2017 (1) TMI 392 - AT - Income Tax

Interest charged u/s.234B - advance tax - CIT(A) deleted the interest charged u/s.234B relying on the decision in the case of Ajay Prakash Verma 2013 (1) TMI 140 - JHARKHAND HIGH COURT - Held that - Find that no mistake in the order of the ld CIT(A) could be pointed out by ld D.R. It is admitted by ld D.R. that the SLP filed before the Hon ble Supreme Court is still pending for disposal. Hence, as on date the decision of Hon ble Jurisdictional High Court is valid and binding. Find that the Hon ble Jharkhand High Court in the case of Ajay Prakash Verma supra where following the decision in case of Smt. Tej Kumari (2000 (9) TMI 52 - PATNA HIGH COURT) that the revenue can levy the interest only on the total income declared in the returns and not on the income assessed and determined by the A.O. to that extent. - Decided in favour of assessee

Summary

Issues: Appeal against deletion of interest charged u/s.234B of the Act.

Analysis:
1. The appeal was filed by the revenue challenging the deletion of interest charged u/s.234B of the Act by the ld CIT(A) for the assessment year 2009-2010.
2. The Assessing Officer had assessed the income of the assessee at a higher amount than declared, leading to the charging of interest u/s.234B as advance tax was not paid on the assessed income.
3. The ld CIT(A) directed the Assessing Officer to modify the interest calculation based on the decision of the Hon'ble Jurisdictional High Court, which held that interest under section 234B should only be charged on the income declared in the return, not on the assessed income.
4. The revenue contested the decision, stating that they have filed a Special Leave Petition (SLP) before the Hon'ble Supreme Court against the High Court's decision, keeping the issue alive.
5. The assessee pointed out that a Civil Review Petition filed by the revenue before the Hon'ble Jharkhand High Court was dismissed, affirming the validity and binding nature of the High Court's decision until the SLP is disposed of by the Supreme Court.
6. The ITAT upheld the decision of the ld CIT(A) based on the legal position established by the Hon'ble Jurisdictional High Court and the dismissal of the review petition, concluding that the interest should be charged only on the income declared in the return, not on the assessed income.
7. Consequently, the appeal filed by the revenue was dismissed, affirming the order of the ld CIT(A) and confirming that interest u/s.234B should not be charged on the assessed income but only on the income declared in the return.