TaxTMI 
TaxTMI 
2010 (12) TMI 475
X X X X Extracts X X X X
X X X X Extracts X X X X
....subramaniam Iyer, who was the secretary of the company. The Assessing Officer addressed a letter to the assessee on October 9, 1992, as to why the aforesaid return should not be treated as an invalid return because the return of income was required to be signed and verified by a director of the company or its managing director. The assessee there-upon filed another return on October 15, 1992. The Assessing Officer informed the assessee by his letter dated October 16, 1992, that the earlier return filed on December 31, 1991, was invalid return and the return filed on October 15, 1991, alone was to be treated as the original return of income. The assessee disputed this finding on the grounds that the provisions of section 139(9) and 292B of t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....7(v) of the Act. The Tribunal has held that the appellant is liable to pay interest under section 234B of the Income-tax Act mainly relying on the judgment of the Supreme Court in the case of CIT v. Anjum M. H. Ghaswala [2001] 252 ITR 1. The Tribunal has held that the provisions of section 234B are mandatory and therefore interest under section 234B is liable to be charged. 4. The learned counsel appearing for the petitioner urged before us the following points : (i) No interest can be charged under section 234B on a construction of sections 234B, 210 and 209 of the Act. (ii) Interest cannot be levied retrospectively on the basis of a subsequent event. (iii) Interest cannot be levied on the principle ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ing to the intent or purpose of the Act on the date the return was filed. The test to be applied is whether on the date the original return was filed was the return in conformity with or according to the purpose of the Act. On the date the return was filed the petitioner was admittedly a wholly owned subsidiary of Great Eastern Shipping. It is true that the return was invalid as originally filed because of a defect in the person signing the return. But by virtue of section 139(9) that defect could be cured and was in fact cured. Though the defect was cured on October 15, 1992 it would relate back to December 31, 1991, the date of original filing of the return. Once the return is valid and in conformity with the intended purpose of the Act, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....B of the Act. Section 234B, especially sub-section (1) thereof which is relevant for our purpose reads as under : "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 section 208 has failed to pay such tax or, where the advance tax paid by such assessee under the provisions of section 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-section (1) of section 143 and where a regular assessmen....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s 234A, 234B and 234C. The Supreme Court in no uncertain terms held that the interest is compensatory in nature. The court read the provisions of sections 234A, 234B and 234C as mandatory in character holding that after the amendment in the provisions in the Finance Act, 1987, that with the use of the expression "shall" therein the Legislature clearly indicated that its intention to make the collection of statutory interest mandatory. It is for this purpose that the court proceeded to decide that even the Settlement Commission which was vested with the vast power had no power to waive the interest payable under these provisions. Going by this interpretation of sections 234A, 234B and 234C as given by the Constitution Bench of the Supreme Co....