TaxTMI 
TaxTMI 
2018 (1) TMI 669
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....ciating the legal position laid out in this regard correctly. 3. The learned CIT(Appeals) is not correct, to hold that date up to which enhanced interest u/s.234B(4) to be charged is not specified in subsection (4) and, therefore, Explanation-1 to section 234B will hold good. 4. The learned CIT(Appeals) omitted to appreciate the text of subsection (4) of section 234B to read the amount on which interest was payable under subsection (1) or subsection (3) has been increased or reduced, as the case may be, the interest shall be increased or reduced accordingly, ... 5. The learned CIT(Appeals) is thus not correct to hold that interest u/s.234B(4) was to be charged up to the date of regular assessment u/s.143(3) made for the first time on 22/03/1996. 6. The learned CIT(Appeals) ought to have held that the enhanced interest u/s.234B(4) ought to have been charged up to the date of reassessment u/s.147 made on 20/03/2000 as is clear from the wording of subsection (4) of section 234B. 7. The orders of the CIT(Appeals) may be vacated by ruling that interest u/s.234B(4) be levied up to the date of reassessment made u/s.147 on 20/03/2000. 8....
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....re, as a result of an order u/s 154 or section 155 or section 250 or section 155 or section 260 or section 262 or section 263 or section 264 or an order of the Settlement Commission under sub-section (4) of section 245D, the amount on which interest was payable under sub-section (1) or sub-section (3) has been increased or reduced, as the case may be, the interest shall be increased or reduced accordingly, and (i) In a case where the interest is increased, the AO shall serve on the assessee a notice of demand in the prescribed form specifying the sum payable and such notice of demand shall be deemed to be a notice under section 156 and the provisions of this Act shall apply accordingly; (ii) In a case where the interest is reduced, the excess interest paid, if any, shall be refunded." g) It is clear from the above that u/s 234B(4), interest payable u/s 234B(1) shall be increased or reduced but it has not specified the period for which it will be levied, since the period already stands specified in Section 234B(1). Hence the period of charging interest u/s 234B would be as specified under section 234B(1) i.e. the 1st day of April next following financial y....
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....able until the date of the second reassessment order passed u/s 147 when such interest was not charged u/s 234B(1) in the original assessment order passed u/s 143( I) of the Act as well as in a first reassessment order passed u/s 147. In its decision date 12.02.2009 the Hon'ble Court held, inter alia, that: "It is clear beyond doubt from the above provisions that interest payable under section 234B(1) could be levied even in a reassessment completed under section 147 on excess short-fall of advance tax, consequent to increase in demand of tax pursuant to revision of assessment under sect inn 147 ........... In fact interest under section 234B(3) is on the differential amount of short-fall of advance tax with reference to the advance tax found to have been paid in the original assessment. In this case, when the revised loss return was accepted, in original assessment there was no liability for any advance tax and, so much so no interest was found payable under section 234B(1). Therefore the differential amount on which interest could be demanded under section 234B(3) is actually on the total short-fall in advance tax payable with reference to the revis....
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....234B of the Act is to be levied. According to the assessee, the levy of interest u/s 234B of the Act is only from 01.04.1993 to 22.03.1996, being the date of original assessment u/s 143(3) of the Act, which will amount to Rs. 1,02,49,178. According to the Assessing Officer, the levy of interest u/s 234B of the Act has to be for a period from 01.04.1993 to 20.03.2000, being the date up to the reassessment u/s 147 of the I.T.Act, amounting to Rs. 1,45,61,506. To understand / examine the controversy, it is necessary to list out the chronology of dates of the orders of assessments, reassessments and orders giving effect etc., which are as under:- Sl. No. Particulars Date Assessed Income Tax Liability 1. Return of Income filed on 30/12/1993 u/s 139(1) 30 Dec 1993 4,03,00,000 2,08,55,250 2. Revised Return of Income filed on 29/03/1995 29 Mar 1995 3,72,30,440 3. Assessment order passed by AO u/s 143(3) dated 22/03/1996 22 Mar 1996 21,55,66,620 11,15,55,726 4. CIT(A) passed order dated 25/09/1996 u/s 250 25 Sep 1996 Partially allowed 5. Appeal effect order dated 05....
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.... dated 22.03.1996 had assessed the total income at Rs. 21,55,66,620, however, the same was reduced while giving effect to the CIT(A)'s order to Rs. 12,95,52,690 (order giving effect to CIT(A)'s order dated 25.09.1996). The amount assessed subsequent to the order of the CIT(A), viz., a figure of Rs. 12,95,52,690 is to be substituted for the figure of Rs. 21,55,66,620 being the original assessed figure u/s 143(3) of the Act, since the appellate proceedings is only a continuation of the assessment proceedings. When the assessed income has been substituted with a figure of Rs. 12,95,52,690, the assessment completed u/s 147 was at an income of Rs. 14,70,65,440 (higher figure). Therefore, there is an increase in the assessed income by virtue of reassessment order passed u/s 147 of the Act. In this context section 234B(3) will have application. 6.2 Moreover, section 234B(3) specifically states about order of reassessment or re-computation u/s 147 of the Income-tax Act and states that interest u/s 234B had to be computed upto the date of reassessment / re-computation, whereas section 234B(4) is concerning levy of interest while giving effect of appellate order, rectification order, revi....