https://www.taxtmi.com/caselaws?id=783629 Interest under s.234A can be levied only as compensatory interest for a subsisting default of unpaid tax. Since the assessee had fully discharged self-assessment tax on 26.02.2022, no tax remained outstanding during March 2022, and interest for that month was impermissible. CBDT Circular No. 2/2015, binding on the Department, clarifies that s.234A interest cannot be charged on self-assessment tax paid before the due date of filing, and the SC ruling in Prannoy Roy similarly bars such levy where tax is already paid. The Department's reliance on the Explanation to s.140A(1) was rejected as inapplicable once liability stood fully satisfied. Interest was directed to be computed only up to 28.02.2022, and the appeal was allowed. en-us Wed, 10 Dec 2025 00:00:00 +0530 Fri, 19 Dec 2025 08:30:25 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=783629 Interest under s.234A can be levied only as compensatory interest for a subsisting default of unpaid tax. Since the assessee had fully discharged self-assessment tax on 26.02.2022, no tax remained outstanding during March 2022, and interest for that month was impermissible. CBDT Circular No. 2/2015, binding on the Department, clarifies that s.234A interest cannot be charged on self-assessment tax paid before the due date of filing, and the SC ruling in Prannoy Roy similarly bars such levy where tax is already paid. The Department's reliance on the Explanation to s.140A(1) was rejected as inapplicable once liability stood fully satisfied. Interest was directed to be computed only up to 28.02.2022, and the appeal was allowed. Case-Laws Income Tax Wed, 10 Dec 2025 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=783629