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2017 (12) TMI 1524 - AT - Income TaxEnhancement of interest under section 234A of the Act - Held that - On perusal of the order dated 19/04/15 it is observed that due date of filing the original return was 30/11/13 whereas assessee filed the return on 29/11/14 thereby causing a delay of 12 months - By applying Section 234A, assessee is liable to pay interest under section 234A for the period commencing on the date immediately following the due date upto the date of furnishing the return (in the present case return is furnished after the due date) at one percent per month - admittedly self-assessment tax has been paid with a delay of one month, after the due date of filing of return - the interest computed by Ld. AO under section 234A is confirmed. Levy of interest under section 234B - Held that - section 234B is applicable where assessee fail to deposit advance tax or the advance tax deposited is less than 90% of the taxable income - In the present case Assessee admittedly has not deposited advance tax for any of the three quarters - assessee is liable to interest under section 234B at 1% for every month starting from 1st day of financial year relevant to the assessment year from 01/04/13 to 29/11/14. Appeal dismissed - decided against assessee.
Issues Involved:
1. Interpretation of Section 234A in light of relevant case laws and circulars. 2. Charging of interest under Section 234A beyond the date of deposit of self-assessment tax. 3. Charging of interest under Section 234B based on the enhanced interest under Section 234A. Detailed Analysis: Issue 1: Interpretation of Section 234A The appellant challenged the order of Ld.CIT(A) for not considering a detailed interpretation of Section 234A as per the judgment in the case of Dr. Prannoy Roy by Delhi High Court and upheld by the Apex Court. The crux of the judgment was to interpret interest under Section 234A as compensatory and not penalizing for delayed return submission. The appellant cited a Chennai ITAT decision for relief even when tax was deposited after the due date. The argument was that Section 234A aims to compensate revenue for late tax payment, not penalize. The appellant relied on various legal precedents and circulars to support this interpretation. Issue 2: Charging Interest under Section 234A The appellant contested the Assessing Officer's decision to charge interest under Section 234A beyond the date of self-assessment tax deposit. The appellant argued that this action was contrary to facts, law, and principles of natural justice. The appellant sought the deletion of interest charged beyond the self-assessment tax deposit date. The appellant's representative presented the case before the Tribunal, emphasizing that interest under Section 234A is compensatory and not punitive for delayed tax payment. Issue 3: Charging Interest under Section 234B The appellant raised concerns about the Assessing Officer treating the interest under Section 234A as 'assessed tax' for calculating interest under Section 234B. The appellant argued that this approach was contrary to facts and laws, seeking the deletion of interest charged under Section 234B. The appellant's representative referenced relevant legal provisions and decisions to support their arguments. The Tribunal reviewed submissions from both sides, considered legal precedents, and analyzed the applicable sections of the Income Tax Act for the relevant period. The Tribunal analyzed the arguments, legal provisions, and precedents presented by both parties. Regarding the interpretation of Section 234A, the Tribunal examined the case law and circulars cited by the appellant. The Tribunal found that the appellant's delayed self-assessment tax payment did not align with the conditions for exemption from interest under Section 234A as per the Supreme Court decision and CBDT Circular. Therefore, the Tribunal confirmed the interest computed by the Assessing Officer under Section 234A. Concerning the levy of interest under Section 234B, the Tribunal determined that the appellant's failure to deposit advance tax made them liable for interest under Section 234B. The Tribunal upheld the decision of the Ld.CIT(A) regarding interest under Section 234B. As a result, the appeal filed by the appellant was dismissed, and the decision was pronounced in open court on 28/12/2017.
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