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TMI Blog2024 (12) TMI 421X X X X Extracts X X X X X X X X Extracts X X X X ..... o the provisions contained in Section 234B(2)(i) of the Act the aforesaid amount shall be reduced from the interest computed under Section 234B(1) of the Act. Our view also draws support from the provisions contained in Section 140A(2) of the Act which, inter alia, provides that after regular assessment u/s 143 of the Act amount paid under Section 140A(1) of the Act as self assessment tax is deemed to have been paid towards such regular assessment. That being the case, the question of changing the appropriation of amount paid at the time self assessment under Section 140A of the Act between interest and tax on determination of income under Section 143(1)/(3) of the Act does not arise. The Assessing Officer cannot change the amount of interest paid under Section 234B of the Act at the time of filing return of income under Section 140A of the Act on determination of income under Section 143(1)/(3) As relying on Patson Transformers Ltd [ 2005 (11) TMI 388 - ITAT AHMEDABAD] we accept the computation of income under Section 234B of the Act made by the Appellant and delete the levy of interest u/s 234B of the Act. Assessee appeal allowed. - Shri Amarjit Singh, Accountant Member And Shr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of tax deducted at source amounting to INR.83,100/- (b) Interest under Section 234B of the Act was computed in the intimation issued under Section 143(1) of the Act at INR.6,33,077/- as against the interest of INR.4,67,729/- computed by the Appellant. Thus, additional demand of INR.1,65,348/- was raised upon the Appellant. (c) An additional demand of INR.4,198/- was also raised in relation to interest under Section 234C of the Act. 4. The Appellant preferred appeal before the CIT(A) against the Intimation Order, dated 21/10/2019, which was disposed off as partly allowed. The CIT(A) granted partial relief by issuing directions in relation to the verification/grant of credit of tax deducted at source of INR 83,100/-. However, the CIT(A) declined to grant any relief in relation to additional interest levied under Section 234B and 234C of the Act. 5. Being aggrieved, the Appellant has preferred the present appeal before the Tribunal on the grounds reproduced in paragraph 2 above. The solitary issue raised in the present appeal pertains to the computation and levy of interest under Section 234B of the Act. 6. We note that Section 234B of the Act providing for levy of interest for defau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lt or delay in payment of advance tax. Proof of payment of such tax and interest is to be attached with the return. Further, an Explanation has been inserted in the said sub-section (1) to clarify that where the assessee pays only part of the amount due at the time of filing the return, such payment shall first be adjusted towards the interest payable, and balance, if any, shall be adjusted towards the tax payable 7. On perusal of order impugned passed by the CIT(A) we note that while confirming the levy/computation of interest as made in the Intimation Order, dated 21/10.2019, issued under Section 143(1) of the Act, the CIT(A) had concluded that for the purpose of computing interest under Section 234B(2) of the Act the payments made by an assessee after the first day of April of the relevant Assessment Year should be first appropriated towards interest under Section 234B payable/outstanding and thereafter, the balance towards regular tax. 8. In appeal before us, mounting a challenge to the above conclusion drawn by the CIT(A), the Learned Authorised Representative for the Appellant vehemently contended that payment made by the Appellant after 1st April of the Assessment Year shoul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h regular assessment, on an amount equal to the assessed tax or, as the case may be, on the amount by which the advance tax paid as aforesaid falls short of the assessed tax. Explanation 1. In this section, 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; (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 115JAA58[or section 115JD]. Explanation 2. Where, in relation to an assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act upto the date of payment and thereafter, the interest so computed is to be reduced by the interest, if any, paid under Section 140A of the Act towards the interest chargeable under Section 234B of the Act. The bone of contention in the present appeal is the computation of the aforesaid interest under Section 234B of the Act paid under Section 140A of the Act which in turn impacts the computation of interest under Section 234B(2) of the Act. 13. This takes us to Section 140A of the Act which reads as under: 140A. (1) Where any tax is payable on the basis of any return required to be furnished under section 115WD or section 115WH or section 139 or section 142 or section 148 or section 153A or, as the case may be, section 158BC, after taking into account: (i) the amount of tax, if any, already paid under any provision of this Act; (ii) any tax deducted or collected at source; (iii) xx xx (iv) xx xx (v) xx xx the assessee shall be liable to pay such tax together with interest and fee payable under any provision of this Act for any delay in furnishing the return or any default or delay in payment of advance tax, before furnishing the return and the return shall be accompanied by pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of appropriation which comes into application in case the amount paid by an assessee falls short of aggregate tax and interest (payable as per the returned income). According to the aforesaid Explanation, the amount paid is first to be appropriated towards interest and then towards regular tax. As a result, the aforesaid shortfall in payment made by an assessee on account of application of the aforesaid rule of appropriation of payments would constitute a shortfall in payment of regular tax which can be subjected to compensatory interest. 15. For the purpose of Section 140A(1) of the Act, the interest under Section 234B of the Act is to be computed as per the provisions contained in Section 140A(1B) of the Act which was inserted by way of Finance Act, 2001 (w.e.f 01/04/1989). Section 140A(1B) of the Act prescribes the method of computing interest under Section 234B of the Act payable at the time of filing return of income and provides that for the purpose of Section 140A(1) of the Act, interest payable under section 234B shall be computed on an amount equal to the assessed tax or on the amount by which the advance tax paid falls short of the assessed tax . It would be pertinent to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 140A(2) of the Act which, inter alia, provides that after regular assessment under Section 143 of the Act amount paid under Section 140A(1) of the Act as self assessment tax is deemed to have been paid towards such regular assessment. That being the case, the question of changing the appropriation of amount paid at the time self assessment under Section 140A of the Act between interest and tax on determination of income under Section 143(1)/(3) of the Act does not arise. The Assessing Officer cannot change the amount of interest paid under Section 234B of the Act at the time of filing return of income under Section 140A of the Act on determination of income under Section 143(1)/(3) of the Act. 16. We note that identical view has been taken by the Mumbai Bench of the Tribunal in the case of M/s. Great Easter Shipping Co. Ltd. Vs. DCIT,CC-47 in ITA No.2282/M.2005 passed on 09/04/2008 the relevant extract of which reads as under 5. With reference to the working of interest, the CIT(A) has analysed the provision of section 140A(1B) and 234B(2) and came to a finding which is as under: 4. I have considered the submissions of the Authorized Representative carefully. I find merit in the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e calculation of interest u/s 234B made by the assessee is in accordance with the provisions of the Act. 6. Nothing has been brought on record by the DR how this order of the CIT(A) is not correct. The CIT(A) has correctly analyzed the provisions and examined the working given by the assessee and the Assessing Officer and given the directions. We do not find any reason to interfere with the orders of the CIT(A). 7. In the result, appeal dismissed. 17. Similarly, in the case of Patson Transformers Ltd. Vs. Deputy Commissioner of Income Tax, Special Range VII [2006] 6 SOT 673 (AHD), Co-ordinate Bench of the Tribunal had, while examining identical issue in similar facts and circumstances, held as under: 14. In the light of above discussion, we are of the considered view that adjustment towards interest payable under section 234B is to be considered only at the time of filing return of income i.e., when payment of self-assessment under section 140A is required to be made. Before that interest under section 234B is independently required to be calculated only in accordance with the provisions provided in section 234B(i). If at the time of filing return it is found short payment after ad ..... X X X X Extracts X X X X X X X X Extracts X X X X
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