2012 (11) TMI 1097 - AT - Income Tax

Summary

Issues involved:
The issues involved in this case are the applicability of Section 234D for Assessment Year 1997-98 and whether interest charge u/s 234D should be deleted.

Summary:

Issue 1: Applicability of Section 234D for Assessment Year 1997-98
The appeal by the revenue was against the order of the ld. CIT (A) dated 13.06.2012 regarding the applicability of Section 234D for Assessment Year 1997-98. The revenue contended that Section 234D was applicable from Assessment Year 2004-05 onwards, while the assessee argued that it did not apply to the year under consideration. The Ld. CIT (A) held that Section 234D was not applicable for Assessment Year 1997-98, directing the Assessing Officer to delete the interest charged u/s 234D. The revenue appealed against this decision.

Issue 2: Deletion of Interest Charge u/s 234D
The return of income was filed in 1997, and a refund was issued to the assessee in 1998. Subsequently, an assessment was made in 2006, and interest u/s 234D was charged. The assessee appealed, arguing that Section 234D was introduced in 2003 and applied from 2004-05 onwards. The Ld. CIT (A) agreed with the assessee and directed the deletion of the interest charged u/s 234D. The revenue contended that Explanation 2 inserted in Section 234D with retrospective effect from 01.06.2003 made the section applicable to all Assessment Years before that date. After considering the submissions and relevant case laws, the Tribunal reversed the Ld. CIT (A)'s order, holding that Section 234D applied to Assessment Year 1997-98. The appeal filed by the revenue was allowed.

In conclusion, the Tribunal ruled in favor of the revenue, holding that Section 234D was applicable for Assessment Year 1997-98, and the interest charge u/s 234D should not be deleted based on the retrospective effect of the amendment.