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TMI Blog2017 (2) TMI 500X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 234A amounting to Rs. 9,45,492/- been rightly charged, in spite of holding that interest will not be chargeable on the amount of tax paid before filing the income tax return. 3. That the learned CIT (A) erred in not directing of assessing officer categorically that interest u/s 234B of the Act should be calculated after giving due credit of taxes paid by the appellant on various dates during the period April 2010 to March 2011, amounting Rs. 1,20,00,000/-. 4. That the order of CIT (A) is not based on correct facts and judicial precedents relied upon by the appellant and therefore deserve to be set aside." 2. The facts in brief of the case are that the return of income for the year under consideration was filed on 28/03/2011, declaring income of Rs. 4,64,15,807/-. The case of the assessee was selected for scrutiny and notice under section 143(2) of the Income-tax Act, 1961 (for short "the Act") was issued and served within stipulated period. In the scrutiny assessment completed under section 143(3) on 15/02/2013, the total income was assessed at Rs. 4,64,43,585/- after making a disallowance of Rs. 27,778/- to the returned income. In the Income Tax Computation Form (ITNS-15 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction relied on the decision of the Hon'ble Delhi High Court in the case of Dr. Pannoy Roy (supra), further affirmed by the Hon'ble Supreme Court, wherein it is held that, interest being compensatory nature cannot be levied under section 234A of the Act, even if the taxes paid beyond the financial year ending of the relevant for assessment year and interest under section 234A shall be payable on the tax due after reducing the amount of taxes already paid before the due date of filing of return and, thereafter, from the date of payment of tax till the date of filing of return after reducing the amount of such tax so paid. Further, the learned Authorized Representative relied on the following decisions: (i) Sachin Jain versus DCIT(2012) 13 ITR(Trib) 161 Delhi (ii) Mrs Sheela JaiSingh versus ACIT (2007) 13 SOT 617 (Mum.) (iii) Nitin Murali Raheja versus assistant Commissioner of income tax (2007) 105 ITD 414 (Mumbai). (iv) Tarika Exports versus assistant Commissioner of income tax (2011) 129 ITD 365 (Ahd) (v) Epari Sadasiva Rao (HUF) versus assistant Commissioner of income tax (2012) 18 ITR(Trib.) 569 (Cuttack) 3.2 The learned Authorized Representative submitted that in vie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Where the return of income for any assessment year under sub-section (1) or sub-section (4) of section 139, or in response to a notice under sub-section (1) of section 142, is furnished after the due date, or is not furnished, the assessee shall be liable to pay simple interest at the rate of one per cent for every month or part of a month comprised in the period commencing on the date immediately following the due date, and,- (a) where the return is furnished after the due date, ending on the date of furnishing of the return; or (b) where no return has been furnished, ending on the date of completion of the assessment under section 144, on the amount of the tax on the total income as determined under sub-section (1) of section 143, and where a regular assessment is made, on the amount of the tax on the total income determined under regular assessment, as reduced by the amount of,- (i) advance tax, if any, paid; (ii) any tax deducted or collected at source; (iii) any relief of tax allowed under section 90 on account of tax paid in a country outside India; (iv) any relief of tax allowed under section 90A on account of tax paid in a specified territory outside India r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the revenue." 3.8 Further, in para-27 of the judgment, the Hon'ble High Court held as under: "27. We are, therefore, of the opinion that interest would be payable in a case, where tax has not been deposited prior to the due date of filing of the income-tax return." 3.9 The Hon'ble Supreme Court in the case of CIT Vs. Pranoy Roy and Anr. ( supra) in para-7 of the judgment, has held as under: "7. Since the tax due had already been paid which was not less than the tax payable on the returned income which was accepted, the question of levy of interest does not arise. Thus, we find no merit in this appeal and the same is dismissed." 3.10 Thus, it is evident that the interest would be payable in a case where taxes not been deposited prior to the due date of filing of income tax return. 3.11 In the case of the assessee, part of the tax due has been paid before the due date of filing of return and the balance has been paid after the due date of the filing of the return of income. 3.12 In the case of Sachin Jain Vs. Deputy Commissioner of Income Tax (supra), also the assessee paid the entire self-assessment tax in the month of November, 2006, whereas the return of income was file ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the due date of filing of return and hence tax paid before the due date of filing of return has to be excluded while computing interest under section 234A of the Act. 3.17 In the case of Epari Sadasiva Rao (HUF) (supra) also, the Assessing Officer was directed to rectify the claim of levy of interest under section 234A of the Act in accordance with the decision of the Hon'ble Delhi High Court in the case of Dr. Prannoy Roy (supra). 3.18 The finding of the Hon'ble Supreme Court in the case of Dr. Prannoy Roy (supra) has also been noted by the Central Board of Direct Taxes (CBDT) and the Circular No. 2/2015 has been issued on 10/02/2015, which reads as under: "Circular 2/2015 F. No. 385/03 /2015-IT(B) Government of India Ministry of Finance Department of Revenue Central Board of Direct Taxes (CBDT) North Block, New Delhi 10 th February, 2015 Subject: Chargeability of Interest under Section 234A of the Income-tax Act, 1961 on self-assessment tax paid before the due date of filing of return of income- regarding Interest under Section 234A of the Income-tax Act, 1961(hereinafter the Act) is charged in case of default in furnishing return of income by an assessee. The inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the return was filed in November, 2007. The Tribunal in the case directed the Assessing Officer to compute the interest under section 234A for the period from December 2006 to November, 2007 on the amount of assessed tax after reducing the amount of self-assessment tax paid in November, 2006. 3.22 We find that in the judgment of the Hon'ble Delhi High Court in the case of Dr. Prannoy Roy(supra) in para 27, it is clearly held that interest would be payable in a case where tax has not been deposited prior to the due date of filing of the income tax return. Further, Hon'ble Supreme Court also in the case of Dr. Prannoy Roy (supra) clearly held that when the tax due had already been paid, which was not less than the tax payable on the returned income which was accepted, the question of levy of interest does not arise. Thus, both the Hon'ble Delhi High Court and Hon'ble Supreme Court has held that credit of only self-assessment tax paid before the due date of filing of return has to be allowed while computing interest under section 234A of the Act. 3.23 Since Hon'ble Delhi High Court, being the jurisdictional High Court's, whose decision in the case of Dr. Pranoy Roy (supra) is bin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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