It was impossible to foresee the decision of the Supreme Court. No interest can be charged if the tax liability arises due to Supreme Court decision

0
93
decision-1

HARYANA WAREHOUSING CORPORATION vs. DEPUTY COMMISSIONER OF INCOME TAX

ITAT, DELHI ‘C’ THIRD MEMBER BENCH

M.K. Chaturvedi & Phool Singh, J.Ms.; Krishan Swarup, A.M.

ITA Nos. 6095/Del/1997; Asst. yr. 1992-93

25th July, 2000

(2000) 19 CCH 0248 DelTrib

(2000) 69 TTJ 0859 : (2000) 75 ITD 0155

Legislation Referred to

S 208, 234B

Interest under s. 234B—Chargeability—Exemption under s. 10(29) denied on the basis of Supreme Court decision—Assessee, a warehousing corporation, claimed exemption under s. 10(29) in respect of its entire income—Similar exemption was allowed all along in the past on the basis of a High Court decision—Said decision reversed by apex Court—Accordingly, AO rejected the claim for exemption partly—Liability to pay advance tax cannot be fastened on assessee—It was impossible to foresee the decision of the Supreme Court—Assessee’s case falls beyond the ken of s. 208—Not liable to interest under s. 234B

Held:

PER M.K. CHATURVEDI, J.M. (AS THIRD MEMBER) (AGREEING WITH A.M.)

Admittedly upto asst. yr.1991-92 the assessee did get the benefit of s. 10(29). It was assessed on Nil income. The exemption was granted on the basis of Allahabad High Court decision in CIT vs. U.P. State Warehousing Corpn. (1991) 100 CTR (All) 15 : (1992) 195 ITR 273 (All). Till 31st March, 1992, this was the only decision available on the point. As no other decision was available, therefore, the Department also accepted this decision. The assessee acted bona fide in conformity with the decision of the High Court. Just because the decision was reversed by the apex Court liability to pay advance tax cannot be fastened on the assessee. At the relevant point of time it was impossible on the part of the assessee to foresee the decision of the Supreme Court on the point. Sec. 234B is mandatory in nature. But before invoking s. 234B it is also essential to see that whether the assessee comes within the sweep of this section. The condition precedent for invoking the provisions of s. 234B are that the assessee must be fastened with the liability to pay advance tax under s. 208. Taking into consideration the entire conspectus of the case, the assessee was not liable to make the payment of advance tax. The case of the assessee falls beyond the ken of s. 208. As such, it is not coming within the ambit of s. 234B

(Paras 14 & 15)

Conclusion:

Assessee being allowed exemption under s. 10(29) on the basis of a High Court decision, interest under s. 234B could not be charged on subsequent reversal of the High Court decision by the Supreme Court.

Case referred to

CIT vs. Gujarat State Warehousing Corpn. Ltd., [reported at (2000) 163 CTR (SC) 390]

CIT vs. Hindustan Electro Graphites Ltd. (2000) 160 CTR (SC) 8

CIT vs. Rajasthan State Warehousing Corpn. (1994) 120 CTR (Raj) 1 : (1994) 210 ITR 906 (Raj)

CIT vs. U.P. State Warehousing Corpn. (1991) 100 CTR (All) 15 : (1992) 195 ITR 273 (All)

Dr. (Mrs.) Devinder Kaur Sekhon vs. Asstt. CIT (1998) 67 ITD 407 (Chd)

J.K. Synthetics Ltd. vs. CTO (1994) 119 CTR (SC) 222

Orissa State Warehousing Corpn. vs. CIT (1999) 153 CTR (SC) 177 : (1992) 237 ITR 589 (SC)

Ranchi Club Ltd. vs. CIT (1996) 131 CTR (Pat) 368 : (1996) 217 ITR 72 (Pat)

Sedco Forest International Drilling Inc. vs. Dy. CIT (2000) 67 TTJ (Del) 670 : (2000) 72 ITD 415 (Del)

Uday Mistanna Bhandar vs. CIT (1997) 137 CTR (Pat) 376 : (1996) 222 ITR 44 (Pat)

Vikshara Trading & Investment (P) Ltd. vs. Dy. CIT (1999) 63 TTJ (Ahd) 141

Counsel appeared:

M.L. Garg & Satish Kumar, for the Appellant : Satish Goel, for the Respondent

ORDER

KRISHAN SWARUP, A.M.: :

Order

In this appeal against the order of the CIT(A), Shimla dt. 28th Nov., 1997, for the asst. yr. 1992-93, the grounds taken by the assessee run as under:

“1. (i) That the order of the learned CIT(A) upholding the charge of interest under s. 234B amounting to Rs. 2,82,59,843 is wholly unjustified and against law.

(ii) That the learned CIT(A) has passed a perfunctory order, without in any manner discussing the written arguments filed by the appellant.

(iii) That the case of the appellant is squarely covered by the judgment of the Hon’ble Supreme Court in J.K. Synthetics cases followed by Patna High Court. The order of the learned CIT(A) in not following the said judgments is totally arbitrary.

It is, therefore, prayed that interest charged by the AO and upheld by the CIT(A) be quashed.”

  1. As is manifest, the challenge by the assessee is to the levy of interest under s.234B of the IT Act, 1961. In order to appreciate the point of controversy, the factual matrix of the case may be stated thus. The assessee is a warehousing corporation set up under the Warehousing Corporation Act, 1962. In its P&L a/c attached with the return for the year under consideration, it had shown the following incomes :
Rs.
(i) Warehousing charges 7,65,76,819
(ii) Supervision charges 27,01,231
(iii) Interest on advances 19,90,541
(iv) Surplus on trading of wheat 8,27,39,992

The whole of the aforesaid income was claimed to be exempt under s. 10(29) of the IT Act, 1961 (‘the Act’). In the assessment completed vide order under s. 143(3) of the Act dt. 8th Dec., 1994, the AO held that only the income of Rs. 7,65,76,819 from warehousing charges for storage, processing or facilitating the marketing of commodities was exempt under s. 10(29) of the Act. The income from supervision charges, interest and buying and selling of wheat was thus held to be taxable. After making certain disallowances/additions, the total (taxable) income was computed at Rs. 8,77,03,400 as against the nil returned income. In the assessment interest under s. 234B was charged at Rs. 2,99,55,030. In appeal against the assessment the learned CIT(A) accepted the assessee’s plea for exemption of income from supervision charges and deleted the addition of account of interest income. Certain other relief was also allowed. After giving effect to the order of the learned CIT(A) the total income remained at Rs. 8,27,39,990 (being the income from trading of wheat). Interest under s. 234B was charged at Rs. 2,82,59,843. Before the learned CIT(A), the assessee had not disputed the charging of interest. Both the assessee and the Department came in appeal before the Tribunal which vide its order dt. 19th Feb., 1997, affirmed the order of the learned CIT(A) in upholding the AO’s action to treat the income from trading of wheat to be taxable.

2.1. In appeal before the Tribunal the assessee had raised an additional ground challenging the levy of interest under s. 234B of the Act. The Tribunal admitted the additional ground and restored this matter to the file of the AO for deciding the issue in accordance with law.

  1. In the order passed by him under s. 254(1), r/w s. 143(3) the AO rejected the assessee’s plea that in the circumstances of the case it was not liable to pay advance tax and as such interest under s. 234B was not leviable. The assessee had relied on the decision of the apex Court in J.K. Synthetics Ltd. vs. CTO (1994) 119 CTR (SC) 222 : AIR 1994 SC 2393 followed by the Patna High Court in Ranchi Club Ltd. vs. CIT (1996) 131 CTR (Pat) 368 : (1996) 217 ITR 72 (Pat) but the AO held that this decision did not help the assessee. The order of the AO was summarily upheld by the learned CIT(A), Shimla. The assessee is aggrieved.
  2. The submission of the learned counsel for the assessee was that it had two types of income—income from rent of godowns and income from procurement of wheat as agent of the Government. It was submitted that upto asst. yr. 1991-92 both these types of income was all along held to be exempt under s. 10(29) of the Act. In this connection our attention was invited to the assessment orders dt. 24th Sept., 1991/14th Oct., 1991, for the asst. yr. 1990-91 and dt. 15th Dec., 1993, for the asst. yr. 1991-92, copies placed at pp. 1 & 2 of the paper book. The learned counsel submitted that for the year under consideration also exemption of the aforesaid types of income was claimed in the return filed on 31st Dec., 1992. It was explained that in its decision rendered on 1st Dec., 1993 in the case of CIT vs. Rajasthan State Warehousing Corpn. (1994) 120 CTR (Raj) 1 : (1994) 210 ITR 906 (Raj), the Rajasthan High Court held that income derived from procurement of grains for the State Government, etc. did not relate to letting of godowns or warehouses and hence it was not exempt under s. 10(29) of the IT Act. According to the learned counsel, it was in view of this decision that the AO and the learned CIT(A) had held the income of Rs. 8,27,39,992 from trading of wheat to be taxable. The order of the learned CIT(A) was affirmed by the Tribunal also, inter alia on the basis of this decision.

4.1. In the aforesaid background, the learned counsel for the assessee submitted that in the financial year 1991-92 when the instalments of advance tax were payable, the assessee was under a bona fide belief that it was not liable to pay any advance tax, its entire income being exempt under s. 10(29) of the IT Act as in past. It was stressed that on the relevant dates the assessee had before it the assessment order for the asst. yr. 1990-91 by which the assessee’s entire income was held to be exempt under s. 10(29) of the Act. It was argued that if there was no liability to pay advance tax, no interest could be charged under s. 234B of the Act. In this connection reliance was placed on the decisions of the ITAT, Chandigarh Bench in the case of Dr. (Mrs.) Devinder Kaur Sekhon vs. Asstt. CIT (1998) 67 ITD 407 (Chd) and the ITAT Ahmedabad Bench in the case of Vikshara Trading & Investment (P) Ltd. vs. Dy. CIT (1999) 63 TTJ (Ahd) 141 : (1998) 96 Taxman 188 (Ahd). Strong reliance was placed on the ratio of the decision of the Patna High Court in the case of Ranchi Club Ltd. (supra).

  1. We have given our utmost consideration to the facts and circumstances of the case, the material to which our attention was invited and the rival submissions. The provisions relating to advance payment of tax have undergone certain significant changes on account of amendments made by the Direct Tax Laws (Amendment) Act, 1987. It would be relevant to refer to some of these provisions.

5.1. Sec. 207, as substituted by the aforesaid Act, w.e.f. 1st April, 1988, lays down that tax shall be payable in advance during any financial year in accordance with the provisions of ss. 208 to 219, in respect of the total income of the assessee which would be chargeable to tax for the assessment year immediately following that financial year. Such income on which advance tax is payable is to be called as “Current Income”.

[Emphasis, italicised in print, supplied]

5.2 Sec. 208, referred to in the aforesaid provision, read as under before amendment, w.e.f. 1st Oct.,1996 :

“208. Conditions of liability to pay advance tax.—Advance tax shall be payable during a financial year in every case where the amount of such tax payable by the assessee during that year, as computed in accordance with the provisions of this Chapter, is one thousand five hundred rupees or more.”

[Emphasis, italicised in print, supplied]

5.3. Sec. 210 provides for payment of advance tax by the assessee of his own accord or in pursuance of an order of the AO. Sub-s. (1) lays down that any person who is liable to pay advance tax under s. 208 shall suo motu compute advance tax payable on his current income and pay the same in instalments as specified in s. 211. There is no need to file any statement/estimate of advance tax payable, as was required before amendment by the Act of 1987. Sub-s. (2) allows an assessee to subsequently revise the advance tax payable in the remaining instalments in accordance with the revised estimate of his current income, without any requirement of filing a revised estimate. Sub-s. (3) empowers the AO to pass an order requiring an assessee who has been already assessed to income-tax, but has not paid any advance tax during the relevant financial year, to pay advance tax calculated in the manner laid down in s. 209. Such an order must be passed during the financial year but not later than the last day of February. Sub-s. (4) empowers the AO to pass a revised order for payment of advance tax by the assessee where, subsequent to the passing of the original order, but before the first day of March, a return of income in respect of any later year has been furnished or any regular assessment for a later year has been made. Sub-s. (5) enables the assessee to pay less amount of advance tax than what is demanded by the AO under sub-s. (3) or (4) if, in his estimation, the advance tax payable on his current income would be less than the amount demanded by the officer. Sub-s. (6) correspondingly requires the assessee to estimate his current income where the amount of advance tax payable on the current income is likely to be higher than the advance demanded by the AO under sub-s. (3) or (4) or intimated by him under sub-s. (5).

5.4. Sec. 209 of the Act, after amendment by the Amending Act, 1987, lays down the method of computing advance tax payable during a financial year as follows :

(a) Where the calculation is made by the assessee for paying the advance tax, either of his own accord or on the basis of the estimate of his current income after the assessee is served with a notice by the AO under s. 210(3) or (4) for payment of advance tax, income-tax on the current income shall be calculated at the rates in force in that financial year.

(b) Where calculation is made by the AO for making an order under s. 210(3) requiring the assessee to pay advance tax, he shall adopt the total income assessed by way of regular assessment of the latest previous year or the total income returned by the assessee for any subsequent previous year, whichever is higher, and calculate income-tax thereon at the rates in force in that financial year.

(c) Where calculation is made by the AO for making an amended order under s. 210(4), on the basis of a return filed or a regular assessment completed subsequently for a previous year later than that adopted in an order under s. 210(3), income-tax shall be calculated on the total income declared in such subsequent return or total income determined in such subsequent regular assessment, as the case may be, at the rates in force in that financial year.

(d) The income-tax calculated under any of the above clauses shall, in each case, be reduced by the amount of income-tax which would be deductible at source under any provisions of the Act on any income which has been included in the current/total income determined under any of the above clauses.

5.5. Sec. 234B(1) inserted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1st April,1989, which provides for the liability to pay interest, reads as under :

“234B.(1) Subject to the other provisions of this section, where, in any financial year, an assessee who is liable to pay advance tax under s. 208 has failed to pay such tax or, where the advance tax paid by such assessee under the provisions of s. 210 is less than ninety per cent of the assessee tax, the assessee shall be liable to pay simple interest at the rate of two per cent for every month or part of a month comprised in the period from the 1st day of April, next following such financial year to the date of determination of total income under sub-s. (1) of s. 143 and where a regular assessment is made, to the date of such regular assessment, on an amount equal to the assessed tax or, as the case may be, on the amount by which the advance tax paid as aforesaid falls short of the assessed tax.”

[Emphasis, italicised in print, supplied]

  1. The important aspects that emerge from the provisions referred to above, in so far as they are relevant to the issue before us, can be succinctly culled out as under :

(a) Advance tax is payable by an assessee during any financial year in respect of his total income which would be chargeable to tax in the relevant assessment year.

(b) The liability to pay advance tax arises in the context of the current income of the assessee which would be chargeable to tax for the assessment year immediately following the relevant financial year, if the tax payable is Rs. 1,500 or more.

(c) If a person is liable to pay advance tax, he shall suo motu compute the advance tax payable on his current income.

(d) If an assessee who had earlier been assessed to income-tax, has not voluntarily paid the advance tax during the relevant financial year, the ao can pass an order requiring him to pay advance tax and for this purpose, the total income assessed by way of regular assessment of the latest previous year or the total income returned by the assessee for any subsequent previous year, whichever is higher, is to be adopted.

(e) If an assessee who is liable to pay advance tax has failed to pay such tax, he will be liable to pay interest at the prescribed rate.

  1. Adverting to the facts of the present case, as is mentioned above, the assessee had declared ‘nil’ income for the assessment year under consideration by claiming exemption under s. 10(29) of the Act in respect of its entire income from various activities carried on by it, including the income of Rs. 8,27,39,992 from dealing in foodgrains, which is ultimately determined as its total income. The income from the said source i.e., trading of wheat had all along been exempted from tax under s. 10(29) of the Act and during the financial year 1991-92 when the advance tax, if any payable, was to be paid, the order that held the field was the assessment order for the asst. yr. 1990-91 completed on 24th Sept., 1991/14th Oct., 1991, accepting that the entire income of the assessee was exempt from tax. The crucial question for consideration is whether during the financial year 1991-92 when the advance tax was to be paid, the assessee could visualize that its total income for the said financial year was “chargeable to tax” and hence he was “liable to pay advance tax” in the said financial year. In this connection the words “payable” and “liable” assume imporance. The meaning ascribed to by the judicial authorities to the former word is “what is to be paid under any liability, liable to be paid”. The meaning assigned to the latter word is “bound” or “obliged in law”. In our considered opinion, it is not possible to hold that the law envisaged the assessee to anticipate its assessment and require it to pay the advance tax on that basis to avoid liability to pay interest. The well-settled proposition of law is that nobody can be asked to do the impossible. Income from dealings in foodgrains having been held to be taxable in the assessment only in view of the decision of the Hon’ble Rajasthan High Court delivered subsequent to the relevant financial year, it could not by any stretch of imagination be said that the assessee was liable or bound in law to pay advance tax. In other words, it could not be held that the assessee could know or anticipate that the condition of liability to pay advance tax as per provisions of ss. 207 and 208 of the Act would be attracted in its case. A somewhat similar situation existed in the case of Ranchi Club Ltd. (supra) and the Hon’ble Patna High Court held that the assessee could not be said to have committed a default within the meaning of s. 234B of the Act. In arriving at this conclusion, the Hon’ble High Court referred to the apex Court decision in the case of J.K. Synthetics Ltd. (supra) which though delivered in a different context, but the principle laid down by it was held to cover cases of the present nature.
  2. It would be relevant to refer very briefly to the facts in the case of J.K. Synthetics Ltd. (supra). In this case the appeals were directed against certain assessment orders made by the CTO under the Rajasthan ST Act, 1954. The question related to payment of interest on tax on the amount of freight charged in respect of sale of cement. The relevant facts were that the returns were filed by the appellant on the premises that the amount of freight charged in respect of sale of cement did not form part of the sale price for the payment of sales-tax. The appellant had contended that it had raised the contention bona fide but the same stood rejected by the order of the Hon’ble Supreme Court, holding that the freight element formed part of the price of the cement and sales-tax was leviable on the sale price inclusive of the freight amount. The appellant was, therefore, required to pay sales-tax on the sale price inclusive of the freight. The dispute before the apex Court was limited to the question whether the assessee was required to pay interest on the additional sales-tax which had to be paid on the inclusion of the freight amount in calculating the sale price. The apex Court referred to the provisions of s. 7(1) of the Act providing that every dealer liable to pay tax shall furnish returns of his turnover in the prescribed manner. Sec. 7(2) providing that every return shall be accompanied by a receipt showing the deposit of the full amount of tax due on the basis of the return and sub-s. (2A) of s. 7 empowering the State Government to require any dealer to pay tax at interval shorter than those prescribed under sub-s. (1). It referred to the provisions of s. 11B providing for charging of interest if the amount of any tax payable under sub-s. (2) and (2A) of s. 7 was not paid within the time allowed. After analysing the relevant provisions of the Rajasthan ST Act, 1954, including the provisions referred to above, the apex Court held that no interest was chargeable from the assessee under s.11B of the Act. It would be relevant to extract below the relevant part of the order :

“17. Let us look at the question from a slightly different angle. Sec. 7(1) enjoins on every dealer that he shall furnish prescribed returns for the prescribed period within the prescribed time to the assessing authority. By the proviso the time can be extended by not more than 15 days. The requirement of s. 7(1) is undoubtedly a statutory requirement. The prescribed return must be accompanied by a receipt evidencing the deposit of full amount of ‘tax due’ in the State Government on the basis of the return. That is the requirement of s. 7(2). Sec. 7(2A), no doubt, permits payment of tax at shorter intervals but the ultimate requirement is deposit of the full amount of ‘tax due’ shown in the return. When s.11B(a) uses the expression ‘tax payable under sub-s. (2) and (2A) of s. 7”, that must be understood in the context of the aforesaid expressions employed in the two sub-sections. Therefore, the expression ‘tax payable’ under the said two sub-sections is the full amount of tax due and ‘tax due’ is that amount which becomes due ex-hypothesis on the turnover and taxable turnover “shown in or based on the return.” The word ‘payable’ is a descriptive word, which ordinarily means “that which must be paid or is due, or may be paid” but its correct meaning can only be determined if the context in which it is used is kept in view. The word has been frequently understood to mean that which may, can or should be paid and is held equivalent to ‘due’. Therefore, the conjoint reading of ss. 7(1), (2) and (2A) and 11B of the Act leaves no room for doubt that the expression ‘tax payable’ in s.11B can only mean the full amount of tax which becomes due under sub-ss. (2) and (2A) of the Act when assessed on the basis of the information regarding turnover and taxable turnover furnished or shown in the return. Therefore, so long as the assessee pays the tax which according to him is due on the basis of information supplied in the return filed by him, there would be no default on his part to meet his statutory obligation under s. 7 of the Act and, therefore, it would be difficult to hold that the ‘tax payable’ by him ‘is not paid’ to visit him with the liability to pay interest under cl. (a) of s. 11B. It would be a different matter if the return is not approved by the authority but that is not the case here. It is difficult on the plain language of the section to hold that the law envisages the assessee to predicate the final assessment and expect him to pay the tax on that basis to avoid the liability to pay interest. That would be asking him to do the near impossible.”

  1. The proposition laid down by the aforesaid decision is that the law does not envisage an assessee to predicate the position after the assessment. If this proposition is applied to the facts of the present case, it would have to be held that since the assessee could not by any means anticipate that advance tax was payable by it in the financial year 1991-92, it could not be expected to pay advance tax. If that is so, it could not be held liable to pay interest under s.234B of the Act.
  2. The brief facts in the case of Dr. (Mrs.) Devinder Kaur Sekhon (supra) were that the assessee had received certain amount as interest on enhanced compensation for agricultural land acquired by the Government in the financial year 1992-93. In view of the decisions of the apex Court, the amount of interest was held to be assessable in asst. yrs. 1986-87 to 1992-93. On account of inclusion of the said interest income, interest under s. 234C was charged for the asst. yrs. 1989-90 to 1992-93. The Chandigarh Bench of the Tribunal held that the assessee could not have foreseen the amount of enhanced compensation and also interest awardable in relation thereto in the relevant years and, as such, there was no failure on her part so as to attract the provisions of s. 234B/234C of the Act. This decision also supports assessee’s case.
  3. The matter has another aspect also. Since the assessee had earlier been assessed to tax and had not paid advance tax voluntarily. Sub-s. (3) of s. 210 empowered the AO to pass an order requiring it to pay advance tax. But in this case even the AO could not pass such an order because the basis for passing the order was the assessed income of the latest previous year which was “nil” and no positive income was declared in the return for the subsequent period filed upto the last day of February of the Financial Year 1991-92.
  4. In view of the foregoing discussion, we have no hesitation in coming to the conclusion that in the peculiar circumstances of the case the failure to pay advance tax cannot be attributed to the assessee, and, therefore, it cannot be held liable to interest under s. 234B of the IT Act.
  5. In the result, the appeal is allowed.

Phool Singh, J.M. :

I have gone through the draft order prepared by my esteemed brother Shri Krishan Swarup, Accountant Member, and also discussed the matter with him in detail. I am unable to persuade myself to agree with the findings recorded by him. In view of this I proceed to record my findings on the issue involved.

The issue involved in the present appeal is about the correctness or otherwise of the action of Assessing Officer (“AO” in short) in respect of charging of interest under s. 234B amounting to Rs. 2,82,59,843.

  1. Facts are not in dispute and my learned Brother has reproduced all the relevant facts. However, to appreciate the issue better, it is advisable to give some facts at the cost of repetition. For asst. yr. 1992-93 the assessee had shown the following income appearing in the P&L a/c attached with the return:
Rs.
(i) Warehousing charges 7,65,76,819
(ii) Supervision charges 27,01,231
(iii) Interest on advances 19,90,541
(iv) Surplus on trading of wheat 8,27,39,992

The assessee claimed the aforesaid income to be exempt under s. 10(29) of the IT Act, 1961 (“the Act” in short) and AO completed the assessment under s. 143(3) on 8th Dec., 1994, by holding that income of Rs. 7,65,76,819 from warehousing charges for storage, processing or facilitating the marketing of commodities was exempt under s. 10(29) of the Act and remaining income was held to be chargeable to tax. The AO also directed the charging of interest under s. 234B and in first appeal before the CIT(A) the assessee did not challenge this action of the AO about charging of interest under s. 234B and against order of the CIT(A) the assessee as well as the Revenue went in appeal before the Tribunal and it was for the first time when assessee raised this issue of charging of interest under s. 234B before the Tribunal by moving an application for permission to raise additional ground and permission was granted by the Tribunal and this issue was restored to AO for deciding it afresh. When this issue came before the AO, he after hearing the assessee in detail concluded that interest under s. 234B was to be charged. In appeal the CIT(A) also confirmed the action of the AO against which the assessee came in second appeal before the Tribunal.

  1. The learned counsel for the assessee submitted that up to the asst. yr. 1991-92 viz., just preceding year the assessee was claiming exemption under s. 10(29) in respect of income from rent of godowns and also in respect of income from procurement of wheat as agent of the Government and the Department had been accepting the case of the assessee and exemption was allowed under s. 10(29) in respect of both types of incomes. Copies of assessment orders for asst. yrs. 1990-91 and 1991-92 had been placed on record to substantiate this plea. The learned counsel submitted that on the basis of earlier assessment orders the assessee also claimed exemption under s. 10(29) of the Act in respect of both types of income viz., income from rent from godowns and income from procurement of wheat for asst. yr.1992-93 but the AO on the basis of decision of Hon’ble Rajasthan High Court in the case of Rajasthan State Warehousing Corpn. (1994) 120 CTR (Raj) 1 : (1994) 210 ITR 906 (Raj) concluded that income derived from procurement of grains for the State Government etc. did not relate, to letting out of godowns or warehouse and it was not exempt under s. 10(29) of the Act. The learned counsel submitted that it was on account of above referred decision which was rendered on 1st Dec., 1993, the assessee’s claim for exemption under s.10(29) in relation to income from procurement of wheat was rejected.
  2. According to the learned counsel prior to 1st Dec.,1993, the date on which the Hon’ble Rajasthan High Court decided the issue against the assessee of that case, the assessee as well as income-tax authorities were treating the income from trading in procurement of wheat etc. as exempt under s. 10(29) of the Act and assessee was justified in having a bona fide belief that such an income was not subject to income-tax and question of payment of any advance tax did not arise. The advance tax, as per the learned counsel for the assessee, shall be payable only when the income is subject to income-tax and in the case in hand the assessee had filed return for asst. yr. 1992-93 much earlier to the decision of Rajasthan High Court and at that time the assessee could not have anticipated that the claim of the assessee seeking exemption under s. 10(29) of the Act in respect of income from trading in procurement of wheat etc. shall be subject to income-tax, nor the assessee could have anticipated whether any of its income was subject to income-tax or any advance tax was payable by him. The learned counsel submitted that in similar circumstances the view of different Benches of the ITAT had been that charging of interest under s. 234B is not warranted. Reliance has been placed by the learned counsel on the decision of ITAT Chandigarh Bench in the case of Dr. (Mrs.) Devinder Kaur Sekhon vs. Asstt. CIT (1998) 67 ITD 407 (Chd) and also on the decision of ITAT Ahmedabad Bench in the case of Vikshara Trading & Investment (P) Ltd. vs. Dy. CIT (1999) 63 TTJ (Ahd) 141 : (1998) 96 Taxman 188 (Ahd) in which explanation of the assessee for not paying the advance tax was treated as justified and charging of interest under s. 234B was held to be not justified. In the last the learned counsel referred to the decision of Hon’ble Supreme Court in the case of J.K. Synthetics vs. CTO (1994) 119 CTR (SC) 222 : (1994) 4 SCC 276 in which their Lordships concluded that in case dealer deposited full amount of tax which, according to him, was due without wilfully omitting any material information and later on additional amount was found to be payable, then dealer would not be liable to pay interest on the additional amount of tax deposited by him under s. 11B of Rajasthan ST Act, 1954. The plea of the learned counsel for the assessee is that ratio of the said decision of Hon’ble High Court is fully applicable to the facts of the present case as in the case of assessee return was filed claiming exemption under s. 10(29) of the Act in respect of the incomes including income from trading in procurement of foodgrains and thus assessee was not supposed to pay any advance tax and thus interest under s. 234B is not chargeable as assessee has not omitted any information in filing the return and was having bona fide basis for not showing the income from trading in procurement of wheat, etc. as its income because the Department had been treating such income as exempt under s.10(29) from so many years. The learned counsel for the assessee submitted that Patna High Court in the case of Ranchi Club Ltd. (supra) had concluded that no interest under s. 234B can be charged in identical circumstances and their Lordships have followed the ratio of apex Court in the case of J.K. Synthetics (supra). On the basis of these facts, the submission of the learned counsel for the assessee had been that assessee was having bona fide belief that it was not liable to pay any advance-tax and thus charging of interest under s. 234B cannot be held to be justified.
  3. As against it the learned Departmental Representative placed reliance on the order of the AO as well as the CIT(A) and main plank of his argument is that provisions of s. 234B of the Act are mandatory and AO has no option but to charge interest under this section if assessee had failed to pay the advance tax and in the case in hand the assessee admittedly had not paid advance tax and thus charging of interest under s. 234B is justified.
  4. After considering the submissions of representative of both parties going through the record carefully, it is to be noted that provisions of ss. 234A, 234B and 234C have been brought on statute by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1st April,1989, under Chapter XVII which is in relation to collection and recovery-interest chargeable. The very heading before the provision of ss. 234A to 234B had been as under:

“F. Interest chargeable in certain cases.”

  1. To appreciate the argument of the learned counsel for the assessee as well as of the learned Departmental Representative. It will be in the fitness of things to reproduce the relevant portion of s. 234B which reads as under :

“234B. Interest for defaults in payment of advance tax.—(1) Subject to the other provisions of this section, where, in any financial year, an assessee who is liable to pay advance tax under s. 208 has failed to pay such tax or, where the advance tax paid by such assessee under the provisions of s. 210 is less than ninety per cent of the assessed tax, the assessee shall be liable to pay simple interest at the rate of two per cent for every month or part of a month comprised in the period from the 1st day of April, next following such financial year to the date of determination of total income under sub-s. (1) of s. 143 and where a regular assessment is made, to the date of such regular assessment, on an amount]equal to the assessed tax or, as the case may be, on the amount by which the advance tax paid as aforesaid falls short of the assessed tax.”

  1. The very heading of s. 234B referred to above shall show that this section is meant for charging of interest for defaults in payment of advance tax. Further, language used by the legislature in bringing this provision is also significant. First part of this section provides- “An assessee who is liable to pay advance tax under s. 208 has failed to pay such tax or,……. “At the very outset it is to be ascertained as to whether the assessee was liable to pay advance tax or not. No doubt up to the asst. yr. 1991-92 the assessee was claiming exemption under s. 10(29) of the Act in respect of both types of incomes viz. income from letting out of godowns and warehouse and income from procurement of wheat, etc. on behalf of the State Government and IT authorities were allowing the claim of the assessee. But fact remains that the assessee as well as of IT authorities both failed to appreciate the correct legal proposition in this context. As is evident that Hon’ble High Court of Rajasthan in the case of Rajasthan State Warehousing Corpn. (supra) had specifically laid down that income from trading of wheat procurement on behalf of the State Government, etc. is not to be treated as exempt under s. 10(29) but the same is taxable. In view of this decision of Rajasthan High Court, it can easily be inferred that income earned by the assessee from trading in wheat procurement was taxable in all the years as legal position for all the assessment years was the same which the Hon’ble High Court of Rajasthan had laid down in the case referred to above. If we apply the above position of law then income from trading in procurement of wheat was taxable since the insertion of s. 10(29) itself and assessee was liable to pay income-tax on Rs. 8,27,39,952 the income shown by the assessee on trading in procurement of wheat and the advance tax shall be payable as per provisions of s. 208 of the Act. Sec. 208 requires that advance tax shall be payable if such tax is Rs. 5,000 or more and in the instant case as assessee had taxable income of Rs. 8,27,39,952, it admittedly was under obligation to pay advance tax of more than Rs. five thousand.
  2. Now comes the later part of s. 234B. It provides that if assessee who is liable to pay advance tax has failed to pay such tax or where advance tax paid by such assessee is less than ninety per cent of the assessed tax, the assessee shall be liable to pay interest at the rate 2 per cent for every month or part thereof. The language used by the Legislature is that “assessee shall be liable to pay simple interest……..”. The word “shall” is significant and to ascertain the very intention of the legislature we have to look into the clauses by which the Legislature has brought s. 234B to the statute through Direct Tax Laws (Amendment) Act, 1987. In this connection the relevant clause inserting s. 234B is reproduced which is appearing at (1988) 67 CTR (St.) 53 : (1987) 168 ITR (St.) 343 and the same is reproduced as under :

“Sec. 234B incorporates the existing provisions of s. 215 and s. 217 with the difference that the new provisions make the charging of interest mandatory. The existing provisions provide for waiver or reduction of interest under rule prescribed in this regard. The new section does not have any such provision.”

  1. From the above it is evident that provisions of s. 234B are mandatory and legislature has made it clear that provisions of s. 234B are quite different from provisions of ss. 215 and 217 in which discretionary powers were provided to the authorities under the Act to charge or not to charge the interest. If any provision of statute is mandatory then it cannot entertain any explanation from either side but the provision has to be applied in its entirety.
  2. The learned counsel for the assessee had taken the only plea that keeping in view the earlier treatment given by the IT authorities to the income of the assessee from trading in procurement of wheat etc. the assessee was justified in entertaining a bona fide belief that such income is also exempt under s. 10(29) of the Act and thus he was justified in not making any payment of advance tax. This explanation cannot be allowed to be entertained in view of the specific nature of provisions of s. 234B which are made mandatory without giving any discretionary power to AO to entertain such explanation from assessee howsoever bona fide explanation may be. It is to be noted that whenever legislature in its wisdom has thought it fit that any explanation of the assessee is to be entertained by the AO before charging interest or before levy of any type of penalty specific provision to that effect had been made in the relevant section and a notice is issued before charging interest or before levy of any penalty and after considering the explanation of the assessee the AO passes the relevant orders of charging interest or levy of penalty or otherwise. But in the provisions of s. 234B no such provision has been made and from clauses attached to the Direct Tax Laws (Amendment) Act, 1987, it is very clear that provisions are mandatory. I may recall a maxim “expressum facit cessare tacitum” and meaning thereof is that when there is express mention of certain thing then anything not mentioned is excluded. If we apply the above maxim to the facts of the case then it becomes abundantly clear that the very nature of provisions of s. 234B is mandatory and entertainment of any explanation of assessee howsoever bona fide, has to be treated as excluded. Applying this, the plea of the assessee that on account of the bona fide belief he could not pay the advance tax is not to be entertained as the same has to be treated as excluded because not expressly provided. If we entertain such an explanation of the assessee then it will amount to adding a new proviso to s. 234B which are impliedly excluded by the legislature in its wisdom. It has been settled proposition of law that Courts/Tribunals are to interpret the existing provisions of law and not supposed to assume the role of Legislature themselves. If we entertain the assessee’s explanation that on account of bona fide belief he was not liable to pay the advance tax then by entertaining such an explanation we will be changing the very nature of s. 234B from mandatory to discretionary and in such process we will be transgressing the jurisdiction of legislature which is not permissible in the eye of law.
  3. The mandatory nature of s. 234B can be examined by another angle and some of the observations of the Hon’ble High Court of Patna in the case of Ranchi Club Ltd. (supra) (relied by learned counsel for the assessee) is relevant. I am reproducing the relevant portion of head note which reads as under :

“Secs. 234A and 234B of the IT Act, 1961, are not penal in nature and, therefore, no element of arbitrariness or violation of rules of natural justice can be imputed to them. They merely provide for payment of interest by an assessee who commits default in furnishing the return either under s. 139(1) or s. 139(4), or in response to a notice under s. 142(1) of the Act, or has either failed to pay the advance tax or the advance tax already paid is less than 90 per cent of the tax assessed against him. The amount on which the interest is levied is the amount which can legitimately be said to be public revenue which, although payable by the assessee, has actually not been paid by him. Levy of interest on such amount which the assessee withholds and makes use of cannot be said to be anything but a compensatory measure meant to offset the loss which the Revenue suffers on account of non-payment of the said amount. This becomes evident also from the fact that the sections contain specific provisos in regard to the period for which this additional liability is imposed on the defaulting assessees.”

  1. From the above it transpires that interests are not penal in nature but only compensatory as the same are leviable because assessee had utilised the amount which was public revenue and payment of interest is nothing but a token in respect of utilisation of the public fund by the assessee. That appears to be the very reason that legislature in its wisdom has made the provision of s. 234B as mandatory and thus I cannot entertain the explanation of the assessee that due to bona fide belief it could not pay the amount of advance tax.
  2. It is also to be observed that some of the assessees had been facing lot of hardship on account of mandatory nature of provisions of ss. 234A, 234B and 234C of the Act and when CBDT came to know the plight of assessees who were having bona fide explanations for not complying with the provisions in filing the return making payment of advance tax, etc. came forward to give relief to some of the assessees and issued Notification F. No. 400/234/95-IT(B) dt. 23rd May, 1996, by which it authorised Chief CITs/Director General (Inv.) to waive penal interest in certain cases. The substance of the Notification stands reported at (1999) 157 CTR (News & Views) 7 and circumstances under which the Chief CITs and Director General (Inv.) had been authorised to waive penal interest for late furnishing of return, non-payment or inadequate payment of advance tax, etc. had been given out. This notification further goes to strengthen the case of the Department that provisions of s.234B are mandatory, otherwise CBDT would not have issued such Notification authorising Chief CITs/Director General (Inv.) to waive penal interest in specified circumstances.
  3. On the basis of above, the only conclusion which could be drawn is that provisions of s. 234B of the Act are mandatory and it gives no room to entertain any type of explanation of assessee and AO has no other alternative but to charge interest.
  4. So far as case laws relied upon by the learned counsel for the assessee are concerned, much reliance has been placed on the decision of J.K. Synthetics (supra) and facts of that case have also been reproduced in detail by my learned Brother along with the ratio of the said decision. But perusal of the facts involved in that case shall reveal that issue involved in that case was entirely different. In that case the assessee had deposited the amount of sales-tax due as required under s.7(2) of the Rajasthan ST Act and question was whether interest under s. 11B as it was existing prior to 1st April, 1979, was leviable on the amount of tax due on return or on assessed tax. Their Lordships after considering all the facts opined in favour of the assessee. But the facts in the case in hand are quite different as we are not supposed to examine as to whether the amount of interest under s. 234B is leviable on the amount of tax due as per return of income or on the amount of assessed income. The simple issue involved in the present case is about the consequence of non-payment of advance tax by the assessee. No doubt the Hon’ble Patna High Court in the case of Ranchi Club Ltd. (supra) had opined that ratio of J.K. Synthetics Ltd. (supra) was applicable to the provisions of ss. 234A and 234B but it may be noted that provisions of ss. 234B were not at issue before their Lordships of Patna High Court in the case referred to above as particular. Issue was of charging of interest under s. 234A and their Lordships opined that provisions of ss. 234A and 234B were not applicable in that case. It may also be mentioned here that the reasoning of their Lordships in the case of Ranchi Club Ltd.(supra) had not been appreciated by the same High Court in a subsequent decision in the case of Uday Mistanna Bhandar vs. CIT (1997) 137 CTR (Pat) 376 :(1996) 222 ITR 44 (Pat)) in which their Lordships have observed that ratio of Ranchi Club Ltd. (supra) had not laid down a correct law and Their Lordships have further observed that said ratio required reconsideration through a larger Bench and matter stands referred to Larger Bench. Their Lordships have also observed that ratio of the apex Court decision in the case of J.K. Synthetics Ltd. (supra) might not be fully applicable while interpreting s. 234A r/w Expln. 4 thereto. Once Their Lordships have observed that ratio of apex Court in the case of J.K. Synthetics Ltd. (supra) is not applicable to the issue involving s. 234A which was having identical provision to s. 7(2) of Rajasthan ST Act, then that ratio shall not at all be applicable to the provisions of s. 234B which had no similarity to the provisions of sales tax in the case of J.K. Synthetics Ltd. (supra). Accordingly, the ratio of both the cases relied upon by the learned counsel are not going to help the assessee.
  5. Further, the decisions of ITAT Chandigarh as well as of Ahmedabad Bench are on the same pattern as adopted by my learned Brother and thus I am not in agreement with the view taken by those Benches as that will amount to adding of a new proviso to s. 234B which will be against the very intention of the legislature.
  6. On the basis of above discussion, I am of the opinion that the view of AO as well as of CIT(A) is justified. Accordingly, I uphold the action of the CIT(A) on the issue in question. In my view, therefore, the appeal of the assessee is to be dismissed. Order accordingly.

ORDER UNDER S. 255(4) OF THE IT ACT, 1961

Since in the captioned case we have difference of opinion, on the following point, the matter is submitted to the Hon’ble President for reference to the Third Member.

“Whether, on the facts and in the circumstances of the case, the assessee could be said to be liable to pay advance tax under s. 208 of the IT Act, 1961 so as to be liable to interest under s. 234B of the Act for its failure to pay the same.”

M.K. CHATURVEDI, J.M. (AS THIRD MEMBER) :

This appeal came before me as a Third Member to express my opinion on the following question :

“Whether, on the facts and in the circumstances of the case, the assessee could be said to be liable to pay advance tax under s. 208 of the IT Act, 1961, so as to be liable to interest under s. 234B of the Act for its failure to pay the same ?”

  1. I have heard the rival submissions in the light of material placed before me and precedents relied upon. Assessee is a warehousing corporation. It was set up under the Warehousing Corporation Act, 1962. Upto the asst. yr. 1991-92 its entire income was held to be exempt by the AO under s. 10(29) of the IT Act, 1961 (hereinafter called “the Act”).
  2. The exemption was granted to the assessee on the basis of the decision of the Hon’ble Allahabad High Court rendered in the case of CIT vs. U.P. State Warehousing Corpn. (1991) 100 CTR (All) 15 : (1992) 195 ITR 273 (All). This decision is dt. 28th March,1991. In this case it was held that the assessee was an authority constituted under the law for the marketing of commodities. The Tribunal had held that income received by it, though called miscellaneous receipts was in truth income derived from letting warehouses for storage, processing and facilitating the marketing of commodities. Commission was received both for procuring and storing wheat and other food articles on behalf of the Food Corporation of India. The assessee’s income from miscellaneous receipts and commission was entitled to exemption under s. 10(29) of the Act.
  3. Assessee was also engaged in the activity of storage and procuring of foodgrains as agent of Food Corporation of India. Following the decision of the Hon’ble High Court the AO allowed the claim of the assessee made under s. 10(29).
  4. It is pertinent to note that the assessee filed its return for the relevant year of assessment in December, 1992. Assessment for the asst. yr. 1991-92 was completed on Nil income on 15th Dec., 1993. Exemption claimed by the assessee under s. 10(29) was fully allowed in the asst. yr. 1991-92. Thereafter Hon’ble Rajasthan High Court decided the issue against the assessee in the case of Rajasthan State Warehousing Corpn. (1994) 120 CTR (Raj) 1 : (1994) 210 ITR 906 (Raj). Hon’ble Rajasthan High Court has held that income independent of letting of godown hall is beyond the ambit of s.10(29). Income derived from procurement of grains, from administrative, overheads, interest received from banks are independent activities, bearing no nexus with letting of godowns or warehousing for facilitating the marketing of commodities. As such, exemption under s. 10(29) cannot be given in relation to those activities. This decision is dt. 1st Dec., 1993. Following this decision the AO disallowed the claim made under s. 10(29). The decision of the Rajasthan High Court was approved by the apex Court vide order dt. 1st April, 1999, reported in the case of Orissa State Warehousing Corpn. vs. CIT (1999) 153 CTR (SC) 177 : (1999) 237 ITR 589 (SC).
  5. It was further pointed out that in Civil Appeal No. 6650 of 1995 in the case of CIT vs. Gujarat State Warehousing Corpn. Ltd., [reported at (2000) 163 CTR (SC) 390] apex Court took note of the decision in Orissa State Warehousing Corpn.’s case (supra). The matter was placed before the Hon’ble Chief Justice for placing the matter before the larger Bench for decision.
  6. The general conspectus of the main plank of Shri Garg’s argument was that the assessee was not liable to pay advance tax. The last date for making the payment of advance tax was 15th March, 1992. The decision of the Rajasthan High Court was delivered on 1st Dec., 1993. As on 15th March, 1992, as per the law laid down by the Hon’ble Allahabad High Court the assessee was not liable to pay advance tax. It was entitled to get exemption under s. 10(29). The Department did accept this position in the preceding year. The assessee was held to be liable of payment of tax as because a different view was taken by Rajasthan High Court. As on the last date for the payment of advance tax the only decision available on the point was of Hon’ble Allahabad High Court. On the strength of this no liability can be passed on the assessee for the payment of advance tax.
  7. Reference was made to the decision of apex Court rendered in the case of CIT vs. Hindustan Electro Graphites Ltd. (2000) 160 CTR (SC) 8 : (2000) 3 SCC 595. In this case the assessee received cash compensatory support from Government. It was not taxable on the date of filing the return. As such it was not included. Subsequently, there was amendment with retrospective effect making cash assistance from Government taxable. Assessment was completed subsequent to the introduction of the provision. Apex Court held that additional tax on the basis of receipt of the cash compensatory support was not valid.
  8. Shri Garg also relied on the decision of the apex Court rendered in the case of J.K. Synthetics Ltd. vs. CTO (1994) 119 CTR (SC) 222 : (1994) 4 SCC 276. In this case the assessee filed the return on the premise that the amount of freight charge in respect of sale of cement did not form part of the sale price for payment of sales-tax. This premise was rejected by the apex Court in the case of Hindustan Sugar Mills. Accordingly, the assessee paid additional sales-tax on inclusion of freight amount in calculating the sale price pursuant to that decision. Hon’ble Supreme Court had held that the assessee was not liable to pay tax under s. 11B on the additional amount of tax on freight.
  9. Shri Garg also invited my attention on the decision of the Tribunal rendered in the case of Vikshara Trading & Investment (P) Ltd. vs. Dy. CIT (1999) 63 TTJ (Ahd) 141 : (1998) 96 Taxman 188 (Ahd). In this case the Tribunal held that interest under s. 234B is not chargeable in a case where return was filed declaring loss which was converted by the AO into income.
  10. Reference was also made to the decision of the Tribunal rendered in the case of Sedco Forest International Drilling Inc. vs. Dy. CIT (2000) 67 TTJ (Del) 670 : (2000) 72 ITD 415 (Del). In this case the assessee was a non-resident company. It received fees for technical services rendered to ONGC. ONGC failed to deduct tax at source. Had ONGC deducted tax at source, the assessee would not be liable to pay advance tax under s. 208. The Tribunal held that assessed tax means tax on total income as reduced by the amount of tax deducted at source. Since ONGC failed to deduct tax at source, the assessee-company could not be fastened with liability to pay interest under s. 234B. Shri Garg also placed reliance on the decision rendered in the case of Dr. (Mrs.) Devinder Kaur Sekhon vs. Asstt. CIT (1998) 67 ITD 407 (Chd). In this case the assessee received certain amount as interest on enhanced compensation. The assessee could not anticipate this receipt. The Tribunal held that there was no failure on the part of the assessee so as to attract the provisions of s. 234B.
  11. The learned Departmental Representative submitted that the provision of s. 10(29) was unambiguous. The assessee was not entitled to get benefit in respect of s. 10(29) on the incomes which it claimed. There was no decision of jurisdictional High Court or of apex Court at the relevant point of time dealing with this issue. As such, the assessee ought to have paid the due tax. It was further argued that the levy of interest under s. 234B is mandatory. Interest charged under s. 234B is compensatory in nature. As such, the assessee cannot be exonerated from the charge of interest.
  12. The defaults, which attract charge of interest under s. 234B, are as under :

(i) Failure to pay advance tax during the financial year which an assessee is liable to pay under s. 208; and

(ii) Payment of advance tax under s. 210 by an assessee, which is less than 90 per cent of the “assessed tax”.

  1. Admittedly upto asst. yr.1991-92 the assessee did get the benefit of s. 10(29) of the Act. It was assessed on Nil income. The exemption was granted on the basis of Allahabad High Court decision in U.P. State Warehousing Corpn.’s case (supra). Till 31st March,1992, this was the only decision available on the point. As no other decision was available, therefore, the Department also accepted this decision. The assessee acted bona fide in conformity with the decision of the High Court. Just because the decision was reversed by the apex Court liability to pay advance tax cannot be fastened on the assessee. At the relevant point of time it was impossible on the part of the assessee to foresee the decision of the Supreme Court on the point. Law is trite on the subject. It is canonized in the well-known common law dictum : “lex non cogit ad impossibilia”[law cannot compel you to do the impossible].
  2. I am inclined to agree with the argument of the learned Departmental Representative that s. 234B is mandatory in nature. But before invoking s.234B it is also essential to see that whether the assessee comes within the sweep of this section. The condition precedent for invoking the provisions of s. 234B are that the assessee must be fastened with the liability to pay advance tax under s. 208. Taking into consideration the entire conspectus of the case, I am of the opinion that the assessee was not liable to make the payment of advance tax. The case of the assessee falls beyond the ken of s. 208 of the Act. As such, it is not coming within the ambit of s. 234B of the Act. Therefore, I am inclined to agree with the view taken by the learned Accountant Member.
  3. The matter will now go before the regular Bench for deciding the appeal in accordance with the opinion of the majority.

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