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TMI Blog2017 (3) TMI 571X X X X Extracts X X X X X X X X Extracts X X X X ..... n respect of income returned u/s.139(1) but not the income admitted in the revised return of income. As discussed above, except in two circumstances provided in Sec.234C as per the proviso referred above, in all the remaining cases interest u/s.234C is chargeable without any exception. This view is supported in the case of MRF Ltd. v. Deputy Commissioner of Income-tax, Large Tax Payer Unit, Chennai [2016 (11) TMI 1011 - MADRAS HIGH COURT]. - ITA No.714/Mds/2016 - - - Dated:- 31-1-2017 - SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI D.S.SUNDER SINGH, ACCOUNTANT MEMBER For The Appellant : Mr.K.Raghu, FCA For The Respondent : Mr.B.Sahadevan, JCIT ORDER PER D.S.SUNDER SINGH, ACCOUNTANT MEMBER: This is an appeal filed by the assessee against the Order dated 30.12.2015 of Commissioner of Income Tax (Appeals)-2, Coimbatore, in ITA No.216/14-15 for the AY 2009-10 and raised on the following grounds:- 1) The learned CIT(A) ought to have held that interest u/s.234C was not chargeable at all, by the AO on the basis of tax due on the returned income , u/s.147 of the I.T.Act, 1961, as there was no deferment of advance tax, read with Explanation to section 234 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or if no return is filed. In case, the assessee revised the return of income u/s.148, the provisions of section 234C are not applicable on the difference income admitted in response to the notice issued u/s.148. The AO rejected the petition made by the assessee for rectification u/s.154 stating that the interest u/s.234C was charged correctly on the income declared in the return of income furnished by the assessee on 19.12.2013. 3.0 Aggrieved by the order of the AO, the assessee went on appeal before the Learned Commissioner of Income Tax (Appeals) (hereinafter referred to as Ld.CIT(A) ) and the Ld.CIT(A) confirmed the addition of the AO. The Ld.CIT(A) has elaborately discussed the issue in his order in Para No.4.2 which is extracted for the sake of convenience is as under: 4.2 As per provisions of section 234C, interest under this section attracts when the assessee who is liable to pay advance tax fails to pay or payment of installments of advance tax till a specified date in the previous year falls short of specified percentage of tax due on the returned income and such interest shall be calculated at one percent per month for a period of three months. So, the shortfall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax and interest liability. Another occasion of furnishing of return of income by any assessee arises when the AO issues notice u/s.148 and the return filed pursuant to that shall become the latest and subsisting return for that year. Since this return is also furnished by the assessee, there is no reason to bar the application of section 234C to return filed pursuant to notice u/s.148. Further, as per the provisions of section 148(1), all other provisions of the Act shall, so far as may be , apply to the return filed in response to notice under this section as if it is a return furnished u/s.139. Thus, interest u/s.234C is also leviable on the basis of return furnished in response to notice u/s.148, if the advance tax payments fall short of tax due on the income declared in such return. In the light of the above discussion, I reject the arguments of the AR and the relevant grounds of appeal. Accordingly, interest levied u/s. 234C is sustained . 4.0 Aggrieved by the order of the Ld.CIT(A) the assessee is on appeal before us. Appearing for the assessee the Learned Authorized Representative (hereinafter referred to as Ld.AR ) argued that the interest u/s.234C is chargeable o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... September, is not less than twelve per cent or, as the case may be, thirty-six per cent of the tax due on the returned income, then, the assessee shall not be liable to pay any interest on the amount of the shortfall on those dates; ] 81a [ ( b ) an eligible assessee in respect of the eligible business referred to in section 44AD, who is liable to pay advance tax under section 208 has failed to pay such tax or the advance tax paid by the assessee on its current income on or before the 15th day of March is less than the tax due on the returned income, then, the assessee shall be liable to pay simple interest at the rate of one per cent on the amount of the shortfall from the tax due on the returned income: ] 82 [ Provided that nothing contained in this sub-section shall apply to any shortfall in the payment of the tax due on the returned income where such shortfall is on account of underestimate or failure to estimate- ( a ) the amount of capital gains; or ( b ) income of the nature referred to in sub-clause ( ix ) of clause ( 24 ) of section 2; 82a [ or ] 82a [ ( c ) income under the head Profits and gains of business or profession in cases ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n a specified territory outside India referred to in that section; ( iv ) any deduction, from the Indian income-tax payable, allowed under section 91, on account of tax paid in a country outside India; and ( v ) any tax credit allowed to be set off in accordance with the provisions of section 115JAA87[or section 115JD].] (2) The provisions of this section shall apply in respect of assessments for the assessment year commencing on the 1st day of April, 1989 and subsequent assessment years.]] 6.0 Now, the question before us is whether to charge interest u/s.234C only on the income disclosed in the return of income filed u/s.139 or the income disclosed in the return of income filed u/s.148. As per Sec.234C, the assessee is liable to pay simple interest @1% on the amount of shortfall from the tax difference on the returned income. It does not distinguish the income admitted by the assessee u/s.139 or Sec.148, which is a provision to bring the income escaped from the assessment from the tax net. The income admitted by the assessee in response to the notice issued u/s.148 is within the knowledge of the assessee and the assessee should have estimated the advance tax and paid t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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