS DISTINGUISHABLE. 8. FOR THESE AND ANY OTHER GROUNDS THAT MAY BE URGE D AT/BEFORE THE DATE OF HEARING IT IS PRAYED THAT THE INTEREST CHAR GED U/S. 234B AND 234C BE DELETED.' 3. BRIEF FACTS OF THE ISSUE ARE THAT THE ASSESSEE-COMP ANY IN THE BUSINESS OF CONSTRUCTION AND LAYING OF FOUNDATIONS MARINE STRUCTURES LIKE BERTHS WHARF JETTIES ETC. HAD FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER CONSIDERATION ON 29.11.2006 ADMITTING A TAXABLE INCOME OF RS. 70 79 89 930 UNDER THE NORMAL PROVISIONS OF THE ACT . CONSEQUENT TO A SEARCH OPERATION CONDUCTED U/S. 132 OF THE I.T. ACT IN THE GROUP CASES INCLUDING THE ASSESSEE-COMPANY THE ASSESSEE FILED THE RETURN OF INCOME IN RESPONSE TO THE NOTICE U/S. 153A OF THE ACT ADMITTI NG TAXABLE INCOME OF RS. 78 47 78 111. THE INCOME RETURNED INCLUDED THE ADD ITIONAL INCOME OF RS. 7 67 88 183 OFFERED DURING THE COURSE OF SEARCH. I N COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAD REMITTED THE EMPLOYEE'S CONTRIBUTION TO PF FOR THE MONTH OF MARCH 2006 AMOUNTING TO RS. 6 95 232 ON 28.4.2006. ACCORDINGLY HE DISAL LOWED THE SAME AND ADDED BACK TOTHE RETURNED INCOME. THE ASSESSING OF FICER ALSO REJECTED THE CLAIM OF THE ASSESSEE NOT TO CHARGE INTEREST U/S. 2 34B AND 234C AFTER CONSIDERING THE EXPLANATION OF THE ASSESSEE. THE I NCOME WAS COMPUTED AT RS. 78 54 73 343 AND A TAX DEMAND OF RS. 1 83 36 21 6 INCLUDING INTEREST U/S. 234B AND 234C WAS RAISED. 3.1 THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A). BEF ORE THE CIT(A) THE ASSESSEE CONTENDED THAT IT IS NOT LIABLE TO CHA RGE OF INTEREST U/S. 234B AND 234C SINCE THE TAX PAYABLE ON THE INCOME ORIGIN ALLY RETURNED WAS ADEQUATELY COVERED BY THE TDS MADE AND THERE DID NO T EXIST ANY LIABILITY TO PAY ADVANCE TAX. THE INCOME GOT INCREASED DUE TO C LARIFICATORY EXPLANATION U/S. 80IA ENACTED BY THE FINANCE ACT 2007 DUE TO W HICH THE ASSESSEE BECAME LIABLE TO HIGHER INCOME BY DENIAL OF THE EXE MPTION U/S. 80IA OF THE ACT. HOWEVER THE CIT(A) PLACED RELIANCE ON THE JU DGEMENT OF SUPREME COURT IN THE CASE OF CIT VS. ANJUM GHASWALA (252 IT R 1) AND CONFIRMED I.T.A. NO. 1062/HYD/2009 M/S. NAVAYUGA ENGINEERING CO. LTD. =========================== 3 THE ORDER OF THE ASSESSING OFFICER. AGAINST THIS THE ASSESSEE IS IN APPEAL BEFORE US. 4. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LEARNED CIT(A) HAD ERRED IN SUSTAINING THE INTEREST CHARGED OF RS. 2 13 98 072 U/S. 234B AND RS. 76 44 765 U/S. 234C OF THE ACT. HE SUBMITTED THAT THE DECISION OF SUPREME COURT RELIED ON BY THE CIT(A) IN THE CASE CIT VS. ANJUM M.H. GHASWALA (252 ITR 1) IS FAR WIDE OF THE MARK WHEREIN THE COURT WAS CONSIDER ING THE POWERS OF THE SETTLEMENT COMMISSION TO REDUCE OR WAIVE INTEREST U /S. 234B OF THE IT ACT WHEREIN THE SUPREME COURT HELD THAT THE SETTLEMENT COMMISSION HAS NO POWER TO REDUCE OR WAIVE THE INTEREST U/S. 234B OF THE IT AC T AS SECTION 234B IS MANDATORY UNLIKE THE CORRESPONDING EARLIER PROVISIONS. THE S UPREME COURT HAD OBSERVED THAT U/S. 234B THE WORD USED IN THE PROVISION IS 'S HALL' AS AGAINST THE WORD 'MAY' USED IN THE CORRESPONDING SECTIONS BEFORE THE FINAN CE ACT 1987. HE SUBMITTED THAT THE QUESTION IN THIS CASE IS WHETHER THE PROVI SIONS OF SECTION 234B ARE APPLICABLE BUT NOT ABOUT THE MANDATORY NATURE OF TH E PROVISIONS OF SECTION 234B OF THE ACT. 4.1 THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE FILED ITS RETURN OF INCOME ON 30.11.2006 THAT IS BEFORE THE I NSERTION OF EXPLANATION U/S. 80IA BY FINANCE ACT 2007 CLAIMING DEDUCTION U/S. 80IA(4) OF THE ACT AT RS. 37 20 19 888. BY VIRTUE OF THE EXPLANATION INSERTE D IN THE FINANCE ACT 2007 CLARIFICATION WAS MADE THAT A CONTRACTOR OF THE ELI GIBLE ENTERPRISE WOULD NOT BE ELIGIBLE FOR DEDUCTION U/S. 80IA OF THE ACT. IT WA S STATED IN THE MEMORANDUM EXPLAINING THE FINANCE BILL THAT THIS EXPLANATION W AS BY WAY OF CLARIFICATION WITH RETROSPECTIVE EFFECT FROM 1.4.2001. BEFORE THE ABO VE RETURN WAS TAKEN UP FOR SCRUTINY THERE WERE SEARCH PROCEEDINGS ON 10.1.200 7 AND THE PENDING PROCEEDINGS ABATED U/S. 153A OF THE ACT. THEREFORE A RETURN WAS AGAIN CALLED FOR BY A NOTICE ON 14.9.2007 BY WHICH TIME THE EXPLANAT ION CAME ON THE STATUTE BOOK. 4.2 THE COUNSEL SUBMITTED THAT THE ELIGIBILITY FOR DEDUCTION U/S. 80IA WAS TAKEN INTO CONSIDERATION WHILE ESTIMATING THE ADVANCE TAX PAYABLE U/S. 207 R.W.S. 208 OF THE ACT. ACCORDINGLY AS THE TAX DEDUCTED AT SOURC E OF RS. 11 27 74 878 WAS MORE THAN THE TAX PAYABLE ON THE TOTAL INCOME COMPUTED A FTER CLAIM OF DEDUCTION OF RS. 37 20 19 888 NO ADVANCE TAX WAS FOUND PAYABLE. TH E CLAIM OF THE ASSESSEE U/S. 80IA BEFORE THE AMENDMENT WAS QUITE CORRECT AS HELD BY THE MUMBAI BENCH OF THE ITAT IN THE CASE OF PATEN ENG. LTD. VS. DCIT (2 005) 94 ITD 411 WHICH I.T.A. NO. 1062/HYD/2009 M/S. NAVAYUGA ENGINEERING CO. LTD. =========================== 4 SUBSEQUENTLY FOLLOWING BY THE SAME BENCH IN THE CAS E OF ACIT VS. BHARAT UDYOG LTD. (118 ITD 336) WHEREIN IT WAS HELD THAT A CONT RACTOR OF WORKS IS A DEVELOPER ELIGIBLE FOR DEDUCTION U/S. 80IA(4) OF THE ACT. IN THIS VIEW OF THE MATTER THE ASSESSEE WAS NOT LIABLE TO PAY ADVANCE TAX U/S. 207 R.W.S. 208 OF THE IT ACT. THEREFORE INTEREST U/S. 234B IS NOT CHARGEABLE AT A LL. 4.3 THE AR STATED THAT THE RELIANCE OF THE LEARNED CIT(A) ON THE DECISION OF THE SUPREME COURT IN THE CASE OF ANJUM M.H. GHASWALA (S UPRA) IS MISPLACED. THE SUPREME COURT WAS ONLY SEIZED OF THE STATUTORY LIAB ILITY AND THE POWERS OF THE SETTLEMENT COMMISSION TO REDUCE OR WAIVE THE LIABIL ITY U/S. 234B AND 234C OF THE IT ACT. IN THE CASE OF THE ASSESSEE THERE IS NO ST ATUTORY LIABILITY AS SUBMITTED ABOVE UNLIKE IN THE CASE OF BEFORE THE SUPREME COUR T WHERE THE STATUTORY LIABILITY WAS NOT DENIED. 4.4 THE LEARNED COUNSEL FOR THE ASSESSEE RELIED ON THE FOLLOWING DECISIONS WHICH IN HIS OPINION ARE DIRECT ON THE ISSUE BEFORE US. IN THE CASE OF EMAMI LTD VS. CIT (337 ITR 470) THE CALCUTTA HIGH COURT DEALT WITH CHARGEABILITY OF INTEREST U/S. 234B AND 234C IN CASE WHERE THERE WAS AN AMEND MENT OF EXPLANATION U/S. 115JB BY FINANCE ACT 2002 WITH RETROSPECTIVE EFFECT FROM 1.4.2001. THE COURT HELD THAT NO ADVANCE TAX WAS PAYABLE U/S. 207 AND 2 08 BEFORE THE AMENDMENT AND THAT THEREFORE INTEREST U/S. 234B AND 234C CA NNOT BE CHARGED FOR THE FINANCIAL YEAR BEFORE AMENDMENT WAS MADE ALBEIT RET ROSPECTIVE. 4.5 IN THE CASE OF SUN PETRO CHEMICALS PVT. LTD. VS . ITO THE ITAT AHMEDABAD 'B' BENCH CONSIDERED SIMILAR ISSUE IN I.T.A. NO. 10 10/AHD/2009 FOR THE A.Y. 2006- 07 WHEREIN THE AMENDMENT OF THE EXPLANATION U/S. 11 5JB BY FINANCE ACT 2008 WITH RETROSPECTIVE EFFECT FROM 1.4.2001 WAS CONSIDE RED. THE AMENDMENT WAS REGARDING THE DEFERRED TAX DEBITED TO PROFIT AND LO SS A/C.. THE BENCH HELD THAT THE ASSESSEE WAS NOT LIABLE TO INTEREST U/S. 234B O F THE ACT AND THAT ADMINISTRATIVE RELIEF CAN BE OBTAINED BY THE ASSESSEE CANNOT ERODE THE POWERS OF THE TRIBUNAL WHILE DEALING WITH A VALID APPEAL BEFORE IT. 4.6 THE LEARNED COUNSEL FOR THE ASSESSEE FURTHER RE LIED ON THE DECISION OF DELHI BENCH OF THIS TRIBUNAL IN THE CASE OF ROYAL J ORDANIAN AIRLINES VS. DDI (115 SOT 270) FOR THE PROPOSITION THAT SECTION 234B CANN OT BE INVOKED SO LONG AS THE ASSESSEE WAS UNDER THE BONA-FIDE BELIEF ON THE BASI S OF A DECISION OF THE TRIBUNAL BEFORE IT WAS REVERSED. THE OBSERVATIONS OF THE AS SESSING OFFICER AND I.T.A. NO. 1062/HYD/2009 M/S. NAVAYUGA ENGINEERING CO. LTD. =========================== 5 MECHANICAL ENDORSEMENT OF THE CIT THAT THE DECISION AS NOT APPLICABLE IS NOT CORRECT. THE POINT IN ISSUE IS THAT WHETHER THE AS SESSEE'S BELIEF WAS BONA-FIDE ON THE BASIS OF THE DECISION OF THE TRIBUNAL ON THE AP PLICABILITY OF SECTION 44BBA AND WHETHER INTEREST U/S. 234B COULD BE CHARGED WHEN AD VANCE TAX WAS NOT PAID ON THE BASIS OF THE BELIEF ENTERTAINED. THE PROVISION S OF SECTION 234B COME INTO PLAY ONLY IF THERE IS A STATUTORY LIABILITY FOR ADVANCE TAX WHICH CAN BE ONLY U/S 207 R.W.S. 208 OF THE ACT. 4.7 THE LEARNED COUNSEL FOR THE ASSESSEE ALSO RELIE D ON THE DECISIONS OF DELHI BENCH IN THE CASE OF PRIYANKA OVERSEAS LTD VS. DCIT (79 ITD 353) AND PUNE BENCH OF THIS TRIBUNAL IN THE CASE OF TRINITY FORGE VS. ACIT (73 TTJ 582). THE OBSERVATION OF THE ACIT THAT THE DECISION OF THE PU NE BENCH WAS A CASE OF DEDUCTION U/S. 80HHE AND ENDORSED BY THE CIT(A) IS NOT FACTUALLY CORRECT. IN THAT CASE THE RETROSPECTIVE AMENDMENT WAS TO SECTION 28 ROPING IN THE INCOME FROM CASH COMPENSATORY SUPPORT AS BUSINESS INCOME BY THE FINANCE ACT 1990 WITH RETROSPECTIVE EFFECT FROM 1.4.1967 WHILE ADVANCE TA X ESTIMATE WAS FILED ON 6.11.1989 BEFORE THE RETROSPECTIVE AMENDMENT. THE BENCH OF THE ITAT HELD THAT INTEREST U/S. 234B OR 234C CANNOT BE CHARGED ON ACC OUNT OF FAILURE TO PAY ADVANCE TAX ON THE AMOUNT OF CASH COMPENSATORY SUPP ORT. 4.8 REGARDING CHARGE OF INTEREST U/S 234C THE LEAR NED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER AND T HE CIT(A) FILED TO NOTICE THAT LIABILITY ARISES ONLY IF THERE IS SHORTFALL/DELAY I N PAYMENT OF 'TAX DUE ON THE RETURNED INCOME' AS DEFINED IN THE EXPLANATION. THERE WAS N O TAX DUE ON THE RETURNED INCOME SINCE IT WAS FULLY COVERED BY TDS. THE CHARG E OF INTEREST U/S. 234C (RS. 76 44 765) IS THEREFORE IN CORRECT AND INVALID. AC CORDINGLY HE PRAYED THAT THE INTEREST U/S 234B AND 234C MAY BE DELETED. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL AVAILABLE ON RECORD. THE CONTENTION OF THE ASSESSEE COUNSEL IS THAT THE ASSESSEE HAS NOT COMMITTED ANY ERROR IN NOT PAYING THE ADVANCE TAX A S THE ASSESSEE WAS UNDER A BONA-FIDE BELIEF THAT IT IS ENTITLED FOR DEDUCTION U/S 80IA(4) OF THE ACT ON THE BASIS OF VARIOUS ORDERS OF THE TRIBUNAL AND JUDGEMENTS OF HIGH COURTS. THE CONTENTION OF THE DEPARTMENT COUNSEL IS THAT FINANCE ACT 2080 1 HAS AMENDED EXPLANATION (1) TO SECTION 234B OF THE ACT RETROSPECTIVELY W.E. F. 1 ST APRIL 1989 AND HAS LAID DOWN THAT THE ASSESSED TAX WOULD BE TAX ON TOTAL IN COME DETERMINED U/S. 143(1) I.T.A. NO. 1062/HYD/2009 M/S. NAVAYUGA ENGINEERING CO. LTD. =========================== 6 OR 143(3) OF THE ACT AS REDUCED BY CERTAIN AMOUNT M ENTIONED THEREIN. IT WOULD BE APPROPRIATE TO REPRODUCE EXPLANATION (1) TO SECTION 234B WHICH IS AS UNDER: [EXPLANATION 1 - IN THIS SECTION 'ASSESSED TAX' MEANS THE TAX ON THE TOTAL INCOME DETERMINED UNDER SUB-SECTION (1) O F SECTION 143 AND WHERE A REGULAR ASSESSMENT IS MADE THE TAX ON THE TOTAL INCOME DETERMINED UNDER SUCH REGULAR ASSESSMENT AS REDUCED BY THE AMOUNT OF (I) ANY TAX DEDUCTED OR COLLECTED AT SOURCE IN ACCO RDANCE WITH THE PROVISIONS OF CHAPTER XVII ON ANY INCOME WHICH IS SUBJECT TO SUCH DEDUCTION OR COLLECTION AND WHICH I S TAKEN INTO ACCOUNT IN COMPUTING SUCH TOTAL INCOME; (II) ANY RELIEF OF TAX ALLOWED UNDER SECTION 90 ON ACCOUNT OF TAX PAID IN A COUNTRY OUTSIDE INDIA; (III) ANY RELIEF OF TAX ALLOWED UNDER SECTION 90A O N ACCOUNT OF TAX PAID IN A SPECIFIED TERRITORY OUTSIDE INDIA REF ERRED TO IN THAT SECTIONS. (IV) ANY DEDUCTION FROM THE INDIAN INCOME-TAX PAYA BLE ALLOWED UNDER SECTION 91 ON ACCOUNT OF TAX PAID IN A COUNT RY OUTSIDE INDIA; AND (V) ANY TAX CREDIT ALLOWED TO BE SET OFF IN ACCORDA NCE WITH THE PROVISIONS OF SECTION 115JAA.] 5.1 AS PER THIS AMENDMENT INTEREST IS LEVIABLE ON THE INCOME AS DETERMINED BY THE ASSESSING AUTHORITY MINUS THE INCOME ON WHIC H TAX HAS BEEN PAID OR DEDUCTED. THE AMENDMENT IS ONLY TO CLARIFY THE AMB IGUITY THAT WAS FELT IN THE ORIGINAL PROVISION. THE MATTER IS NO LONGER RES INTEGRA . IN THE CASE OF PARKASH AGRO'S [2009] 316 ITR 149 (P&H) WHILE CONSIDERING THE EFFECT OF AMENDMENT TO EXPLANATION 1 RETROSPECTIVELY WITH EFFECT FROM APRIL 1 1989 HAD HELD THAT AN ASSESSEE IS LIABLE TO PAY INTEREST UNDER SECTION 23 4B OF THE ACT ON THE AMOUNT OF INCOME ASSESSED UNDER SECTION 143(1) OR 143(3) OF T HE ACT AND NOT ON THE BASIS OF INCOME DECLARED IN THE RETURN BY THE ASSESSEE. THE RELEVANT OBSERVATIONS READ AS UNDER : '9. IT IS NO DOUBT TRUE THAT PRIOR TO THE AMENDMENT BROUGHT BY FINANCE ACT 2001 WHICH HAS BEEN MADE EFFECTIVE RETROSPECTIVELY FROM APRIL 1 1989 THE INTEREST UNDER SECTION 234B OF THE ACT WAS CHAR GEABLE WITH REFERENCE TO THE TOTAL INCOME AS HAD BEEN DECLARED BY THE ASS ESSEE IN ITS RETURN AND NOT ON THE ASSESSED INCOME. EXPLANATION 1 TO SECTION 234B OF THE ACT WAS AMENDED BY FINANCE ACT 2001. IT READS THUS : 'EXPLANATION 1 .IN THIS SECTION 'ASSESSED TAX' MEANS THE TAX ON THE TOTAL INCOME DETERMINED UNDER SUB-SECTION (1) OF SECTION 143 OR ON REGULAR ASSESSMENT AS REDUCED BY THE AMOUNT OF TAX DEDUCTED OR COLLECTED AT I.T.A. NO. 1062/HYD/2009 M/S. NAVAYUGA ENGINEERING CO. LTD. =========================== 7 SOURCE IN ACCORDANCE WITH THE PROVISIONS OF CHAPTER XVII ON ANY INCOME WHICH IS SUBJECT TO SUCH DEDUCTION OR COLLECTION AN D WHICH IS TAKEN INTO ACCOUNT IN COMPUTING SUCH TOTAL INCOME. (B) IN SUB-SECTION (3) FOR THE WORDS 'ONE AND ONE -HALF PER CENT' THE WORDS 'ONE AND ONE-FOURTH PER CENT' SHALL BE SUBSTI TUTED WITH EFFECT FROM JUNE 1 2001.' THE SAID EXPLANATION WAS SUBJECT-MATTER OF CHALLENGE BEFORE PUNJAB & HA RYANA HIGH COURT IN RAJ KUMAR SINGHAL'S CASE [2002] 255 I TR 561 WHERE THE DIVISION BENCH WHILE UPHOLDING THE VALIDITY OF THE SAID PRO VISION INTERPRETED IT AS UNDER: '......A COMPARISON OF THE TWO PROVISIONS SHOWS THA T UNDER THE ORIGINAL PROVISION INTEREST WAS LEVIABLE ON THE INCOME AS DE CLARED IN THE RETURN FILED BY THE ASSESSEE. BY THE AMENDED PROVISION THE INTE REST IS LEVIABLE ON THE INCOME AS DETERMINED BY THE ASSESSING AUTHORITY MIN US THE INCOME ON WHICH THE TAX HAS BEEN PAID OR DEDUCTED. THE AMENDM ENT IS ONLY CALCULATED TO CLARIFY THE AMBIGUITY THAT WAS FELT I N THE ORIGINAL PROVISION. IT IS NOT ARBITRARY OR UNREASONABLE........'.' THE JUDGMENTS RELIED UPON BY THE ASSESSEE ARE DISTI NGUISHABLE AS THE EFFECT OF AMENDMENT BY FINANCE ACT 2001 WAS NOT UN DER CONSIDERATION IN THOSE CASES. IN VIEW OF CLEAR PROVISION INCORPORATE D IN THE EXPLANATION AND JUDGMENT OF THIS COURT IN PARKASH AGRO'S CASE [2009 ] 316 ITR 149 (P&H) CHARGEABILITY OF INTEREST IS BEYOND QUESTION. 5.2 FURTHER IN THE CASE OF JACOB EXPORT HOUSE VS. CIT (330 ITR 53) (P&H) THE COURT HELD AS FOLLOWS: 'THE ASSESSEE DID NOT PAY ADVANCE TAX IN ACCORDANCE WITH THE PROVISIONS OF SECTION 208 OF THE INCOME-TAX ACT 19 61 ON THE GROUND THAT ITS INCOME WAS NOT LIABLE TO BE TAXED I N VIEW OF THE PROVISIONS UNDER SECTIONS 80HHC AND 80-IB OF THE AC T. THE CLAIM OF THE ASSESSEE WAS NOT ACCEPTED BY THE ASSESSING O FFICER AND DEMAND OF INTEREST WAS RAISED UNDER SECTION 234B OF THE ACT. THE COMMISSIONER (APPEALS) UPHELD THE PLEA OF THE ASSES SEE THAT SINCE ADVANCE TAX WAS NOT PAID UNDER A BONA FIDE BELIEF INTEREST UNDER SECTION 234B OF THE ACT WAS NOT ATTRACTED. THE TRI BUNAL HELD THAT A BONA FIDE BELIEF OF THE ASSESSEE TO ESTIMATE THE TA XABILITY OF INCOME COULD NOT BE A VALID GROUND TO AVOID LIABILITY TO P AY INTEREST UNDER SECTION 234B OF THE ACT ON ADVANCE TAX ULTIMATELY F OUND DUE. ON APPEAL: HELD DISMISSING THE APPEAL THAT BY THE AMENDMENT OF E XPLANATION 1 TO SECTION 234B AN ASSESSEE WAS LIABLE TO PAY INT EREST UNDER SECTION 234B OF THE ACT ON THE AMOUNT OF INCOME ASS ESSED UNDER SECTION 143(1) OR 143(3) OF THE ACT AND NOT ON THE BASIS OF INCOME DECLARED IN THE RETURN BY THE ASSESSEE. THE CHARGE ABILITY OF INTEREST WAS BEYOND QUESTION.' 5.3 THE JUDGEMENT IN THE CASE OF RANCHI CLUB LTD. ( 247 ITR 209) RELATE TO THE CASES PRIOR TO THE AFORESAID AMENDMENT AND THUS DO NOT HELP THE ASSESSEE. IN I.T.A. NO. 1062/HYD/2009 M/S. NAVAYUGA ENGINEERING CO. LTD. =========================== 8 VIEW OF THIS MATTER THE ASSESSEE IS LIABLE FOR INTE REST U/S 234B AND 234C ON THE ASSESSED INCOME. 5.4 THOUGH THE ASSESSEE RELIED ON VARIOUS JUDGEMENT S BEFORE US WHICH ARE NOT APPRECIATED BY US ON THE REASON THAT THE ISSUE BEFORE US IS SQUARELY COVERED AGAINST THE ASSESSEE BY THE JUDGEMENT CITED (SUPRA) IN THE CASE OF JACOB EXPORT HOUSE. 6. IN THE RESULT APPEAL OF THE ASSESSEE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 14 TH DECEMBER 2011. SD/ - (ASHA VIJAYARAGHAVAN) JUDICIAL MEMBER SD/ - (CHANDRA POOJARI) ACCOUNTANT MEMBER HYDERABAD DATED THE 14 TH DECEMBER 2011 COPY FORWARDED TO: 1. M/S. NAVAYUGA ENGINEERING COMPANY LTD. 1259 LA XMI TOWERS ROAD NO. 36 JUBILEE HILLS HYDERABAD. 2. THE DEPUTY COMMISSIONER OF INCOME-TAX CENTRAL C IRCLE-1 AAYAKAR BHAVAN BASHEERBAGH HYDERABAD. 3. THE CIT(A)-I HYDERABAD. 4. THE CIT (CENTRAL) HYDERABAD. 5. THE DR B BENCH ITAT HYDERABAD TPRAO