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Issues Involved:
1. Maintainability of the appeal against the charging of interest under section 234B. 2. Legality of charging interest under section 234B without specific mention in the demand notice. 3. Basis for computing interest under section 234B - whether on income determined under section 143(1) or 143(3). 4. Validity of charging interest after the date of determination of income under section 143(1). Issue-wise Detailed Analysis: 1. Maintainability of the Appeal: The appeal's maintainability was contested by the Department Representative (DR), citing the Supreme Court's decision in Central Provinces Manganese Ore Co. Ltd. v. CIT, arguing that the appeal should be dismissed in limine. However, the assessee argued that the charging of interest under section 234B arose from an order under section 154, making the appeal maintainable. The tribunal found that since the assessee challenged the levy of interest in totality, the appeal was maintainable. Additionally, section 246A(1)(c) allows an appeal against an order under section 154 if it enhances the assessment or reduces the refund, which was applicable in this case. 2. Legality of Charging Interest Without Specific Mention: The assessee contended that interest under section 234B was not chargeable as there was no specific mention in the demand notice, relying on the Supreme Court's decision in CIT v. Ranchi Club Ltd. The tribunal noted that the assessment order did mention the charging of interest under section 234B. The tribunal referenced the Delhi High Court's decision in CIT v. Kishanlal (HUF) and the jurisdictional High Court's decision in Vinod Khurana v. CIT, which upheld the validity of charging interest if mentioned in the assessment order and demand notice. Thus, the tribunal held that the interest charge was valid as the assessment order specifically mentioned section 234B. 3. Basis for Computing Interest - Income under Section 143(1) or 143(3): The assessee argued that interest should be charged on the income determined under section 143(1) and not on the regular assessment under section 143(3), citing the Ranchi Club Ltd. decision. However, the tribunal pointed out amendments to section 234B and Explanation 1, made by the Finance Act, 2001 with retrospective effect from 1-4-1989, which clarified that interest should be charged on the assessed income. The tribunal emphasized that the assessed tax includes the tax on total income determined under section 143(1) or on regular assessment, thus rejecting the assessee's contention. 4. Validity of Charging Interest After Determination under Section 143(1): The assessee contended that interest should only be charged up to the date of determination under section 143(1). The tribunal clarified that section 234B(1) prescribes charging interest from the 1st day of April following the financial year to the date of regular assessment if made. The tribunal found no merit in the assessee's argument and upheld the interest charge up to the date of regular assessment under section 143(3). Conclusion: The tribunal concluded that the appeal was maintainable, the interest charge under section 234B was validly imposed, and the basis for computing interest should be the income determined on regular assessment under section 143(3). The appeal was dismissed.
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