Interest U/S 234 B & 234C is not applicable for 44 AD income for Assessment Year 2015-16

[KASHYAP PRITHANI]

My client has filed his ROI for Assessment Year 2015-16 in the year 2022.

The A.O while passing the order has added interest U/S 234B, & 234C in his computation of income.

Interest u/s 234B & C has been included for 44AD income after the amendment of Advance Tax provisions by the Finance Act 2016 (No. 28 of 2016) which is effective from 01-06-2016 for Assessment Year 2017-18.

Is there any case law available in support of the above facts.

AI Summary

Interest Under Sections 234B and 234C Challenged for AY 2015-16; Amendment Effective from AY 2017-18 Onwards A client filed their return of income for the Assessment Year 2015-16 in 2022, and the Assessing Officer added interest under Sections 234B and 234C, applicable post the Finance Act 2016. The client questioned this addition, as the amendment effective from June 1, 2016, applied to the Assessment Year 2017-18 onward. Initially, it was noted that advance tax was required pre-amendment. However, it was later clarified that prior to the Finance Act 2016, advance tax provisions did not apply to income under Section 44AD. The Supreme Court case CIT v. Vatika Township Private Limited supports non-retrospective application of tax amendments.