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Issues:
1. Interpretation of interest calculation under section 234B for a registered firm. 2. Treatment of an assessee-firm as registered or unregistered for interest levy under section 234B. 3. Calculation of interest under section 234B up to the date of processing the return under section 143(1)(a) versus completion of assessment under section 143(3). Issue 1: Interpretation of interest calculation under section 234B for a registered firm The appeal in question was against the order of the Commissioner (Appeals) for the assessment year 1991-92, specifically regarding the calculation of interest under section 234B. The Tribunal was directed by the Kerala High Court to reconsider the matter in light of amendments made in section 234B by the Finance Act, 1995. The Commissioner (Appeals) had directed interest calculation as per the status of an unregistered firm, which was contested by the assessee. The Tribunal noted that interest under section 234B can be levied up to the date of regular assessment, defined as assessment under section 143(3). However, since the revenue did not appeal against the Commissioner's order, the Tribunal found no merit in changing the interest calculation method based on the status of the firm. Issue 2: Treatment of an assessee-firm as registered or unregistered for interest levy under section 234B The case involved a firm that initially claimed registered status but was treated as unregistered in the assessment under section 143(3). The Commissioner (Appeals) upheld the levy of interest under section 234B as applicable to an unregistered firm but only up to the date of the intimation under section 143(1)(a). The Tribunal found the Commissioner's direction erroneous, stating that interest should be calculated based on the status of a registered firm as claimed by the assessee in the intimation under section 143(1)(a). The Tribunal emphasized that the revenue's failure to appeal against the Commissioner's decision precluded them from changing the interest calculation method. Issue 3: Calculation of interest under section 234B up to the date of processing the return under section 143(1)(a) versus completion of assessment under section 143(3) The primary contention was whether interest under section 234B should be calculated up to the date of processing the return under section 143(1)(a) or until the completion of assessment under section 143(3). The Commissioner (Appeals) had directed interest calculation only up to the date of the intimation under section 143(1)(a) based on the status of an unregistered firm. The Tribunal, however, modified the order to levy interest up to the date of the intimation under section 143(1)(a) but as applicable to a registered firm, as claimed by the assessee. The Tribunal highlighted that the revenue's failure to appeal against the Commissioner's decision prevented them from altering the interest calculation method based on subsequent events like the refusal of registration in the assessment under section 143(3). This detailed analysis of the judgment addresses the interpretation of interest calculation under section 234B, the treatment of the assessee-firm as registered or unregistered for interest levy, and the calculation of interest up to different stages of assessment under section 143.
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