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Issues:
Assessment of interest under section 234B and 234C for an AOP for the assessment year 1991-92. Analysis: The Appellate Tribunal ITAT Amritsar heard the case where the Deputy Commissioner of Income-tax Special Range completed the assessment for the AOP for the assessment year 1991-92. The appellant claimed that a sum of Rs. 2,21,822 had been paid as advance tax on 28-1-1991, which was not credited by the Assessing Officer, leading to interest under section 234B and 234C. The Assessing Officer accepted the plea regarding interest under section 234B but calculated interest under section 234C for a period of three months, which was contested by the appellant. The CIT (Appeals) upheld the Assessing Officer's decision, leading to an appeal by the appellant. The appellant argued that interest under section 234C should be compensatory and chargeable for the period of default, not compulsorily for three months. The Assessing Officer contended that interest under section 234C is chargeable for a period of three months regardless of the default period. The Tribunal analyzed the provisions of section 234C, which replaced the old provisions of section 216, and clarified that interest is chargeable for the period of default subject to a maximum of three months, not compulsorily for three months. The Tribunal highlighted the distinction between interest being "chargeable" and "charged" for a specific period. The Tribunal explained the rationale behind limiting the chargeability of interest to three months, preventing multiple levies of interest for the same default. By referencing the provisions of section 234B and the replaced section 216, the Tribunal concluded that interest under section 234C is chargeable for the period of default, subject to a maximum of three months. Consequently, the Tribunal allowed the appeal partly, deleting the extra interest charged under section 234C. No other grounds were pressed before the Tribunal, resulting in the partial allowance of the appeal by the appellant.
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