TaxTMI 
TaxTMI 
2011 (11) TMI 178
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....y Assessing Officer under Section 234C amounting to Rs.4,17,074.00? 2. Whether the payment of installment is based upon the intimation dated 04.11.2004 given by the principal about earning of commission is a matter of deliberation and debate?" 2. The appellant is a company and the assessment year in question is 2004-05. During the said assessment year the appellant had paid advance tax as per the details given below : "Advance tax date Advance tax paid 12-6-2004 4,75,000.00 12-6-2004 75,000.00 14-9-2004 6,00,000.00 14-12-2004 1,25,00,000.00 15-12-2004 23,00,000.00 15-3-2005 50,00,000.00 31-3-2005 25,00,000.00 3. It is noticeable that the assessee had paid advance tax of Rs.1,25....
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....th day of September is less than forty-five 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 seventy-five per cent of the tax due on the returned income, then, the company shall be liable to pay simple interest at the rate of one and one-half per cent per month for a period of three months on the amount of the shortfall from fifteen per cent or forty-five per cent. or seventy-five per cent, as the case may be, of the tax due on the returned income; (ii) The advance tax paid by the company on its current income on or before the 15th day of March is less than the tax due on the returned income, then, the company shall be liable to pay simple interest at t....
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....e: Provided that nothing contained in this sub-section shall apply to any shortfall in the payment of the tax due on the returned income where such shortfall is on account of under-estimate or failure to estimate - (a) The amount of capital gains; or (b) Income of the nature referred to in sub-clause (ix) of clause (24) of section 2, and the assessee has paid the whole of the amount of tax payable in respect of income referred to in clause (a) or clause (b), as the case may be, had such income been a part of the total income, as part of the remaining instalments of advance tax which are due or where no such instalments are due, by the 31st day of March of the financial year 1933. Explanation : In this section, "tax due on the returned incom....
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....wn and this discretion had generated litigation. Sections 234A, 234B and 234C were inserted to provide mandatory charging of interest. The aforesaid provisions including Section 234C are applicable automatically. If there is default or deferment of payment of advance tax as required under Sections 208 to 211, interest under Section 234C is chargeable. Interest under Section 234C is required to be calculated and mentioned in the return of income and is payable along with self assessment tax by the assessee. The aforesaid sections have been held to be constitutional valid in several decisions of the High Courts on the ground that the interest provisions are not penal but merely compensatory in character. Interest is payable because the Govern....
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....tory and automatic, then the reason, cause for the delay and justification for deferment of advance tax, loses significance and importance. Whatever be the reason, when there is deferment in payment of advance tax as the stipulated amount has not been paid on the required date as per Section 211, compensatory interest under Section 234C becomes payable. It does not matter if there was a good cause or sufficient reason why installment could not be paid. Section 234C is a complete code in itself and the proviso to sub-section (1) to Section 234C provides two exceptions when deferment or shortfall in the payment of installment of advance tax can be condoned and taken into consideration for computing interest under the said Section. This is pos....