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TMI Blog2024 (6) TMI 802X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment either u/s. 147 or there-under, u/s. 234B(1) r/w Explanation 2 thereto, for a period of 36 months, i.e., from 01.04.2010 (the first day of the relevant assessment year) to March, 2013 (i.e., up to the month of assessment). There being no subsequent assessment, either u/s. 147 or u/s. 153A, there is no occasion to charge interest u/s. 234B(3). Reference thereto is thus wholly misplaced. The only change subsequent thereto is in the appellate proceedings, and which would, as afore-stated, not impact the period for which the interest stands to be levied u/s. 234B, but only, in view of the modification in the assessed income and, thus, the assessee s tax liability and, consequently, the assessed tax, i.e., the principal sum on which interest for shortfall is to be levied (s. 234B(4)). All that the law therefore provides is for the corresponding increase or, as the case may be, decrease in the interest chargeable u/s. 234B with reference to the revised principal sum, substituting tax liability with that determined in the appellate/revisionary proceedings. Sheer force of logic would also dictate the same inasmuch as interest could only be charged, on the change in the principal s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rch, 2013, on the increase in the assessed tax, i.e., Rs. 15,36,914, would thus range from a period of 12 months (April, 2012 to March, 2013) to 29 months (November, 2010 to March, 2013) and, thus, vary from 1,84,428 to Rs. 4,45,700, i.e., depending on the time of processing her return u/s. 143(1). The same, computed at Rs. 6,45,503, was thus in excess. The amendment to s. 234B(3) by Finance Act, 2015, w.e.f. 01/6/2015, would not be applicable. As per the Assessing Officer(AO) interest on the differential tax of Rs. 15.37 lacs was to be worked from the first day of the assessment year, i.e., 01/4/2010, up to the date of reassessment/recomputation in March, 2013 and, thus, for a period of 36 months; the relevant part of his order reading as: Further, regarding the calculation of interest u/s 234B(3), it may be noted that as per the provisions of section 2348(3), the interest is calculated on the amount by which the tax on the reassessment exceeds the tax on the original income for the period commences from 1st April of the assessment year and ends on the date of completion of the assessment. Here the difference of tax on the original assessment and tax determined u/s.153A comes to R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection, assessed tax means the tax on the total income determined under sub-section (1) of section 143 and where a regular assessment is made, the tax on the total income determined under such regular assessment as reduced by the amount of, (i) any tax deducted or collected at source in accordance with the provisions of Chapter XVII on any income which is subject to such deduction or collection and which is taken into account in computing such total income; (ia) any relief of tax allowed under section 89; (ii) any relief of tax allowed under section 90 on account of tax paid in a country outside India; (iii) any relief of tax allowed under section 90A on account of tax paid in 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 115JAA or section 115JD. Explanation 2. Where, in relation to an assessment year, an assessment is made for the first time under section 147 or section 153A, the assessment so made shall be regarded as a regular assessment for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... commencing on the 1st day of April, 1989 and subsequent assessment years. FA, 2015 substitutes s. 234B(3), which, accordingly, since 01/6/2015, reads as under: (3) Where, as a result of an order of reassessment or recomputation under section 147 or section 153A, the amount on which interest was payable in respect of shortfall in payment of advance tax for any financial year under sub-section (1) is increased, 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 1st day of April next following such financial year and ending on the date of the reassessment or recomputation under section 147 or section 153A, on the amount by which the tax on the total income determined on the basis of the reassessment or recomputation exceeds the tax on the total income determined under sub-section (1) of section 143 or on the basis of the regular assessment as referred to in sub-section (1), as the case may be. 3.2 Section 234B of the Act provides for levy of interest on the shortfall in advance tax, reckoned with reference to the tax liability as determined either u/s. 143(1) or on regular assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... credit for the reduction in tax, as originally assessed (Rs. 83,35,990), to that pursuant to the appellate order (Rs. 60,58,729), i.e., in terms of s. 234B(4). The same, as afore-said, has no bearing on the period for which interest stands levied. Accordingly, the only change in the interest as originally charged would be on passing the appellate order, while giving appeal effect thereto, on account of the quantum of assessed tax ; the income having been reduced from Rs. 83,35,990 to Rs. 60,58,729. The same has no implication as regards the period of interest, which shall continue to be for the period of 36 months, i.e., the period beginning with the assessment year to the date of original assessment in March, 2013. We observe no dispute in its respect. What, then, pray, is the controversy about ? 3.4 Interest stands charged on assessment u/s. 153A dated 28.03.2013, being the first assessment either u/s. 147 or there-under, u/s. 234B(1) r/w Explanation 2 thereto, for a period of 36 months, i.e., from 01.04.2010 (the first day of the relevant assessment year) to March, 2013 (i.e., up to the month of assessment). There being no subsequent assessment, either u/s. 147 or u/s. 153A, th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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