Mandatory section 234A interest applies for the full delay until return filing; rectification may correct an under-computation.

Where no return is filed within the due date under section 139(1), interest under section 234A runs for every month or part of a month from the day after the due date until the return is actually furnished. The assessee filed the return only in response to notice under section 148, so the earlier computation of interest for one month was an under-calculation. The rectification order properly enhanced the interest to reflect the full period of default, and the challenge to the increased interest failed.

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Issues: Whether the rectification order enhancing interest under section 234A was valid where the assessee had not filed a return under section 139(1) and filed the return only in response to notice under section 148.

Analysis: The only effective dispute arising from the rectification order was the correction of interest under section 234A. The assessee had not furnished the return by the due date prescribed under section 139(1) and first filed the return on 10.05.2018 in response to notice under section 148. Interest under section 234A is chargeable for every month or part of a month from the date immediately following the due date until the date of furnishing the return. Since the earlier interest was computed only for one month and the rectification order corrected the period of default to the actual delay, the enhancement of interest was in accordance with law.

Conclusion: The rectification enhancing interest under section 234A was upheld and the challenge to the increased interest failed.

Ratio Decidendi: Where no return is filed under section 139(1), interest under section 234A is mandatory for the full period of default from the due date until the date on which the return is actually furnished, and a rectification order may correct an erroneous under-computation of such interest.

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