TaxTMI 
TaxTMI 
2006 (4) TMI 193
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....O dt. 4th March, 1996, giving effect to the order of the CIT(A) the total income of the assessee was worked out at Rs. 11,080. The assessee had given credit in respect of TDS of Rs. 3,82,951 and advance tax paid at Rs. 1,30,032, totalling to Rs. 5,12,983. While giving effect to the order of the CIT(A), some adjustment were made and the assessee was also granted interest under s. 244A at Rs. 2,52,828, vide order dt. 4th March, 1996. Subsequently, the AO initiated reassessment proceedings and the reassessment of the assessee was completed under s. 143(3) r/w s. 147 of the Act vide order dt. 20th Oct., 1997 and the assessee's gross total income was recomputed at Rs. 80,55,145. The assessee challenged this impugned order before the CIT(A), who gave relief to the assessee to the extent of Rs. 75,18,734. The AO passed order on 10th March,1999 giving effect to the appellate order of the CIT(A) and the total income of the assessee was recomputed at Rs. 5,36,410. Again, reassessment proceedings were initiated under s. 147 of the Act and reassessment of the assessee was completed vide order on dt. 14th March, 2002 and worked out the total income of the assessee at Rs. 9,36,870. The assessee ....
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....; 6,85,058 (31-3-1995 to 14-3-2002) --------- Balance payable 6,31,118 Less: Demand adjusted from the refunds due to K.C. Thomas for the asst. yrs. 1987-88, 1988-89, 1990-91, 1991-92 on 18-9-1995 1,10,615 --------- Balance payable 5,20,503 Less: Demand paid as per a....
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....sp; 14,71,319" ---------- In the said order, the AO charged interest under s. 234B(3) of the IT Act, 1961 for the period from 31st March, 1995 to 14th March, 2002 at Rs. ,85,058. The assessee filed an application under s. 154 of the Act to the AO stating that in the order dt. 10th Nov., 2003, giving effect to the order of the CIT(A) dt. 29th July, 2003 and the judgment of the Hon'ble High Court of Kerala in ITA No. 45 of 2003 dt. 22nd Aug., 2003, interest under s. 234B(3) of the Act was charged from 3rd March, 1995 to 14th March, 2002, i.e. from the date of original assessment order under s. 143(3) to the date of reassessment under s. 143(3) r/w s. 47 of the Act. Further it was stated that the original assessment order passed under s. 143(3) after giving effect to the order of the CIT(A) total income of the assessee was computed at Rs. 1,080 and tax payable was Nil. It was further state....
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.... liable to pay advance tax and if the assessee has failed to pay the same or if the advance tax paid by the assessee is less than the 90 per cent of the assessed tax, then the assessee is liable to pay interest under sub-s. (1) of s. 234B. He further submitted that the legislature has added Expln. 1 defining the assessed tax and while working out the assessed tax, the tax deducted or collected at source is to be reduced. In the case of the assessee, first assessment was completed under s. 143(3) vide order dt. 30th March, 1995 and after giving effect to the appellate order of the CIT(A) the assessee's income was computed at Rs. 11,080. Hence, as per the first assessment order, final income of the assessee was Rs. 11,080 and there was no liability to pay any advance tax. Subsequently, on two occasions the assessments were completed under s. 143(3) r/w s. 147, as the proceedings under s. 147 for both the occasions were initiated. Finally, the assessee's assessment was completed by the AO vide order dt. 14th March, 2002 and subsequently, the AO passed order dt. 10th Nov., 2003, which is the order giving effect to the order of the CIT(A) as well as to the judgment of the Hon'ble High C....
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....ons of s. 234B of the Act. "234B(1) Subject to the other provisions of this section, where, in any financial year, an assessee who is liable to pay advance tax under s. 208 has failed to pay such tax or, where the advance tax paid by such assessee under the provisions of s. 210 is less than ninety per cent of the assessed tax, the assessee shall be liable to pay simple interest at the rate of one per cent for every month or part of a month comprised in the period from the 1st day of April next following such financial year to the date of determination of total income under sub-s. (1) of s. 143 and where a regular assessment is made, to the date of such regular assessment, on an amount equal to the assessed tax or, as the case may be, on the amount by which the advance tax paid as aforesaid falls short of the assessed tax. Explanation 1.-In this section, "assessed tax" means the tax on the total income determined under sub-s. (1) of s. 143 or on regular assessment as reduced by the amount of tax deducted or collected at source in accordance with the provisions of Chapter XVII on any income which is subject to such deduction or collection and which is taken into account in comp....
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....vant year. Sec. 210 put it mandatory on the assessee to pay the advance tax if he is otherwise liable to pay under s. 208 of the Act, subject to other provisions of the Act and s. 211 prescribes the dates for making the payment of the instalment of the advance tax. As far as the s. 208 is concerned, it is an important section which put the statutory obligation on the assessee, of-course, subject to the provisions of ss. 209, 210 and 211 of the Act. Now if there is a failure on the part of the assessee to pay advance tax, consequence will be the assessee is liable to pay interest under s. 234B. Sub-s. (1) of s. 234B starts with "subject to the other provisions of this section" and again refers to s. 208 and states that if there is a failure on the part of the assessee to pay the advance tax, or if the assessee has paid the advance tax less than 90 per cent of the assessed tax, then the assessee is liable to pay interest. Different Explanations are added to sub-s. (1) of s. 234B. Explanation 1 defines the term "assessed tax". That means total tax determined under sub-s. (1) of s. 143 or on regular assessment. The term "regular assessment" has been defined in sub-s. (40) of s. 2, and ....
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....irst contention of the assessee is that sub-s. (3) of s. 234B is a consequential to sub-s. (1) of s. 234B. As far as the first assessment of the assessee is concerned, there was no tax payable and hence there was no statutory obligation on the part of the assessee under s. 208 of the Act to pay the advance tax. Sub-s. (1) of s. 234B attracts if there is a statutory liability on the part of the assessee to pay the advance under s. 208 read with other provisions of the said chapter. The income of the assessee reached finality for the asst. yr. 1992-93, vide order dt. 10th Nov., 2003. That appears the last order passed by the AO giving effect to the order of the CIT(A) and also the judgment of the Hon'ble High Court of Kerala in ITA No. 45 of 2003 dt. 22nd Aug., 2003 and final income of the assessee was determined at Rs. 23,32,002. It is well settled proposition of law that there cannot be piecemeal assessment in respect of the assessee. The regular assessments can be made only under ss. 143 and 144 of the Act. It is well settled proposition of law that S. 147 is a machinery provision and if the reassessment proceedings are initiated then assessment is set aside to the extent, the rea....