9911796707
TMI Blog2009 (12) TMI 944X X X X Extracts X X X X X X X X Extracts X X X X ..... ring for the respondent-assessee. 2. When the return of the assessee filed for the year 1995-96 was processed under Section 143(1), the Assessing Officer found that the assessee had paid over 90% of the assessed tax as advance tax which included tax deducted at source as well. Even though the assessment was taken up for scrutiny and regular assessment under Section 143(3) was completed on 2.12.1997, the demand of tax remained the same and consequently there was no shortage of advance tax and so much so, interest was not levied under Section 234B(1) of the Act. However, the assessment was modified under Section 147 on 18.2.2002 which led to an additional demand of ₹ 84,824/-. Even though no interest was levied under Section 234B in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der section 147 or section 153A, on the amount by which the tax on the total income determined on the basis of the re- assessment or re-computation exceeds the tax on the total income determined under sub-section (1) of section 143 or on the basis of the regular assessment aforesaid. 3. The question to be considered is whether the above sub-section is attracted only if there is levy of interest under Section 234B(1) in the intimation issued under Section 143(1) or in the regular assessment completed under Section 143(3) as held by the Tribunal. Admittedly in this case in the determination of total income under sub-section (1) of Section 143 and in the regular assessment completed under Section 143 (3), the Assessing Officer found that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessed in reassessment proceedings. Counsel for the assessee brought to our notice Section 234D which was introduced by Finance Act 2003 with effect from 1.6.2003, which provides for levy of interest in the course of regular assesment on excess tax refunded in proceedings completed under Section 143(1) of the Act. According to assessee's counsel, Section 234B(3) could be invoked only for increasing the demand of interest levied in original assessment under Section 234B(1) and when no interest is demanded under the said provision in the original assessment, the Assessing Officer cannot invoke Section 234B(3) for levying interest for the first time after revision of assessment under Section 147 of the Act. We are unable to uphold the fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment was completed either under Section 143(1) or 143(3) of the Act. The only condition for levying interest under Section 234B(3) is increase in the shortfall in advance tax as a consequence of revision of assessment under Section 147 of the Act. While interest on shortfall in payment of advance tax is levied in the regular assessment under Section 234B(1) upto the date of completion of assessment, interest on further shortfall in advance tax with reference to tax determined on reassessment under Section 147 is levied under sub-section (3) of Section 234B. Increase in shortfall of advance tax on reassessment leads to levy of interest under Section 23B(3) and this Section does not require that in order to attract liability under it th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 234B(3) is mandatory, omission in the reassessment completed under Section 147 will make it defective warranting it's rectification under Section 154 for levy of interest under Section 234B (3) of the Act. We, therefore, hold that the omission to levy interest under Section 234B(3) in reassessment completed under Section 147 could be made up in rectification proceedings under Section 154 of the Act. 5. In view of the above findings, we allow the appeal by reversing the order of the Tribunal and by restoring in principle the levy of interest under Section 234B(3) of the Act. However, we notice that interest is demanded under Section 234B(3) on the entire balance demand of tax raised in reassessment proceedings. Interest could be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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