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TMI Blog2023 (2) TMI 513X X X X Extracts X X X X X X X X Extracts X X X X ..... furnishing return of income shall be payable only on the amount of tax that has not been deposited before the due date of filing of the income-tax return for the relevant assessment year. The impugned provisions are only compensatory in nature and no part thereof is penal in character. Also see ANAND PRAKASH [ 2009 (2) TMI 30 - DELHI HIGH COURT] as held argument raised on behalf of the revenue that such payment of tax did not strictly comply with the meaning of advance tax and would therefore, have to be disregarded for the purposes of charging interest u/s 234A, was rejected. The Court also held that interest u/s 234A was compensatory in nature and unless any loss was caused to the revenue, the same could not be charged from the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peals) has grievously erred in law and on facts in not appreciating the contention of the appellant that interest u/s. 234A and 234B are compensatory in nature and not penal in nature and they are levied to compensate revenue in order to avoid it from being deprived of payment of tax. 3. That the appellant craves leave to add, amend, alter, vary and / or withdraw any or all the above grounds of Appeal. 3. At the outset, it was brought to our notice by the learned counsel for the assessee that there was delay in filing the appeal for 105 days on account of Covid-19, therefore the same should be condoned. The learned DR on the contrary did not raise any objection on the condonation of the delay. Accordingly, we condone the same in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessee by observing as under: iv. The assessee has made payment of Rs. 71,070/- on 19/03/2015. As per the Explanation appended below section 140A of the Act, the self assessment tax paid is required to be first adjusted towards the interest payable by him and the balance shall be adjusted towards the tax payable. Accordingly the interest payable u/s. 234B of the Act is worked out giving credit to tax paid of Rs. 71,070/- after adjustment of interest payable by him u/s. 234A and 234C of the Act. Thus, the interest payable u/s. 234B is charged at Rs. 19,220/-, rectifying the mistake u/s. 154 of the Act. 8. Assessee preferred an appeal before the Ld. CIT(A). The assessee claimed that he has already paid self-assessment tax w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in my considered opinion, the AO has no authority to restrict/curtail the same. Thus, the A.O. has correctly charged the interest as per the stated provisions of the Act, and the request of the appellant for curtailing the interest u/s 234A/234B upto the date of payment of self-assessment tax, being beyond the scope of section 154, has not been allowed by the AO. These grounds of the appellant therefore do not succeed. 11. Aggrieved assessee is in appeal before us. 12. The learned AR before us filed a paper book running from pages 1 to 46 and case law compilation running from pages 1 to 46 and contended that the interest charged under section 234A and 23B is compensatory in nature. Once, the assessee has paid the taxes including th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scheme and the purpose of Income Tax Act is to realize direct taxes. It is not correct to refer to the levy of such interest as a penalty. Having regard to the reason for the levy and the circumstances in which it is imposed, it is clear that interest is levied by way of compensation and not by way of penalty. It is, therefore, fairly manifest that the amount on which the interest is levied, is the amount, which can legitimately be said to be public revenue though payable by the assessee, but not paid by him. The income-tax Act makes a clear distinction between the levy of a penalty and other levies under that statute. 17. When the amount of tax has been paid by the assessee with interest up-to the date of payment, there is no point to c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that interestundersection234B was compensatory in character and that it was not penal in nature. Another decision which would be relevant is of a Division Bench of this Court in the case of Dr. Prannoy Roy v. CIT [2002] 254 ITR 755. In that case, the provisions of section234A were in issue. The question before the court was whether interest could be charged undersection234A when, though the return had not been filed in time, the tax had been paid. The argument raised on behalf of the revenue that such payment of tax did not strictly comply with the meaning of advance tax and would therefore, have to be disregarded for the purposes of charging interestundersection234A, was rejected. The Court also held that interestundersection234A was co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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