2000 (9) TMI 215 - AT - Income Tax

Summary

Issues involved: Appeal against levy of interest under sections 234B, 234C, and 201(1A) of the IT Act, 1961.

Summary:
The appeal was filed by the assessee against the order passed by the CIT(A) regarding the levy of interest under sections 234B, 234C, and 201(1A) of the IT Act for the assessment year 1989-90. The assessee, a private limited company, had deemed income under section 115J of the IT Act, and interest was levied for short payment of advance tax and delayed deposits of tax deducted at source. The CIT(A) upheld the levy of interest, relying on previous decisions. The assessee contended that deemed profits under section 115J should not be considered income for the purpose of interest levy. The conflicting views of the Gauhati High Court and Karnataka High Court were presented regarding the interpretation of the relevant provisions. The Tribunal analyzed the legal principles and decided to follow the judgment of the Karnataka High Court in favor of the assessee, ordering the deletion of interest under sections 234B and 234C.

Regarding the levy of interest under section 201(1A), the Tribunal noted that the tax audit report indicated delays in depositing tax deducted at source, and the assessee did not dispute the liability but raised procedural concerns. The Tribunal directed the deletion of interest under section 201(1A) as it should have been examined and adjudicated upon by the appropriate assessing officer. The decision clarified that the assessing officer could pursue the matter through the relevant jurisdiction, and the order did not affect any liability under section 201(1A) or other applicable provisions for delayed deposits of taxes deducted at source. Ultimately, the appeal was allowed in favor of the assessee.