TaxTMI 
TaxTMI 
2010 (11) TMI 191
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....v. CIT 254 ITR 755 and Hon'ble Mumbai ITAT in the case of Nitin Murli Reheja 291 ITR (AT) 41 and thus, ought to have held in favour of the appellant and against the AO. 4.1 The ld. CIT(A) completely erred on facts and in law in holding that as per sec.234B(2) the tax paid u/s 140A is to be first adjustable towards interest chargeable u/s 234B which is contrary to the said provision and thus, erred in confirming the decision of the AO. 5.1 The ld. CIT(A) ought to have appreciated the detailed submission of the appellant as made out before the AO vide letter dtd.28.02.2007 and thus ought to have held in favour of the appellant and against the AO. 2. The issue before us is whether taxes paid before due date of filing of return should be treated as advance tax even though paid after close of financial year. In this case, for AY 1994-95, assessment was completed on 16.11.1999. The AO charged interest u/ss 234A, 234B & 234C at Rs.2,64,400/-, Rs.4,38,592/- and Rs. 1,31,588/- respectively, as per details given by the assessee on pages 13 & 14 of the Paper Book. Assessed income was Rs.76,01,800/-. Total tax liability was Rs.34,05,610/-.The AO treated a sum of Rs.7,61,600/....
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..... 6. Before us the ld. AR submitted that any tax paid before the due date of filing of return should be reduced from the assessed tax for the purposes of calculating interest under sections 234A, 234B, 1234C. He referred to the decision of Hon'ble Supreme Court in CIT & Anr. v. Prannoy Roy & Anr. (2009) 309 ITR 231 (SC) wherein also it is held that if taxes are paid before due date of filing of return then no interest under section 234A should be charged thereon. Hon'ble Appex Court had affirmed the judgment of Hon'ble Delhi High Court in Dr. Pronnoy Roy v. CIT (2002) 254 ITR 777 as under:- "Having heard counsel on both sides, we entirely agree with the finding recorded by the High Court as also the interpretation of section 234A of the Act as it stood at the relevant time. Since the tax due had already been paid which was not less than the tax payable on the returned income which was accepted, the question of levy of interest does not arise. Thus, we find no merit in this appeal and the same is dismissed." He accordingly submitted that taxes paid prior to the due date of filing of return which in this case was 31.10.1994 should be treated as advance tax and, therefore,....
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.... of section 139 as applicable in the case of the assessee. Explanation 2.-In this sub-section, "tax on the total income as determined under subsection (1) of section 143" shall not include the additional income-tax, if any, payable under section 143. Explanation 3.-Where, in relation to an assessment year, an assessment is made for the first time under section 147, the assessment so made shall be regarded as a regular assessment for the purposes of this section. Explanation 4.-0mitted by FY 2001, wref 1-4-1989. (2) The interest payable under sub-section (1) shall be reduced by the interest, if any, paid under section 140A towards the interest chargeable under this section. This section as stood for AY 1994-95 provided that interest has to be charged on the amount of tax determined on assessment, reduced by advance tax and other tax deducted or collected at source. The interest has to be calculated for the period commencing on the date immediately following the due date. The due date is the date specified under section 139 (1) which is the date for filing of the return of income. Thus interest under section 234A has to be calculated for the period falling after due da....
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.... of section 143 or 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-section (1) of section 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 computing such total income. On the other hand, section 234C reads as under :- 234C. Interest for deferment of advance tax.-(1) Where in any financial year, the assessee who is liable to pay advance tax under section 208 has failed to pay such tax or the advance tax paid by the assessee on his current income on or before the 15th day of September is less than thirty per cent, of the tax due on the returned income or the amount of such advance tax paid on or before the 15th day of December is less than sixty per cent, of the tax due on the returned income, then, the assessee shall be liable to pay simple interest at the rate ....