2023 (4) TMI 112 - AT - Income Tax

Interest levied u/s. 234B - Liability of advance Tax - TDS was not deducted by the payer - delay in deposit of tax and filing of return - whether for the purpose of working out Advance Tax payable, the Tax deductible has to be reduced and according to the said provision no Advance Tax need to be paid? - HELD THAT - Assessee was aware of the fact that the tax has not been deducted U/s. 195 of the Act and he was required to deposit the Advance Tax by 31st March of the previous year. The assessee was aware about the delay in deposit of tax and filing of return and therefore the onus cannot be shifted to the buyer. The action of the Ld. Revenue Authorities cannot be at fault and therefore the confirm the order of the Ld. CIT (A)-NFAC. CIT(A)-NFAC has rightly appreciated the facts of the case as well as the provisions of the IT Act, 1961 before deciding the issue on hand against the assessee. Therefore, we are of the considered opinion that there is no infirmity in the order of the Ld. CIT(A)-NFAC and no interference is required in the order of the Ld. CIT (A) -NFAC on this issue. Appeal filed by the assessee is dismissed.

Summary

Issues involved:
The appeal challenges the order of the Ld. Commissioner of Income Tax (Appeals) regarding the charging of interest under sections 234B and 234C of the Income Tax Act, 1961.

Issue 1: Charging of interest under section 234B:
The assessee, a Non-Resident Indian, sold an immovable property and admitted capital gains in the return of income. The Central Processing Centre (CPC) charged interest under section 234B and 234C of the Act, which the assessee contested. The Ld. CIT(A)-NFAC partly allowed the appeal, granting relief on interest levied under section 234C but confirming the interest under section 234B. The assessee appealed to the Tribunal, arguing that the tax should have been deducted by the property purchaser under section 195 of the Act, thus relieving the assessee from the interest liability.

Issue 2: Interpretation of section 234B and assessee's liability:
The Ld. AR contended that the Revenue Authorities erred in charging interest under section 234B, emphasizing that the property purchaser should have deducted the tax payable by the assessee as per section 195 of the Act. Conversely, the Ld. DR argued that the assessee was aware of the tax deduction requirement and the delay in depositing tax, shifting the onus to the buyer. The Ld. CIT(A)-NFAC's order highlighted that interest under section 234B is charged from 1st April of the following Financial Year and that the appellant was responsible for depositing Advance Tax by 31st March to avoid interest liability.

Judgment:
The Tribunal upheld the order of the Ld. CIT(A)-NFAC, stating that the appellant was aware of the tax deduction requirements and the need to deposit Advance Tax by the specified deadline. The Tribunal concurred with the Ld. CIT(A)-NFAC's interpretation of section 234B, emphasizing the appellant's responsibility to pay the full tax amount by the due date. Therefore, the appeal was dismissed, affirming the decision on interest charged under section 234B.