9911796707
TMI Blog2012 (4) TMI 370X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Revenue. 2. The assessee has taken the following six common grounds of appeal in all the appeals and they are as follows: "1. The Commissioner of Income Tax (Appeals) erred in upholding the levy of interest under Sections 234A, 234B and 234C of the IT Act. 2. The Commissioner of Income Tax (Appeals) erred in rejecting the grounds challenging the levy of interest by observing that it is difficult to determine whether M/s Core Carbon Private Ltd. was under obligation to deduct tax under the provisions of IT Act, 1961. 3. The Commissioner of Income Tax (Appeals) himself having found that for the A.Y:2006-07, M/s Core Carbon Pvt. Ltd. had deducted tax in respect of the payments made by it treating the pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rates. He argued that while computing the advance tax payable, the tax deducted at source was to be reduced from the total tax liability. The liability to pay advance tax was only the reduced sum. He further argued that although section 234B requires computation of interest on the basis of tax deducted at source (actually deducted), the liability to pay under section 208 is after excluding tax deductible at source since interest under section 234B can be levied on the short payment of advance tax and the advance tax payable as per section 208. It was the further submission of the ld. AR that the interest under section 234B was to be computed after taking into account the tax deductible at source and not tax deducted at source. He placed rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... commission income from M/s. Core Carbon (P) Limited on which tax was deducted at source as under: Asst. year Commission income Tax deductible as per provisions of Chapter XVII of the Act. Tax actually deducted 2003-04 919,875 262,461 81,810 2004-05 772,065 205,620 173,940 2005-06 2,363,165 766,270 156,241 2007-08 412,980 75,372 - 2008-09 2,586,151 821,250 - 7. The Assessing Officer charged interest under section 234A, 234B and 234C of the Act after considering the actual amount of tax deducted at source as under: Asst. year Interest under section 234A 234B 234C 2003-04 157,122 170,216 8,348 2004-05 23,384 25,596 1,171 2005-06 396,500 420,900 22,570 2007-08 30,873 33,885 2,787 2008-09 238,148 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been taken into account in computing the current income or, as the case may be, the total income aforesaid; and the amount of income-tax as so reduced shall be the advance tax payable. 9. A reading of the above shows that the assessee is not liable to pay advance tax to the extent to which the amount is deductible at source from him as per Chapter XVII of the Act. Consequently, the assessee cannot be treated as having made any default in payment of advance tax to the extent to which such amount was deductible at source. We find that the interest under section 234B is leviable for defaults in payment of advance tax and interest under section 234C is leviable for deferment of advance tax. In view of the discussions made hereinabove, in our ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the relevant previous year. Further, the interest under section 234A is not levied for any default of payment of any advance tax, but is levied for default in furnishing return of income within the specified time. Thus, in our considered opinion, the interest under section 234A is to be computed by excluding the amount of tax actually deducted from the assessee during the relevant previous year and interest under section 234B and 234C are to be charged by excluding the tax, which was deductible from the assessee as per provisions of Chapter XVII of the Act. We, therefore, set aside the orders of lower authorities and direct the Assessing Officer to recompute the interest as per discussion made hereinabove. Thus, the ground of appeal of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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