TaxTMI 
TaxTMI 
2018 (1) TMI 1112
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.... 234B(3) of the Income Tax Act, 1961 (for short "Act"). On admission, another Division Bench of this Court, had framed substantial questions of law as raised in the memorandum of appeal. We extract them herein : 1) Whether, on the facts and in the circumstances of the case is the Tribunal right in deleting the interest under section 243B(3) ? 2) Is the charging of interest under section 234B(1) in regular assessment a necessary condition for charging interest under section 234B(3) ? 3) Whether on the facts and in the circumstances of the case the Tribunal is right in law in holding - i) the assessee is not liable to pay the interest under section 234B(3) of the Act ? ii) the Assessing Officer was not jus....
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.... was hence no advance tax payment required and the tax so paid and TDS were liable to be refunded. A re-assessment was proposed under Section 147 and finalised by order dated 20-10-1997, recomputing the total income at Rs. 80,55,145/-. There was a payment of Rs. 3,97, 252/- on 03-08-1998 and 29-09-1998. In an appeal the CIT recomputed the total income of the assessee at Rs. 5,36,410/-. By that time, Rs. 8,76,426/- was refunded on 04-03-1996, which included the advance tax & TDS of Rs. 5,12,984/- the refund adjusted of Rs. 1,10, 615/- and interest of Rs. 2,52,828/-. On further orders passed on 10-03-1999, a further refund of Rs. 1,72,705/- was made. 4. A further re-assessment proceedings initiated, computed the total income of the assesse....
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....t sub-section (3) of Section 234B is a consequential levy from sub-section (1) and only if there is a liability to advance tax, could there be a levy of interest made under sub-sections (1) and (3). The Tribunal found that when the regular assessment was made, there was an addition of income, but, however, by the order of the Commissioner of Income Tax in appeal, the final income under regular assessment was determined at Rs. 11,080/-, on which income, there was advance tax payment made by the assessee far in excess. Hence, there was no liability to interest under Section 234B(1). Section 147, being a machinery provision, when reassessment was made, the total income was determined at Rs. 23,32,002/-. There was payment of advance tax on 31-0....
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....epted by the Tribunal was that if there is no interest payable under sub-section (1) there would be no liability under sub-section (3). A determination of total income or a regular assessment may not give rise to a liability under Section 234B(1) if there is no tax liability or if the advance tax has been paid under Sections 208 and 210. On a re-assessment if the computation of total income is enhanced to the extent of there being created on the assessee an enhanced liability under Sections 208 and 210, then there being no such payment, the liability to interest arises under Section 234B(3). The income determined is for the assessment year and the liability to pay advance tax arises on the 31st March of the previous year. The liability to i....
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....r Section 234B(3) from the 1st April of the next financial year to the date of determination of total income on re-assessment. In the present case, however, the unique facts have to be taken into account. Here, admittedly, Rs. 5,12,984/- was paid as advance tax and TDS on 31-03-1992, the last day of the previous year. Regular assessment was made determining the total income far in excess of that returned. The regular assessment was challenged in appeal, where considerable reduction of income was made. Later, re-assessments were carried out and there were adjustments made from refunds as also payment made against demand raised on reassessment. Refunds were ordered and disbursed. The refunds were made pursuant to proceedings dated 04-03-19....
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....stands to loose, in so far as the re-assessment made of the total income, in loosing the interest from the date on which the refund is made to the date of payment of tax dues. However, we find that the Legislature has not contemplated the peculiar situation of a refund having been made of the advance tax and a reassessment determining escaped income after the refund. The Legislature having not contemplated such a situation and not thought it fit to levy interest, it would not be proper for this Court to re-write the provision by levying an interest, which liability is not available in the statute. 12. In answering the other questions of law, we find that the Tribunal was right in deleting the interest under Section 234B(3) but not on the....