2023 (7) TMI 857 - AT - Income Tax

Levy of interest u/s 234C - intimation issued u/s 143(1) - HELD THAT - As the tax payable by the assessee on the long-term capital gains earned from the sale of shares on 01/03/2017, i.e. at the rate of 20%, was duly paid by the assessee on the next due date of advance tax, which in the facts and circumstances of the present case was 15/03/2017. Thus, we are of the considered view that in terms of the 1st proviso to section 234C(1), interest u/s 234C of the Act was wrongly levied vide intimation issued u/s 143(1). We direct the AO to delete the interest levied u/s 234C - Ground raised in assessee s appeal is allowed.

Summary

Issues involved: Appeal against levy of interest under section 234C of the Income Tax Act, 1961 for the assessment year 2017-18.

Summary:
The appeal was filed by the assessee challenging the order passed under section 250 of the Income Tax Act, 1961 by the Commissioner of Income Tax (Appeals) for the assessment year 2017-18. The only dispute raised by the assessee was against the levy of interest under section 234C of the Act.

The assessee, a non-banking financial company, originally filed its return of income declaring a total income. The return was revised, and the total income was declared under normal provisions and section 115JB of the Act. The tax liability was discharged under the MAT provisions, resulting in a refund. However, the Assessing Officer levied interest under section 234C of the Act, leading to a demand against the refund claimed by the assessee.

The Commissioner of Income Tax (Appeals) dismissed the appeal stating that there was no adjustment to income made under section 143(1) of the Act. The only grievance of the assessee was regarding the erroneous levy of interest under section 234C of the Act. The Commissioner suggested that the effective remedy was under section 154 of the Act for rectification of the mistake. The assessee appealed against this decision.

After considering the submissions and perusing the material, it was found that the tax payable on long-term capital gains from the sale of shares was duly paid by the assessee on the next due date of advance tax. Therefore, interest under section 234C of the Act was wrongly levied. The Assessing Officer was directed to delete the interest levied under section 234C of the Act. Other issues raised in the appeal were considered academic and left open. Consequently, the appeal by the assessee was allowed.