Commissioner of Income Tax Vs. Xpro India Ltd.  INSC 344 (4 March 2008)
S.H. KAPADIA & B. SUDERSHAN REDDY O R D E R (Arising out of SLP(C) No. 19599/07) Leave granted.
The following substantial question of law arose for determination under
Section 260-A of the Income Tax Act,1961. The said question reads as follows:
Whether on the facts and in the circumstances of the case Hon'ble High
Court was right in allowing credit for MAT, u/s. 115 JAA of the Income Tax Act,
1961 before charging interest U/S 234B and 234C of the Income Tax Act? In our
view, the High Court erred in coming to the conclusion that no substantial
question of law arose and consequently the Department's appeals was dismissed.
We are of the view that in the present case question of interpretation of
Section 234-B in the context of of short payment of interest on advances tax
arises for determination before the High Court which warrants interpretation of
Section 115 JAA of the 1961 Act read with Section 234-B and 234- C of the 1961
Act. The shortage in payment according to the respondent was on account of
applicability of Section 115 JAA. The High Court in that connection was
required to decide the nature of the levy under Section 234B whether the levy
is penal or mandatory. It has Mahindra, 265 ITR 119.
The Civil Appeal is allowed and the impugned judgment is set aside with the
direction to the High Court to consider the above question in accordance with
law. Accordingly, Income Tax Appeal filed before the High Court stand restored
to the file of the High Court.
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