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2014 (5) TMI 854 - HC - Income TaxLevy of interest u/s 234A, 234B and 234C of the Act Held that - Following C.I.T. Vs DIVINE HOLDINGS PVT. LTD 2012 (4) TMI 100 - BOMBAY HIGH COURT - the tribunal has erred in taking a view that the assessee being a notified person under the Special Court (Trial of Offences relating to Transactions in Securities) Act, 1992 is not liable to pay interest u/s 234A, 234B and 234C of the Act - interest is chargeable and merely because the assets and properties are attached does not mean that the liability to pay interest will not arise the order of the Tribunal is set aside - Decided in favour of Revenue.
Issues involved:
1. Whether the Tribunal has power to absolve a notified person under the Special Court (Trial of Offences relating to Transaction in Securities) Act, 1992 from the levy of interest under sections 234A, 234B, and 234C of the Income Tax Act, 1961? 2. Is a notified person under the Special Court (Trial of Offences relating to Transaction in Securities) Act, 1992 liable to interest under sections 234A, 234B, and 234C of the Income Tax Act, 1961? Analysis: Issue 1: The appeal challenges the Tribunal's order absolving the respondent from the levy of interest under sections 234A, 234B, and 234C of the Income Tax Act, 1961. The Tribunal based its decision on a previous case, ORIENT TRAVELS PVT. LTD vs. D.C.I.T., where a similar conclusion was reached. The revenue contended that the Tribunal erred in absolving the notified person from the interest levy. The High Court referred to a judgment in the case of C.I.T. Vs DIVINE HOLDINGS PVT. LTD, where it was held that a notified person is indeed liable to pay interest under the mentioned sections of the Income Tax Act. The Court noted that the attachment of assets does not exempt the assessee from the liability to pay interest. Issue 2: The High Court, after a detailed analysis of legal provisions and previous judgments, concluded that the issue raised in the present appeal was already addressed in the case of DIVINE HOLDINGS PVT. LTD. The Court upheld its previous decision in the case of COMMISSIONER OF INCOME TAX CENTRAL II VS. CASKET HOLDINGS PVT. LTD, where the appeal was allowed, and the Tribunal's order was set aside. The Court reiterated that a notified person under the Special Court Act is liable to pay interest under sections 234A, 234B, and 234C of the Income Tax Act. Consequently, the High Court allowed the appeal, quashed the Tribunal's order, and made no order as to costs.
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