TaxTMI 
TaxTMI 
2006 (3) TMI 99
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.... was right in holding that interest paid under section 234B and 234C forms part of the tax paid to be deducted to arrive at the taxable income? 2. Whether, on the facts and circumstances of the case, the Tribunal was right in holding that the question whether interest under sections 234B and 234C forms part of the tax is a debatable issue, and cannot be adjusted in proceedings under section 143(1)(a)?" The facts relating to the above questions of law are as under: The assessment year involved is 1991-92 and the corresponding accounting year ended on March 31, 1991. The assessee is an individual and his main income is the share of income from M/s. Basic Engineers and Traders, Chennai. For the said assessment year, the assessee furni....
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....tax Appellate Tribunal allowed the appeal filed by the assessee and set aside the order of the Assessing Officer issued under section 143(1)(a) to the extent of not adding interest under sections 234A, 234B and 234C to the tax portion of the firm for determining the apportionable profit among the partners. Learned senior standing counsel appearing for the Revenue submitted that the Assessing Officer was right in not adding interest payable under sections 234A, 234B and 234C to the tax portion of the firm for determining apportionable profit among the partners. The counsel also relied on the Supreme Court judgment reported in [1961] 42 ITR 57 in the case of Bhor Industries Ltd. v. CIT. Though notice has been served on the respondent/ asse....
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....ent to the assessee specifying the sum so payable, and such intimation shall be deemed to be a notice of demand issued under section 156 and all the provisions of this Act shall apply accordingly; and (ii) if any refund is due on the basis of such return, it shall be granted to the assessee: Provided that in computing the tax or interest payable by, or refundable to, the assessee, the following adjustments shall be made in the income or loss declared in the return, namely:- (i) any arithmetical errors in the return, accounts or documents accompanying it shall be rectified; (ii) any loss carried forward, deduction, allowance or relief, which, on the basis of the information available in such return, accounts or documents, is prim....
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....ithout notice to the assessee and without taking recourse to the regular assessment proceedings. Excluding the interest by the Assessing Officer from the total tax payable by the firm is not a matter enumerated in the list of adjustments that could be made without requiring the presence of the assessee. If the Assessing Officer was of the opinion that the assessee claimed certain benefit to which he is not entitled, then it is for him to initiate appropriate proceedings to assess the assessee instead of making adjustment in the manner which he has done. In this case, the Tribunal considered the scope of section 143(1)(a) and held as follows: "On a consideration of the material made available before the Tribunal and analysing the same in ....
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.... Tribunal, it is clear that the Tribunal considered the scope of section 143(1)(a) and correctly came to the conclusion that the Assessing Officer is wrong in excluding a sum of Rs. 2,13,972 being interest payable under sections 234A, 234B and 234C of the Act from the total tax payable by the firm for determining apportionable profit among the partners. The determination of the said question would have been made by the Assessing Officer only under section 143(2) of the Act and not under section 143(1)(a). It may be true that after exhausting the procedure prescribed under section 143(2) of the Act, the consequence may be the same. We have also gone through the judgment relied on by standing counsel for the Revenue as cited supra, and it has....