2006 (5) TMI 71 - HC - Income Tax

Levy of interest under section 234A delay in filing return Assessing Officer has only accepted the request of the assessee to treat the return filed on June 22, 1993, as the return filed by the assessee in response to the notice issued under section 148. The letter of the assessee was received by the Assessing Officer on February 7, 1994. The mere fact that the Assessing Officer has treated the return filed by the assessee on June 22, 1993, as the return in response to the notice under section 148 would not absolve the liability of the assessee to pay interest under section 234A - assessee is bound to pay interest under section 234A as demanded by the Assessing Officer. Revenue s appeal is allowed

Summary

Issues:
Interpretation of section 234A for levy of interest on delayed filing of income tax return.

Analysis:
The judgment pertains to an appeal by the Commissioner of Income-tax against the Income-tax Appellate Tribunal's decision regarding the levy of interest under section 234A. The case involved the filing of an income tax return after the due date, leading to a dispute over the period for which interest should be charged. The Tribunal held that interest could only be charged up to the date of filing the return, rejecting the Commissioner's decision to levy interest up to a later date based on the assessee's request to treat an invalid return as valid.

The court examined the provisions of section 234A, emphasizing that filing a return after the due date renders it invalid and non est in the eye of the law. The assessee in this case had failed to file the return within the prescribed time, leading to the issuance of a notice under section 148. Despite the assessee's request to consider the earlier filed return as a response to the notice, the court ruled that such actions cannot bypass statutory requirements. The Assessing Officer's acceptance of the request did not legitimize the initially invalid return, and the liability to pay interest under section 234A remained.

The court highlighted that the assessing authority was not obligated to accept the assessee's request to treat the belatedly filed return as a valid response to the notice under section 148. By allowing the appeal, the court set aside the Tribunal's decision and upheld the Commissioner's order, affirming that the assessee was indeed liable to pay interest under section 234A as determined by the Assessing Officer. The judgment underscored the importance of adhering to statutory provisions and the limitations of seeking leniency from the authorities in tax matters.