ITAT Pune directs AO to recalculate interest on assessed income under section 234C

The ITAT Pune allowed the appeal, directing the Assessing Officer to re-calculate interest under section 234C on the assessed income, emphasizing that interest under section 244A is due on self-assessment tax paid until the refund date. The judgment was pronounced on 12th June 2015.

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Issues:
- Challenge to order of CIT(A) regarding interest under section 234C of the I.T. Act
- Challenge to order of CIT(A) regarding interest under section 244A of the I.T. Act on self-assessment tax paid

Analysis:
1. The appeal challenged the CIT(A) order regarding interest under sections 234C and 244A of the I.T. Act for A.Y. 2006-07.
2. The assessee contested the CIT(A)'s decision not to re-calculate interest under section 234C and not to grant interest under section 244A on self-assessment tax paid.
3. The Assessing Officer rejected the claim for re-computation of interest under section 234C as interest is chargeable on the income returned.
4. The CIT(A) upheld the Assessing Officer's decision, stating that interest is chargeable on the total income declared in the return of income.
5. Regarding interest under section 244A, the Assessing Officer denied it as the refund was due to self-assessment tax paid.
6. The CIT(A) agreed with the Assessing Officer, stating that interest under section 244A is not applicable if the refund arises from self-assessment tax.
7. The ITAT Pune considered the arguments and cited precedents to rule that interest under section 244A is due on self-assessment tax paid until the refund date.
8. The ITAT Pune also addressed interest under section 234C, emphasizing that interest should be computed on the assessed income if it falls below the returned income.
9. The ITAT Pune referred to the provisions of section 234C and exceptions for underestimation, concluding that interest under section 234C should apply to the assessed income when it is lower than the returned income.
10. Consequently, the ITAT Pune allowed the appeal, directing the Assessing Officer to re-calculate interest under section 234C on the assessed income.
11. The judgment was pronounced on 12th June 2015.

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