Applicability of interest u/s 234-B and C

[Sunil K. Jain]

Can the interest u/s 234-B and 234-C imposed where the assessment has been completed after proceedings u/s 147/148. Pl also provide the case law.

[CAGOPALJI AGRAWAL]

Interest u/s 234B would be leviable on the assessed tax in terms of the regular assessment made u/s 147 as per the explanation 2 to section 234B. But the interest u/s 234C is not leviable as the same is levied on shortfall of tax on RETURNED INCOME only not on assessed income.

AI Summary

Interest Applicable Under Section 234-B for Assessments Post Section 147 Proceedings; Section 234-C Not Applicable A query was raised about the applicability of interest under sections 234-B and 234-C of the Income Tax Act when assessments are completed following proceedings under sections 147/148. The response clarified that interest under section 234-B is applicable on the assessed tax as per a regular assessment under section 147, according to explanation 2 of section 234-B. However, interest under section 234-C is not applicable, as it is only levied on the shortfall of tax on returned income, not on assessed income.