TaxTMI 
TaxTMI 
2013 (5) TMI 15
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....he CIT (A) are as under. 2.1 AO vide order dated 28th March, 2008 completed assessment under section 143(3).He calculated tax payable along with interest under various sections, consequent to additions made and raised demand. AO issued notice dated 6.1.2009 under section 154 proposing to rectify the order dated 28.3.2008 under section 143(3) by enhancing the interest charged under section 234B to Rs.6,72,07,276 as against Rs.6,59,46,319 charged per order under section 143(3). Assessee vide letter dated 12.1.2009 requested AO to provide the manner in which interest of Rs.6,72,07,276 under section 234B was computed so as to enable assessee to put forth its submissions in the matter. AO passed the order under section 154, dated 28.1.09 without granting any opportunity to assessee. 2.2 AO computed interest under section 234B originally as follows: Less: TDS 1,36,75,48,656, 1,13,687 1,36,74,34,968 Less: Advance Tax 1,82,20,00,000 18,54,34,968 Interest under section 234B 1. 1.4.05 to 21.1.08=34 months 18,54,34,968 x 1% 6,30,47,889 2. On Rs.14,49,21,488 i.e. Rs.18,54,34,968 Rs.4,05,13,480 (S.A.Tax paid on 21.01.08) 28,98,430 - From 1.2.08 to 27.3.08 =2 months = 14,49,2....
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....ion itself fastens liability to pay interest on the basis of liability to pay advance tax under section 208 of the Act and failure to pay such tax or where the advance tax paid by assessee under the provisions of section 210 is less than the prescribed percentage of the assessed tax. Section 140A of the Act provides for self assessment. The said section stipulates that where any tax is payable on the basis of any return required to be furnished, after taking into account the amount of tax, if any, already paid under any provision of the Act, assessee shall be liable to pay such tax together with interest payable under any provision of the Act for any delay in furnishing return, or any default or delay in payment of advance tax, before furnishing the return and the return shall be accompanied by proof of payment of such tax and interest. Therefore, merely because some amount is paid beyond the financial year, but before the return is filed; assessee cannot take credit for such payment made beyond the financial year for the purpose of computing interest under section 284B of the Act for the default in payments of advance tax. Thus the period for which the liability to pay interest ar....
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.....7791 & 9213/Mum/2004 and 7450, 8267/Mum/2004 and 523/Mum/2007 dated 21.05.2010. 6. The learned DR however, relied on the orders of the AO and CIT (A). 7. We have considered the issue. The provisions of section 234B are as under: "(2) Where, before the date of determination of total income under sub-section (1) of section 143 or completion of a regular assessment, tax is paid by the assessee under section 140A or otherwise,-- (i) interest shall be calculated in accordance with the foregoing provisions of this section up to the date on which the tax is so paid, and reduced by the interest, if any, paid under section 140A towards the interest chargeable under this section; (ii) thereafter, interest shall be calculated at the rate aforesaid on the amount by which the tax so paid together with the advance tax paid falls short of the assessed tax. 7.2 Provisions of section 140A are as under: 140A. (1) Where any tax is payable on the basis of any return required to be furnished under [section 115WD or section 115WH or] section 139 or section 142 [or section 148 or [section 153A or], as the case may be, section 158BC]], after taking into account,-- (i) the amount of tax, if any, a....
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....ted on the returned income but not on the basis of assessed income. AO, who originally completed the assessment, has correctly calculated as per the provisions of section, whereas the present AO wrongly interpreted the provisions in the order under section 154. 7.4 This issue was elaborately discussed in the order of ITAT in the case of ACIT vs. M/s C.C. Chokshi & Co (Supra) as under: "3.6 The next dispute which is relevant to only A.Y 2000-01 and 2001-02 is regarding computation of interest chargeable under section 234B of the Act. In this case, regular assessments had been made by the AO under section 143(3) and in such cases, in case, the advance tax paid by the assessee is less than 90% of the assessed tax the assessee is required to pay interest at the prescribed rate from first day of next financial year till the date of regular assessment on the amount by which advance tax paid falls short of the assessed tax. The assessed tax has been defined in the Explanation1 to section 234B as tax payable on the total income determined in the regular assessment as reduced by the amount of any tax deducted/collected at source etc. Section 234B (2) further provides that, in case, before....
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....has been defined to mean tax on the total income declared in the return as reduced by an amount of tax deducted/collected at source etc. The CIT(A) has confirmed the approach adopted by the AO against which the present appeal has been filed by the assessee before the Tribunal. 3.6.2 We have heard both parties perused the records and considered the matter carefully. The factual and legal background relating to the issue has already been discussed in the preceding Paras. The section 140A provides that in case payment made under the said section falls short of the tax payable including interest under the said section then the tax so paid shall be first attributed towards the interest and the balance amount shall be adjusted against the tax payable. In this case, the tax payable under section 140A also included interest payable under section 234B. The issue is whether the interest payable under section 234B which has to be first adjusted against the payment made under section 140A has to be calculated with respect to total income as declared in the return or total income determined in the regular assessment. We find that the section 140(1B) provides that interest payable under section....