TaxTMI 
TaxTMI 
2009 (12) TMI 542
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....ng company filed a loss return for the assessment year 1999-2000 and the Assessing Officer while issuing intimation under section 143(1)(a) granted refund of above Rs. 8 crores. However, later, the assessment was reopened and income escaping assessment was made under section 147 of the Act on January 28, 2004, assessing the net income of over Rs. 16 crores. Even though interest for non-payment of advance tax could be demanded under section 234B(3), pursuant to the revised assessment under section 147, no such interest was levied. However, the assessment was again revised under section 147 on August 31, 2006, revising the income to around Rs. 44 crores. In the course of making the second revision of assessment under section 147, the Assessin....
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....ompleted under section 147. Standing counsel appearing for the respondent on the other hand con-tended that since interest under section 234B is mandatory it could be levied under any proceeding whether it be in original assessment or in revised assessment. He has also brought to our attention the decision of the Supreme Court in CIT v. Anjum M. H. Ghaswala [2001] 252 ITR 1 wherein Constitution Bench of the Supreme Court has held that interest under sections 234B and 234C is mandatory in nature. 3. Section 234B is as follows : "234B. Interest for defaults in payment of advance tax.-(1) Subject to the other provisions of this section, where, in any financial year, an assessee who is liable to pay advance tax under section 208 ha....
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.... a month comprised in the period commencing on the day following the date of determination of total income under sub-section (1) of section 143 and where a regular assessment is made as is referred to in sub-section (1) following the date of such regular assessment and ending on the date of the reassessment or recomputation under section 147 or section 153A, on the amount by which the tax on the total income determined on the basis of the reassessment or recomputation exceeds the tax on the total income determined under sub-section (1) of section 143 or on the basis of the regular assessment aforesaid. (4) Where, as a result of an order under section 154 or section 155 or section 250 or section 254, or section 260 or section 262 o....
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....sed under section 147 on January 28, 2004, which led to a demand of tax on a positive income of above Rs. 16 crores as against loss of around Rs. 7 crores initially accepted by the officer based on the revised return filed. Admittedly, interest that should have been levied under section 234B(3) was not levied in the course of the first revision of assessment completed under section 147 on January 28, 2004. The conten-tion of the assessee that interest under section 234B(3) cannot be levied without levying interest under section 234B(1) is not tenable because there may be cases, as in this case, in the original assessment there may not be any short fall in payment of advance tax which does not give rise to liability for interest under sectio....
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.... of advance tax with reference to the original assessment and it is levied for the commencing from the date of completion of original assessment till date of completion of revised assessment under section 147. When the sec-tion contemplates levy of interest in stages, interest under section 234B(3) could be levied in all the reassessments completed under section 147. Therefore, interest could be levied under section 234B(3) in the second revision of assessment under section 147 even if in the first reassessment proceeding completed under the very same provision, interest under sec-tion 234B(3) was not levied. We, therefore, hold that the omission of the officer to levy interest under section 234B(3) in the first reassessment com-pleted unde....