2016 (10) TMI 810 - HC - Income Tax

Levy of interest u/s 234A - petitioner submitted that cash amount seized at the premises of assessee at the time of raid should be treated as Tax Paid by assessee - Held that - Assessee himself had deposited tax which was more than ultimate amount found as Tax payable. If an assessee has deposited higher amount of tax than returned tax accepted by Revenue the question of levy of interest under Section 234-A would not arise.

Summary

Issues:
1. Liability for interest under Sections 234-A, 234-B, and 234-C of the Income Tax Act, 1961 when the return is filed beyond the due date and there is a delay in tax payment.

Analysis:

The judgment delivered by the High Court addressed the issue of interest liability under Sections 234-A, 234-B, and 234-C of the Income Tax Act, 1961 when the taxpayer files the return beyond the due date and there is a delay in the payment of tax. The petitioner argued that cash seized during a raid should be considered as "Tax Paid" by the taxpayer, and if the seized amount exceeds the tax liability, it should be treated as tax deposited on the due date, citing a decision in C.I.T. Vs. Pranoy Roy (2009) 309 ITR 231 (SC). On the other hand, the respondents contended that the seized amount cannot be considered as tax deposited by the taxpayer, especially when the return was filed belatedly, relying on Karanvir Singh Gossal Vs. Commissioner of Income-tax (2012) 349 ITR 692.

The court highlighted that the Supreme Court in both cases, C.I.T. Vs. Pranoy Roy and Karanvir Singh Gossal, emphasized the mandatory and compensatory nature of Section 234-A provisions. It was clarified that if there is a delay in submitting the return and in depositing income tax, the taxpayer is liable to pay interest under the mentioned provisions. The court cited the case of C.I.T. Vs. Pranoy Roy, where the taxpayer had deposited tax exceeding the ultimate tax payable amount, leading to the conclusion that interest under Section 234-A would not be applicable in such a scenario.

Ultimately, the court found that the petitioner had not deposited the tax and had filed the return belatedly, making them liable to pay interest under the relevant provisions. As a result, the writ petition was dismissed for lacking merit. The judgment reaffirmed the obligation of taxpayers to timely file returns and pay taxes to avoid interest liabilities under the Income Tax Act, 1961.