Interest liability for delayed original return where assessment pursuant to seized-record notice is treated as regular assessment, interest upheld.

Interest under the interest provision is leviable for delay in filing the original return; interest is computed on tax on total income as determined under a regular assessment. Where an assessment is made for the first time pursuant to an assessment notice arising from seized-record proceedings, that assessment is to be treated as a regular assessment for interest computation purposes. Because the assessment in this case was made for the first time pursuant to the seized-record notice, the assessment qualified as a regular assessment and interest for delayed filing was correctly calculated and charged by the assessing officer, and the taxpayer's grounds were dismissed.

---

---

Issues: Whether interest under section 234A of the Income-tax Act, 1961 is leviable where the original return was filed after the due date but a regular assessment was made for the first time pursuant to notice under section 153C (deemed to be under section 153A).

Analysis: Section 234A(1) levies interest for delay in filing the original return computed on the tax on total income as determined under section 143(1) or, where a regular assessment is made, on the tax determined under regular assessment. Explanation 3 to section 234A treats an assessment made for the first time under section 147 or section 153A as a regular assessment for the purposes of section 234A. Under section 153C the assessing officer, after recording satisfaction, assesses the income of the other person in accordance with section 153A; thus an assessment completed pursuant to notice under section 153C for the first time is to be regarded as an assessment under section 153A and hence a regular assessment for section 234A purposes. In the present case the original return was filed after the due date and the assessment was completed for the first time pursuant to notice under section 153C; the assessing officer computed interest under section 234A on the tax as determined in that regular assessment, reduced by TDS/advance tax/self-assessment tax.

Conclusion: Interest under section 234A is leviable and the interest of Rs. 92,153 charged by the assessing officer is upheld.

---