2019 (12) TMI 215 - HC - Income Tax

Interest u/s 234A - return of income was furnished in response to the notice issued under section 148 - HELD THAT - Admit Following substantial question of law arises for consideration Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was justified in holding that the assessee is not liable to pay interest under section 234A of the Income Tax Act, 1961 for the period during which, it could not have filed the valid return of income under sub-section (4) of section 139 of the Act?

Summary

Issues Involved:
Interpretation of section 234A of the Income Tax Act, 1961 regarding the liability to pay interest for late filing of returns.

Analysis:

Issue 1: Liability to pay interest under section 234A

The judgment discusses the provisions of section 234A of the Income Tax Act, 1961, which mandates the payment of simple interest at the rate of one percent per month for late filing of returns. The court was apprised by the appellant's counsel that the assessee is obligated to pay interest if the return is filed after the due date, extending up to the date of filing, or if no return is filed, extending up to the completion of assessment under section 144. In this case, the return was submitted in response to a notice under section 148 on a specific date, leading to a contention that interest is payable from the due date until the filing date. The argument emphasized that the section does not provide for an exemption from interest payment for the period when a valid return could not be filed under section 139.

Issue 2: Appeal for consideration

Considering the submissions made by the appellant's counsel, the court acknowledged the need for a detailed examination of the appeal. Consequently, the court admitted the appeal for further consideration. Subsequently, a substantial question of law was formulated for consideration, questioning the justification of the Income Tax Appellate Tribunal's decision that the assessee was not liable to pay interest under section 234A for the period when a valid return could not have been filed under section 139(4) of the Act. This question forms the crux of the appeal and requires a thorough analysis of the legal provisions and factual circumstances surrounding the case.

In conclusion, the judgment delves into the intricacies of section 234A of the Income Tax Act, 1961, addressing the liability for interest payment in cases of late filing of returns. The court's decision to admit the appeal signifies the importance of resolving the substantial legal question raised regarding the justification of interest imposition under the specified circumstances. The detailed analysis provided by the court reflects a meticulous examination of the legal provisions and factual context to arrive at a just and reasoned decision.