Interest under Sections 234A, 234B and 234C required fresh verification of tax payments and dates before final computation.

Interest computation under Sections 234A, 234B and 234C required fresh factual verification of advance tax payments, dividend income, filing dates and self-assessment tax payments. The record did not permit final affirmation of the higher interest figure without examining the statutory framework and the CBDT circular relied on for Section 234A. The entire interest controversy was therefore restored to the jurisdictional Assessing Officer for de novo adjudication, with the demand neither finally sustained nor deleted on merits and only partial relief granted at that stage.

---

---

Issues: (i) Whether the levy of interest under Section 234C of the Income-tax Act, 1961 required fresh examination on the basis of the advance tax already paid and the dividend income received in March 2020; (ii) whether the computation of interest under Section 234A of the Income-tax Act, 1961 required factual verification in the light of the statutory provisions and CBDT Circular No. 9 of 2021 dated 20.05.2021; and (iii) whether the computation of interest under Section 234B of the Income-tax Act, 1961 also required reconsideration.

Issue (i): Whether the levy of interest under Section 234C of the Income-tax Act, 1961 required fresh examination on the basis of the advance tax already paid and the dividend income received in March 2020.

Analysis: The interest computation under Section 234C turned on the correct appreciation of the advance tax paid during the year and the balance income on which tax remained payable. The record showed that the assessee had furnished a working of the interest computation, while the Revenue had not placed the basis of the higher figure before the Tribunal. The issue therefore depended on verification of the tax payments and the residual taxable amount after giving credit for advance tax already remitted.

Conclusion: The matter was restored to the jurisdictional Assessing Officer for de novo adjudication.

Issue (ii): Whether the computation of interest under Section 234A of the Income-tax Act, 1961 required factual verification in the light of the statutory provisions and CBDT Circular No. 9 of 2021 dated 20.05.2021.

Analysis: The levy under Section 234A depended upon the correct period for which default interest was chargeable, which in turn required verification of the due date, the date of filing the return, and the date of payment of self-assessment tax. In view of the reliance placed on the statutory framework and the CBDT circular, the computation could not be affirmed without a factual re-examination of the relevant dates and payments.

Conclusion: The matter was restored to the jurisdictional Assessing Officer for de novo adjudication.

Issue (iii): Whether the computation of interest under Section 234B of the Income-tax Act, 1961 also required reconsideration.

Analysis: Since the computation of interest under Sections 234A and 234C was being reopened for fresh verification of the relevant tax details, the computation under Section 234B was also required to be examined afresh on the same factual record to ensure a correct and complete determination of the assessee's interest liability.

Conclusion: The matter was restored to the jurisdictional Assessing Officer for de novo adjudication.

Final Conclusion: The interest demand was not finally sustained or deleted on merits and the entire controversy relating to interest was sent back for fresh consideration, with the assessee obtaining only partial relief at this stage.

Ratio Decidendi: Where the correctness of interest under Sections 234A, 234B and 234C depends upon verification of tax payments, dates and the applicable statutory framework, the computation should be set aside and examined afresh by the Assessing Officer.

---