TaxTMI 
TaxTMI 
2017 (2) TMI 500
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....d CIT (A) erred in upholding that interest u/s 234A amounting to Rs. 9,45,492/- been rightly charged, in spite of holding that interest will not be chargeable on the amount of tax paid before filing the income tax return. 3. That the learned CIT (A) erred in not directing of assessing officer categorically that interest u/s 234B of the Act should be calculated after giving due credit of taxes paid by the appellant on various dates during the period April 2010 to March 2011, amounting Rs. 1,20,00,000/-. 4. That the order of CIT (A) is not based on correct facts and judicial precedents relied upon by the appellant and therefore deserve to be set aside." 2. The facts in brief of the case are that the return of income for the year under consideration was filed on 28/03/2011, declaring income of Rs. 4,64,15,807/-. The case of the assessee was selected for scrutiny and notice under section 143(2) of the Income-tax Act, 1961 (for short "the Act") was issued and served within stipulated period. In the scrutiny assessment completed under section 143(3) on 15/02/2013, the total income was assessed at Rs. 4,64,43,585/- after making a disallowance of Rs. 27,778/- to the returned incom....
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.... The learned Authorized Representative in this connection relied on the decision of the Hon'ble Delhi High Court in the case of Dr. Pannoy Roy (supra), further affirmed by the Hon'ble Supreme Court, wherein it is held that, interest being compensatory nature cannot be levied under section 234A of the Act, even if the taxes paid beyond the financial year ending of the relevant for assessment year and interest under section 234A shall be payable on the tax due after reducing the amount of taxes already paid before the due date of filing of return and, thereafter, from the date of payment of tax till the date of filing of return after reducing the amount of such tax so paid. Further, the learned Authorized Representative relied on the following decisions: (i) Sachin Jain versus DCIT(2012) 13 ITR(Trib) 161 Delhi (ii) Mrs Sheela JaiSingh versus ACIT (2007) 13 SOT 617 (Mum.) (iii) Nitin Murali Raheja versus assistant Commissioner of income tax (2007) 105 ITD 414 (Mumbai). (iv) Tarika Exports versus assistant Commissioner of income tax (2011) 129 ITD 365 (Ahd) (v) Epari Sadasiva Rao (HUF) versus assistant Commissioner of income tax (2012) 18 ITR(Trib.) 569 (Cuttack) 3.2 ....
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....est under section 234A of the Act. We may like to reproduce relevant part of section 234A of the Act as under: "Interest for defaults in furnishing return of income. 234A. (1) Where the return of income for any assessment year under sub-section (1) or sub-section (4) of section 139, or in response to a notice under sub-section (1) of section 142, is furnished after the due date, or is not furnished, 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 commencing on the date immediately following the due date, and,- (a) where the return is furnished after the due date, ending on the date of furnishing of the return; or (b) where no return has been furnished, ending on the date of completion of the assessment under section 144, on the amount of the tax on the total income as determined under sub-section (1) of section 143, and where a regular assessment is made, on the amount of the tax on the total income determined under regular assessment, as reduced by the amount of,- (i) advance tax, if any, paid; (ii) any tax deducted or collected at source; (iii) any rel....
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.... well known that in case of doubt or dispute, taxation statute must be liberally construed. We, therefore, are not in a position to assign stringent meaning to the words advance tax as submitted by Mr. Khanna, learned counsel for the revenue." 3.8 Further, in para-27 of the judgment, the Hon'ble High Court held as under: "27. We are, therefore, of the opinion that interest would be payable in a case, where tax has not been deposited prior to the due date of filing of the income-tax return." 3.9 The Hon'ble Supreme Court in the case of CIT Vs. Pranoy Roy and Anr. ( supra) in para-7 of the judgment, has held as under: "7. 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." 3.10 Thus, it is evident that the interest would be payable in a case where taxes not been deposited prior to the due date of filing of income tax return. 3.11 In the case of the assessee, part of the tax due has been paid before the due date of filing of return and the balance has been paid after the due date o....
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....f the said amount while calculating interest under section 234A of the Act. 3.16 In the case of Tarika Exports (supra), the Tribunal concluded that interest under section 234A of the Act is not chargeable from the first day of next financial year to the due date of filing of return and hence tax paid before the due date of filing of return has to be excluded while computing interest under section 234A of the Act. 3.17 In the case of Epari Sadasiva Rao (HUF) (supra) also, the Assessing Officer was directed to rectify the claim of levy of interest under section 234A of the Act in accordance with the decision of the Hon'ble Delhi High Court in the case of Dr. Prannoy Roy (supra). 3.18 The finding of the Hon'ble Supreme Court in the case of Dr. Prannoy Roy (supra) has also been noted by the Central Board of Direct Taxes (CBDT) and the Circular No. 2/2015 has been issued on 10/02/2015, which reads as under: "Circular 2/2015 F. No. 385/03 /2015-IT(B) Government of India Ministry of Finance Department of Revenue Central Board of Direct Taxes (CBDT) North Block, New Delhi 10 th February, 2015 Subject: Chargeability of Interest under Section 234A of the I....
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.... 2011 by the assessee, the learned Authorized Representative has cited the decision of the Tribunal in the case of Sachin Jain(supra). In the case of Sachin Jain (supra), the self-assessment tax was paid in the month of November, 2006 i.e. after the due date of filing of the Return and the return was filed in November, 2007. The Tribunal in the case directed the Assessing Officer to compute the interest under section 234A for the period from December 2006 to November, 2007 on the amount of assessed tax after reducing the amount of self-assessment tax paid in November, 2006. 3.22 We find that in the judgment of the Hon'ble Delhi High Court in the case of Dr. Prannoy Roy(supra) in para 27, it is clearly held that interest would be payable in a case where tax has not been deposited prior to the due date of filing of the income tax return. Further, Hon'ble Supreme Court also in the case of Dr. Prannoy Roy (supra) clearly held that when 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, both the Hon'ble Delhi High Court and Hon'ble Supreme Court has held that cred....