Assistant Commissioner of Vs. Tesla Transformers (P) Ltd - Court Judgment

Excerpt:
1. these appeals are preferred by the revenue against the order of the cit(a) pertaining to the asst. yrs. 1990-91 and 1991-92 on the common grounds. since common issue is involved, these appeals were heard together and are being disposed of by this consolidated order for the sake of convenience.2. the consolidated order of the cit(a) for the asst. yrs. 1990-91 and 1991-92 is assailed by the revenue on the following common grounds : "on the facts and in the circumstances of the case, the learned cit(a) erred in law in holding that when the total income assessed under s. 143(3) is in excess of the total income computed under s. 143(1)(a), interest under s. 234b is not chargeable in respect of such excess being restricted per law, as held by him, to as chargeable in respect of the total income computed under s. 143(1)(a). the significance of the words 'or regular assessment' occurring in s. 234b(1) and again in expln. 1(b) thereto appears to have been missed by the learned cit(a)." 3. we have heard the rival submissions of the parties and carefully perused the orders of the authorities below and the documents placed on record.4. the facts relating to the issue are that the order was passed for the asst. yrs. 1990-91 and 1991-92 under s. 143(1)(a) on 27th august, 1991 and 27th march, 1992 and interest under s. 234b was charged at rs. 6,364 and rs. 7,053 for the asst. yrs. 1990-91 and 1991-92, respectively, in the intimation issued under s. 143(1)(a) of the act.the assessee was subsequently assessed under s. 143(3) of the act for the asst. yrs. 1990-91 and 1991-92 on 28th february, 1992 and 31st march, 1992, respectively, whereupon the interest under s. 234b was increased to rs. 23,096 and rs. 14,616 for the asst. yrs. 1990-91 and 1991-92, respectively. the enhancement in the interest charged under s.234b of the act was challenged by the assessee through an application filed under s. 154 of the act stating therein that the ao has no power to increase or decrease interest which has been levied under intimation issued under s. 143(1)(a) of the act. rejecting the contention of the assessee, the ao held that the assessment order passed under s. 143(3) of the act is a final order determining the total income of the assessee; as such the interest under s. 234b is to be charged on the income assessed under s. 143(3) of the act and not with reference to the intimation issued under s. 143(1)(a) of the act. these findings of the ao were challenged before the cit(a) and the cit(a) relying upon its earlier order for the asst. yr. 1989-90 directed the ao to restrict the charging of interest on the basis of assessment made under s.143(1)(a) of the act.5. before us, the learned departmental representative, shri brijesh gupta, strenuously argued that the interest under s. 234b of the act is to be charged on an amount equal to the assessed tax worked out either under s. 143(1) or under s. 143(3) upto the date of determination of the total income under s. 143(1) of the act and where the regular assessment is made under s. 143(3) of the act to the date of such regular assessment. with the intent to remove any sort of ambiguity, the legislature has brought necessary amendment in s. 234b of the act by the direct tax laws (amendment) act, 1989 w.e.f. 1st april, 1989 whereby the legislature has introduced the word "and where a regular assessment is made, to the date of such regular assessment" in place of the words "or regular assessment". by doing so, the legislature has clarified its intention that in case of regular assessment under s.143(3) the interest under s. 234b is to be charged to the date of such regular assessment, though it was already charged under s. 143(1) while issuing an intimation under s. 143(1)(a) of the act, on an amount equal to the assessed tax determined under regular assessment, on the amount by which the advance tax paid falls short of the assessed tax. mr.brijesh gupta further invited our attention to the provisions of sub-s.(3) of s. 234b of the act and contended that if the amount on which the interest was payable under sub-s. (1) is increased as a result of an order of reassessment or recomputation under s. 147 of the act, the assessee shall be liable to pay interest for a period commencing on the day following the date of determination of the total income under sub-s. (1) of s. 143 and where a regular assessment is made is referred to in sub-s. (1), following the date of such regular assessment and ending on the date of reassessment or recomputation under s. 147 on the amount by which the total income determined on the basis of the reassessment or recomputation exceeds the tax on the total income determined. under sub-s. (1) of s. 143 or on the basis of the regular assessment.6. our attention was further invited by the learned departmental representative to sub-s. (4) whereby if an amount on which interest was payable under sub-s. (1) or sub-s. (3) has been increased or reduced, as the case may be, as a result of an order under s. 154 or s. 155 or s. 250 or s. 254 or s. 260 of s. 262 or s. 263 or s. 264 or an order of the settlement commission under sub-s. (4) of s. 245d, the interest shall be increased or reduced accordingly. from a comprehensive study of s. 234b of the act, it can be easily understood that the legislature has brought necessary amendment by the direct tax laws (amendment) act, 1989 w.e.f. 1st april, 1989 to remove ambiguity, if any, in this section and to allow the revenue to charge interest under s. 234b of the act till the date of regular assessment framed under s. 143(3) of the act despite intimation issued under s. 143(1)(a) of the act in which the interest under s. 234b of the act was charged 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.the learned departmental representative further contended that since the interest under this section shall be charged for a period commencing on the day following the date of determination of the total income under sub-s. (1) of s. 143 and where a regular assessment is made under s. 143(3) following the date of such regular assessment to the date on which the reassessment or recomputation under s. 147 is made under sub-s. (3) of this section and shall also be increased and reduced according to the amount, on which the interest was payable under sub-s. (1) or sub-s. (3) which has been reduced or increased, as the case may be, as a result of the orders passed under various sections enumerated in sub-s. (4) of this section. there is no reason as to why interest shall not be charged upto the date of regular assessment made under s. 143(3) of the act if it was framed after the intimation issued under s. 143(1)(a) of the act in which the interest under this section was charged. he further contended that the interest is compensatory in nature and it shall be paid when it is found that the assessee has paid the advance tax less than 90 per cent of the assessed tax.7. the learned counsel for the assessee, on the other hand, contended that once the ao charged interest under s. 234b of the act, he has no power to increase the same while framing the regular assessment under s. 143(3) of the act. he further contended that had it been the intention of the legislature to empower the ao to increase the interest under s. 234b of the act during the regular assessment framed after the intimation issued under s. 143(1)(a), there would have been a specific mention of s. 143(3) in sub-s. (4) of s. 234b of the act along with other sections. its conspicuous absence from this section lead only one interpretation that the legislature never intended to empower the ao to increase the interest in the regular assessment if framed after the intimation issued under s. 143(1)(a) of the act. the learned counsel for the assessee further contended that the legislature was quite conscious in using proper word at a proper place. since s. 234b is a charging section, it should be construed strictly. in support of his contention, he relied on the judgment of the apex court in the case of j.k. synthetics vs. cto in which their lordships have held that ordinarily the charging section which fixes the liability is strictly construed but that rule of strict construction is not extended to the machinery provisions which are construed like any other statute. the machinery provisions must no doubt be so as would effectuate the object and purpose of the statute and not to defeat the same. reliance on the judgment of the apex court in the case of a. v. fernandez vs. state of kerala air 1957 sc 657 is also placed in which their lordships have held that in construing a fiscal statute and in determining the liability of the subject to tax, one must have regard to the strictness of the law and not merely to the spirit of the statute or the substance of the law. if the revenue satisfies the court that the case falls strictly within the provisions of the law, the subject can be taxed if, on the other hand, the case is not covered within the four corners of the provisions of taxing statute, no tax can be imposed by inference or by analogy or by trying to probe into the intention of the legislature and by considering what was the substance of the matter. mr. jain further relied on the judgment of the apex court in the case of nalinakhya bysack vs. shyam sunder haldar air 1953 sc 148 in which their lordships have held that it is not competent to any court to proceed upon the assumption that the legislature has made a mistake.the court must proceed on the footing that the legislature intended what it has said. even if there is some defect in the phraseology used by the legislature, the court cannot aid the legislature's defective phrasing of an act or add and amend or, by construction, make up deficiencies which are left in the act. even where there is a casus omissus, it is for others than the courts to remedy the defect. mr.jain further invited our attention to the judgment of the apex court in the case of hira devi vs. district board, shahjahanpur air 1952 sc 362 in which their lordships have held that no doubt it is the duty of the court to try and harmonise the various provisions of an act passed by the legislature but it is certainly not the duty of the court to stretch the words used by the legislature to fill in gaps or omissions in the provisions of an act. mr. jain further argued that since there is no specific mention in the charging section about the increase in interest, if already charged under the intimation, during regular assessment framed under s. 143(3) of the act, the ao is precluded from enhancing the interest under s. 234b of the act.8. we have given a thoughtful consideration to the submissions of the rival parties and carefully perused s. 234b of the act. since the main controversy has been raised with regard to the construction of phraseology used by the legislature under sub-s. (1) of s. 234b of the act, we feel it proper to reproduce the entire section for its comprehensive study : "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. (a) for the purposes of computing the interest payable under s. 140a, the tax on the total income as declared in the return referred to in that section. (b) in any other case, the tax on the total income determined under sub-s. (1) of s. 143 or on regular assessment, as reduced by the amount of tax deducted or collected at source in accordance with the provisions of chapter xvii on any income which is subjected to such deduction or collection and which is taken into account in computing such total income. explanation 2. - where in relation to an assessment year, an assessment is made for the first time under s. 147, the assessment so made shall be regarded as a regular assessment for the purposes of this section. explanation 3. - in expln. 1 and in sub-s. (3), "tax on the total income determined under sub-s. (1) of s. 143" shall not include the additional income-tax, if any, payable under s. 143. (2) where, before the date of determination of total income under sub-s. (1) of s. 143 or completion of a regular assessment, tax is paid by the assessee under s. 140a or otherwise - (i) interest shall be calculated in accordance with the foregoing provisions of this section upto the date on which the tax is so paid and reduced by the interest, if any, paid under s. 140a towards the interest chargeable under this section. (ii) thereafter, interest shall be calculated at the rate aforesaid on the amount by which the tax so paid together with the advance tax paid falls short of the assessed tax. (3) where, as a result of an order of assessment or recomputation under s. 147, the amount on which interest was payable under sub-s. (1) is increased, 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 commencing on the day following the date of determination of total income under sub-s. (1) of s. 143 and where a regular assessment is made as is referred to in sub-s. (1) following the date of such regular assessment and ending on the date of the reassessment or recomputation under s. 147, on the amount by which the tax on the total income determined on the basis of the reassessment or recomputation exceeds the tax on the total income determined under sub-s. (1) of s. 143 or on the basis of the regular assessment aforesaid. (4) where, as a result of an order under s. 154 or s. 155 or s. 250 or s. 254 or s. 260 or s. 262 or s. 263 or s. 264 or an order of the settlement commission under sub-s. (4) of s. 245d, the amount on which interest was payable under sub-s. (1) or sub-s. (3) has been increased or reduced, as the case may be, the interest shall be increased or reduced accordingly, and - (i) in the case where the interest is increased, the ao shall serve on the assessee a notice of demand in the prescribed form specifying the sum payable and such notice of demand shall be deemed to be a notice under s. 156 and the provisions of this act shall apply accordingly; (ii) in a case where the interest is reduced, the excess interest paid, if any, shall be refunded. (5) the provisions of this section shall apply in respect of assessments for the assessment year commencing on the 1st day of april, 1989 and subsequent assessment years.9. from a bare reading of this section it appears to us that the legislature has prescribed different terminus period upto which interest under this section for default in payment of advance-tax should be charged in different sub-sections of this section under different circumstances. more particularly sub-s. (1) deals with the terminus period for those cases in which the assessment was made under sub-s. (1) of s. 143 and where a regular assessment is framed after the intimation under s. 143(3) of the act. in case of an intimation issued under s. 143(1)(a) the interest is to be charged for every month or part of a month comprised in the period from first day of april next following the such financial year to the date of determination of total income under sub-s. (1) of s. 143 of the act and in the latter case the interest is to be charged upto the date of regular assessment though it was framed after the intimation issued under s. 143(1)(a) of the act in which the interest under this section has already been charged. during the course of regular assessment the revised interest would be worked out and after giving a credit of interest paid in response to intimation issued under s. 143(1)(a) of the act, the balance will be charged. the other sub-sections of this section also deal with the terminus period for computing the interest under this section under different circumstances. since the interest under this section shall be increased or reduced even in consequence to the order of reassessment under s. 147 or as a result of an order under ss. 154, 155, 250, 254, 260, 262, 263, 264, 245d(4), it cannot be accepted that the interest under this section cannot be increased or reduced in regular assessment framed after the intimation issued under s. 143(1)(a) of the act by any stretch of imagination. similar view was also expressed in the commentary of income-tax written by d. m. harish at p. nos. 8955 to 8958 in viith volume. dealing with the object of insertion of this section by the taxation laws (amendment) act, 1987 w.e.f. 1st april, 1989, it has been stated in clear words that the amendment brought by the direct tax law (amendment) act, 1989 w.e.f. 1st april, 1989 has introduced provisions for charging of interest in both the circumstances, namely, where the summary assessment under s. 143(1) is made and where it is followed by a regular assessment under s. 143(3) of the act. with the intent to clarify any ambiguity in the construction of this sub-section, another amendment was made by the finance act, 1995 w.e.f. 1st april, 1989. while explaining the necessity of this amendment, the explanatory memorandum to the finance bill, 1995 stated as under : "the legislative intention is that the interest for default in payment of advance tax is to be charged till the date of the determination of total income under s. 143(1) and where a regular assessment is made, till the date of such assessment. however, on the basis of the language used in s. 234b, a view has been taken in certain quarters that if interest has already been charged in a case till the date of determination of total income under s. 143(1), the ao cannot further levy the interest till the date of regular assessment. in order to set the aforesaid doubts at rest, the bill seeks to amend s. 234b to clarify that an assessee shall be liable to pay interest for default in payment of advance tax till the determination of the total income under s. 143(1) and where a regular assessment is made, till the date of such assessment". this legislative intention has been achieved by the substitution of the word 'and' for 'or' in sub-s. (1). as a result of the amendment, the defaulting assessee shall be liable to pay interest for default in payment of advance tax till the determination of total income under s. 143(1) and where regular assessment is made till the date of such regular assessment." 10. the above legislative intention has been achieved by substitution of the word "and" for "or" in sub-s. (1). as a result of the amendment, the defaulting assessee shall be liable to pay interest for the default in payment of advance tax till the determination of total income under s. 143(1) and where regular assessment is made, till the date of such regular assessment. while dealing with the terminus period for charging of interest under this section, it has been specified in the aforesaid book that where the income is determined under s. 143(1), but no regular assessment is made under s. 143(3) or 144 or with or without there being any notice under s. 143(2) and/or 142(1), the terminus period shall be upto the determination of the total income under s.143(1). in other situation, where a regular assessment is made under s.143(3) or 144, in addition to the determination of total income under s. 143(1), the terminus period shall be upto the date of regular assessment under s. 143(3) or 144.11. we have also come across the judgment of the special bench of the tribunal in the case of sahitya mudranalaya (p) ltd. 79 taxman 463 in which it has been held that the ao can levy interest under s. 234b of the act upto the date of determination of the total income under s.143(1) and in case where he subsequently completes the assessment under s. 143(3), he can levy interest under s. 234b after giving credit for the interest already collected at the stage of filing of the return and also at the stage of assessment under s. 143(1). moreover, it is settled rule of interpretation of a statute that the expression used therein should ordinarily be understood, in which they best harmonize with the object of the statute and which effectuate the object of the legislation. since the phraseology used in sub-s. (1) of s. 234b is quite unambiguous and its object of insertion was also clarified through an explanatory memorandum to the finance bill, 1995 whereby only one interpretation is possible that the ao can charge interest under this section in a regular assessment under s. 143(3) framed even after the issuance of intimation under s. 143(1)(a) of the act, in which the interest upto the date of determination of the total income therein has already been charged, the contention of the assessee that no interest can be charged or increased in a regular assessment framed after the intimation in which the interest under s. 234b has been charged, is not acceptable to us by any stretch of imagination.12. we have also carefully perused the judgments of the apex court referred to by the learned counsel for the assessee with regard to rule of interpretation, but we do not find any assistance therefrom in favour of the assessee, as by applying the strict interpretation of this section, no other interpretation except discussed hereinabove, is possible.13. having regard to the above observations, we are of the considered opinion that the cit(a) has wrongly applied the ratio laid down in the case of j.k. synthetics ltd. vs. cto (supra) to the facts of the instant case. in these circumstances, we set aside the order of the cit(a) and restore the order of the ao.

Judgment:
1. These appeals are preferred by the Revenue against the order of the CIT(A) pertaining to the asst. yrs. 1990-91 and 1991-92 on the common grounds. Since common issue is involved, these appeals were heard together and are being disposed of by this consolidated order for the sake of convenience.

2. The consolidated order of the CIT(A) for the asst. yrs. 1990-91 and 1991-92 is assailed by the Revenue on the following common grounds : "On the facts and in the circumstances of the case, the learned CIT(A) erred in law in holding that when the total income assessed under s. 143(3) is in excess of the total income computed under s.

143(1)(a), interest under s. 234B is not chargeable in respect of such excess being restricted per law, as held by him, to as chargeable in respect of the total income computed under s.

143(1)(a). The significance of the words 'or regular assessment' occurring in s. 234B(1) and again in Expln. 1(b) thereto appears to have been missed by the learned CIT(A)." 3. We have heard the rival submissions of the parties and carefully perused the orders of the authorities below and the documents placed on record.

4. The facts relating to the issue are that the order was passed for the asst. yrs. 1990-91 and 1991-92 under s. 143(1)(a) on 27th August, 1991 and 27th March, 1992 and interest under s. 234B was charged at Rs. 6,364 and Rs. 7,053 for the asst. yrs. 1990-91 and 1991-92, respectively, in the intimation issued under s. 143(1)(a) of the Act.

The assessee was subsequently assessed under s. 143(3) of the Act for the asst. yrs. 1990-91 and 1991-92 on 28th February, 1992 and 31st March, 1992, respectively, whereupon the interest under s. 234B was increased to Rs. 23,096 and Rs. 14,616 for the asst. yrs. 1990-91 and 1991-92, respectively. The enhancement in the interest charged under s.

234B of the Act was challenged by the assessee through an application filed under s. 154 of the Act stating therein that the AO has no power to increase or decrease interest which has been levied under intimation issued under s. 143(1)(a) of the Act. Rejecting the contention of the assessee, the AO held that the assessment order passed under s. 143(3) of the Act is a final order determining the total income of the assessee; as such the interest under s. 234B is to be charged on the income assessed under s. 143(3) of the Act and not with reference to the intimation issued under s. 143(1)(a) of the Act. These findings of the AO were challenged before the CIT(A) and the CIT(A) relying upon its earlier order for the asst. yr. 1989-90 directed the AO to restrict the charging of interest on the basis of assessment made under s.

143(1)(a) of the Act.

5. Before us, the learned Departmental Representative, Shri Brijesh Gupta, strenuously argued that the interest under s. 234B of the Act is to be charged on an amount equal to the assessed tax worked out either under s. 143(1) or under s. 143(3) upto the date of determination of the total income under s. 143(1) of the Act and where the regular assessment is made under s. 143(3) of the Act to the date of such regular assessment. With the intent to remove any sort of ambiguity, the legislature has brought necessary amendment in s. 234B of the Act by the Direct Tax Laws (Amendment) Act, 1989 w.e.f. 1st April, 1989 whereby the legislature has introduced the word "and where a regular assessment is made, to the date of such regular assessment" in place of the words "or regular assessment". By doing so, the legislature has clarified its intention that in case of regular assessment under s.

143(3) the interest under s. 234B is to be charged to the date of such regular assessment, though it was already charged under s. 143(1) while issuing an intimation under s. 143(1)(a) of the Act, on an amount equal to the assessed tax determined under regular assessment, on the amount by which the advance tax paid falls short of the assessed tax. Mr.

Brijesh Gupta further invited our attention to the provisions of sub-s.

(3) of s. 234B of the Act and contended that if the amount on which the interest was payable under sub-s. (1) is increased as a result of an order of reassessment or recomputation under s. 147 of the Act, the assessee shall be liable to pay interest for a period commencing on the day following the date of determination of the total income under sub-s. (1) of s. 143 and where a regular assessment is made is referred to in sub-s. (1), following the date of such regular assessment and ending on the date of reassessment or recomputation under s. 147 on the amount by which the total income determined on the basis of the reassessment or recomputation exceeds the tax on the total income determined. Under sub-s. (1) of s. 143 or on the basis of the regular assessment.

6. Our attention was further invited by the learned Departmental Representative to sub-s. (4) whereby if an amount on which interest was payable under sub-s. (1) or sub-s. (3) has been increased or reduced, as the case may be, as a result of an order under s. 154 or s. 155 or s. 250 or s. 254 or s. 260 of s. 262 or s. 263 or s. 264 or an order of the Settlement Commission under sub-s. (4) of s. 245D, the interest shall be increased or reduced accordingly. From a comprehensive study of s. 234B of the Act, it can be easily understood that the legislature has brought necessary amendment by the Direct Tax Laws (Amendment) Act, 1989 w.e.f. 1st April, 1989 to remove ambiguity, if any, in this section and to allow the Revenue to charge interest under s. 234B of the Act till the date of regular assessment framed under s. 143(3) of the Act despite intimation issued under s. 143(1)(a) of the Act in which the interest under s. 234B of the Act was charged 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.

The learned Departmental Representative further contended that since the interest under this section shall be charged for a period commencing on the day following the date of determination of the total income under sub-s. (1) of s. 143 and where a regular assessment is made under s. 143(3) following the date of such regular assessment to the date on which the reassessment or recomputation under s. 147 is made under sub-s. (3) of this section and shall also be increased and reduced according to the amount, on which the interest was payable under sub-s. (1) or sub-s. (3) which has been reduced or increased, as the case may be, as a result of the orders passed under various sections enumerated in sub-s. (4) of this section. There is no reason as to why interest shall not be charged upto the date of regular assessment made under s. 143(3) of the Act if it was framed after the intimation issued under s. 143(1)(a) of the Act in which the interest under this section was charged. He further contended that the interest is compensatory in nature and it shall be paid when it is found that the assessee has paid the advance tax less than 90 per cent of the assessed tax.

7. The learned counsel for the assessee, on the other hand, contended that once the AO charged interest under s. 234B of the Act, he has no power to increase the same while framing the regular assessment under s. 143(3) of the Act. He further contended that had it been the intention of the legislature to empower the AO to increase the interest under s. 234B of the Act during the regular assessment framed after the intimation issued under s. 143(1)(a), there would have been a specific mention of s. 143(3) in sub-s. (4) of s. 234B of the Act along with other sections. Its conspicuous absence from this section lead only one interpretation that the legislature never intended to empower the AO to increase the interest in the regular assessment if framed after the intimation issued under s. 143(1)(a) of the Act. The learned counsel for the assessee further contended that the legislature was quite conscious in using proper word at a proper place. Since s. 234B is a charging section, it should be construed strictly. In support of his contention, he relied on the judgment of the apex Court in the case of J.K. Synthetics vs. CTO in which their Lordships have held that ordinarily the charging section which fixes the liability is strictly construed but that rule of strict construction is not extended to the machinery provisions which are construed like any other statute. The machinery provisions must no doubt be so as would effectuate the object and purpose of the statute and not to defeat the same. Reliance on the judgment of the apex Court in the case of A. V. Fernandez vs. State of Kerala AIR 1957 SC 657 is also placed in which their Lordships have held that in construing a fiscal statute and in determining the liability of the subject to tax, one must have regard to the strictness of the law and not merely to the spirit of the statute or the substance of the law. If the Revenue satisfies the Court that the case falls strictly within the provisions of the law, the subject can be taxed if, on the other hand, the case is not covered within the four corners of the provisions of taxing statute, no tax can be imposed by inference or by analogy or by trying to probe into the intention of the legislature and by considering what was the substance of the matter. Mr. Jain further relied on the judgment of the apex Court in the case of Nalinakhya Bysack vs. Shyam Sunder Haldar AIR 1953 SC 148 in which their Lordships have held that it is not competent to any Court to proceed upon the assumption that the legislature has made a mistake.

The Court must proceed on the footing that the legislature intended what it has said. Even if there is some defect in the phraseology used by the legislature, the Court cannot aid the legislature's defective phrasing of an Act or add and amend or, by construction, make up deficiencies which are left in the Act. Even where there is a casus omissus, it is for others than the Courts to remedy the defect. Mr.

Jain further invited our attention to the judgment of the apex Court in the case of Hira Devi vs. District Board, Shahjahanpur AIR 1952 SC 362 in which their Lordships have held that no doubt it is the duty of the Court to try and harmonise the various provisions of an Act passed by the legislature but it is certainly not the duty of the Court to stretch the words used by the legislature to fill in gaps or omissions in the provisions of an Act. Mr. Jain further argued that since there is no specific mention in the charging section about the increase in interest, if already charged under the intimation, during regular assessment framed under s. 143(3) of the Act, the AO is precluded from enhancing the interest under s. 234B of the Act.

8. We have given a thoughtful consideration to the submissions of the rival parties and carefully perused s. 234B of the Act. Since the main controversy has been raised with regard to the construction of phraseology used by the legislature under sub-s. (1) of s. 234B of the Act, we feel it proper to reproduce the entire section for its comprehensive study : "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.

(a) for the purposes of computing the interest payable under s.

140A, the tax on the total income as declared in the return referred to in that section.

(b) in any other case, the tax on the total income determined under sub-s. (1) of s. 143 or on regular assessment, as reduced by the amount of tax deducted or collected at source in accordance with the provisions of Chapter XVII on any income which is subjected to such deduction or collection and which is taken into account in computing such total income.

Explanation 2. - Where in relation to an assessment year, an assessment is made for the first time under s. 147, the assessment so made shall be regarded as a regular assessment for the purposes of this section.

Explanation 3. - In Expln. 1 and in sub-s. (3), "tax on the total income determined under sub-s. (1) of s. 143" shall not include the additional income-tax, if any, payable under s. 143.

(2) Where, before the date of determination of total income under sub-s. (1) of s. 143 or completion of a regular assessment, tax is paid by the assessee under s. 140A or otherwise - (i) interest shall be calculated in accordance with the foregoing provisions of this section upto the date on which the tax is so paid and reduced by the interest, if any, paid under s. 140A towards the interest chargeable under this section.

(ii) thereafter, interest shall be calculated at the rate aforesaid on the amount by which the tax so paid together with the advance tax paid falls short of the assessed tax.

(3) Where, as a result of an order of assessment or recomputation under s. 147, the amount on which interest was payable under sub-s.

(1) is increased, 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 commencing on the day following the date of determination of total income under sub-s. (1) of s. 143 and where a regular assessment is made as is referred to in sub-s. (1) following the date of such regular assessment and ending on the date of the reassessment or recomputation under s. 147, on the amount by which the tax on the total income determined on the basis of the reassessment or recomputation exceeds the tax on the total income determined under sub-s. (1) of s. 143 or on the basis of the regular assessment aforesaid.

(4) Where, as a result of an order under s. 154 or s. 155 or s. 250 or s. 254 or s. 260 or s. 262 or s. 263 or s. 264 or an order of the Settlement Commission under sub-s. (4) of s. 245D, the amount on which interest was payable under sub-s. (1) or sub-s. (3) has been increased or reduced, as the case may be, the interest shall be increased or reduced accordingly, and - (i) in the case where the interest is increased, the AO shall serve on the assessee a notice of demand in the prescribed form specifying the sum payable and such notice of demand shall be deemed to be a notice under s. 156 and the provisions of this Act shall apply accordingly; (ii) in a case where the interest is reduced, the excess interest paid, if any, shall be refunded.

(5) The provisions of this section shall apply in respect of assessments for the assessment year commencing on the 1st day of April, 1989 and subsequent assessment years.

9. From a bare reading of this section it appears to us that the legislature has prescribed different terminus period upto which interest under this section for default in payment of advance-tax should be charged in different sub-sections of this section under different circumstances. More particularly sub-s. (1) deals with the terminus period for those cases in which the assessment was made under sub-s. (1) of s. 143 and where a regular assessment is framed after the intimation under s. 143(3) of the Act. In case of an intimation issued under s. 143(1)(a) the interest is to be charged for every month or part of a month comprised in the period from first day of April next following the such financial year to the date of determination of total income under sub-s. (1) of s. 143 of the Act and in the latter case the interest is to be charged upto the date of regular assessment though it was framed after the intimation issued under s. 143(1)(a) of the Act in which the interest under this section has already been charged. During the course of regular assessment the revised interest would be worked out and after giving a credit of interest paid in response to intimation issued under s. 143(1)(a) of the Act, the balance will be charged. The other sub-sections of this section also deal with the terminus period for computing the interest under this section under different circumstances. Since the interest under this section shall be increased or reduced even in consequence to the order of reassessment under s. 147 or as a result of an order under ss. 154, 155, 250, 254, 260, 262, 263, 264, 245D(4), it cannot be accepted that the interest under this section cannot be increased or reduced in regular assessment framed after the intimation issued under s. 143(1)(a) of the Act by any stretch of imagination. Similar view was also expressed in the Commentary of Income-tax written by D. M. Harish at p. nos. 8955 to 8958 in VIIth volume. Dealing with the object of insertion of this section by the Taxation Laws (Amendment) Act, 1987 w.e.f. 1st April, 1989, it has been stated in clear words that the amendment brought by the Direct Tax Law (Amendment) Act, 1989 w.e.f. 1st April, 1989 has introduced provisions for charging of interest in both the circumstances, namely, where the summary assessment under s. 143(1) is made and where it is followed by a regular assessment under s. 143(3) of the Act. With the intent to clarify any ambiguity in the construction of this sub-section, another amendment was made by the Finance Act, 1995 w.e.f. 1st April, 1989. While explaining the necessity of this amendment, the Explanatory Memorandum to the Finance Bill, 1995 stated as under : "The legislative intention is that the interest for default in payment of advance tax is to be charged till the date of the determination of total income under s. 143(1) and where a regular assessment is made, till the date of such assessment. However, on the basis of the language used in s. 234B, a view has been taken in certain quarters that if interest has already been charged in a case till the date of determination of total income under s. 143(1), the AO cannot further levy the interest till the date of regular assessment. In order to set the aforesaid doubts at rest, the Bill seeks to amend s. 234B to clarify that an assessee shall be liable to pay interest for default in payment of advance tax till the determination of the total income under s. 143(1) and where a regular assessment is made, till the date of such assessment". This legislative intention has been achieved by the substitution of the word 'and' for 'or' in sub-s. (1). As a result of the amendment, the defaulting assessee shall be liable to pay interest for default in payment of advance tax till the determination of total income under s. 143(1) and where regular assessment is made till the date of such regular assessment." 10. The above legislative intention has been achieved by substitution of the Word "and" for "or" in sub-s. (1). As a result of the amendment, the defaulting assessee shall be liable to pay interest for the default in payment of advance tax till the determination of total income under s. 143(1) and where regular assessment is made, till the date of such regular assessment. While dealing with the terminus period for charging of interest under this section, it has been specified in the aforesaid book that where the income is determined under s. 143(1), but no regular assessment is made under s. 143(3) or 144 or with or without there being any notice under s. 143(2) and/or 142(1), the terminus period shall be upto the determination of the total income under s.

143(1). In other situation, where a regular assessment is made under s.

143(3) or 144, in addition to the determination of total income under s. 143(1), the terminus period shall be upto the date of regular assessment under s. 143(3) or 144.

11. We have also come across the judgment of the Special Bench of the Tribunal in the case of Sahitya Mudranalaya (P) Ltd. 79 Taxman 463 in which it has been held that the AO can levy interest under s. 234B of the Act upto the date of determination of the total income under s.

143(1) and in case where he subsequently completes the assessment under s. 143(3), he can levy interest under s. 234B after giving credit for the interest already collected at the stage of filing of the return and also at the stage of assessment under s. 143(1). Moreover, it is settled rule of interpretation of a statute that the expression used therein should ordinarily be understood, in which they best harmonize with the object of the statute and which effectuate the object of the legislation. Since the phraseology used in sub-s. (1) of s. 234B is quite unambiguous and its object of insertion was also clarified through an explanatory Memorandum to the Finance Bill, 1995 whereby only one interpretation is possible that the AO can charge interest under this section in a regular assessment under s. 143(3) framed even after the issuance of intimation under s. 143(1)(a) of the Act, in which the interest upto the date of determination of the total income therein has already been charged, the contention of the assessee that no interest can be charged or increased in a regular assessment framed after the intimation in which the interest under s. 234B has been charged, is not acceptable to us by any stretch of imagination.

12. We have also carefully perused the judgments of the apex Court referred to by the learned counsel for the assessee with regard to rule of interpretation, but we do not find any assistance therefrom in favour of the assessee, as by applying the strict interpretation of this section, no other interpretation except discussed hereinabove, is possible.

13. Having regard to the above observations, we are of the considered opinion that the CIT(A) has wrongly applied the ratio laid down in the case of J.K. Synthetics Ltd. vs. CTO (supra) to the facts of the instant case. In these circumstances, we set aside the order of the CIT(A) and restore the order of the AO.