TaxTMI 
TaxTMI 
2015 (6) TMI 57
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....which is illegal and bad law. 2. The ld. Commissioner of Income tax(Appeals) has erred in law and on facts in confirming the order u/s. 154 of the Act as it was passed in violation of the principles of natural justice. 3. The ld. Commissioner of Income tax(Appeals) has erred in law, and on facts in concurring with the levy of interest u/s.234B of the Act.". 2. At the time of hearing the ld. AR of the assessee has submitted that the assessee does not want to press Ground No.1 and 2 and the same may be dismissed as not pressed. The ld. DR has no objection if the Ground No.1 and 2 are dismissed as not pressed. Accordingly ground No.1 and 2 are dismissed as not pressed. 3. Ground No.3 is regarding levy of interest u/s. 234B of the A....
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....the assessee and accordingly request of the assessee to reduce interest u/s. 234B was turned down. The assessee challenged the action of the Assessing Officer before CIT(A). The CIT(A) has confirmed the chargeability of interest u/s. 234B by holding that the same is mandatory in nature. 3.1 Before us, the ld. AR of the assessee has submitted that the issue is covered by the judgment of the Hon'ble Jurisdictional High Court in the case of Prime Securities Ltd. Vs. ACIT (Inv.) (2011) 333 ITR 464; and submitted that when there was no failure on the part of the assessee to pay advance tax in accordance with the provisions of section 208 and 209 then the assessee was not liable to pay interest u/s. 234B. 3.2 On the other hand, the ld. ....
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....es clear that the appellant would not be liable to pay interest under section 234B of the Act. Section 234B, especially subsection (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 to....
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.... that purpose the Supreme Court considered the provisions of sections 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....
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....terest under that section, it has to be established that the assessee has committed default in payment of advance tax. In our opinion, as in the present case it is nobody's case that the appellant has committed a default in payment of advance tax when itactually paid it, the appellant cannot be held liable to pay interest under section 2348. In so far as the observations in the order of the Tribunal, that the appellant should have anticipated the events that took place in March, 1992 are concerned, in our opinion, they have no substance. In our opinion, it is rightly submitted that it was not possible for the appellant to anticipate the events that were to take place in the next financial year and pay advance tax on the basis of those a....