2009 (7) TMI 57

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....est under Section 220. (3) As interest by its very nature is compensatory whether charging of interest for late filing of returns being arbitrary is consequently unconstitutional. 2. A few facts may now be set out. 1st April, 1989 and 31st March, 1990 is the Previous Year for the assessment year 1990-91. The petitioner paid some advance tax by instalments on 14th September, 1989, 14th December, 1989 and 31st March, 1990. The due date for filing the return was 30th November, 1990. The return was filed on 31st March, 1992. In terms of Section 143(1)(a) interest payable under Section 234B is at the rate of 2% from 1^st April, 1990 to 31^st March, 1992 Notice was issued on 7^th May, 1992 and served on the petitioner on 2^nd June, 1992.....

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....d. The Revision Application was preferred by the petitioner before the 1^st respondent which came to be rejected on 28^th December, 1994 and consequently the present petition. 3. We now consider the first contention as to whether interest should be charged upto the date of intimation under Section 143(1) or regular assessment under Section 143(3). The language of Section 234B, in our opinion, is devoid of any ambiguity. Under Section 234B(1) an assessee who is liable to pay advance tax has and failed to pay such tax or the advance tax paid is less than ninety per cent of the assessed tax, shall be liable to pay simple interest at the rate of one per cent every month or part of a month comprised in the period from the 1^st day of April ne....

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....payable is interest in terms of the demand made under Section 156 and on failure by the assessee to pay the said amount within 30 days of the service of notice. This is unconnected to the demand or failure to pay advance tax as contemplated under Section 234B. Therefore, the interest payable being payable under two different heads, it is not possible to accept the contention sought to be advanced on behalf of the assessee that once interest is paid under Section 234B no interest is payable under Section 220 of the IT Act. The second contention must, therefore, be rejected. On facts here, we find that the petitioner has paid interest under Section 220 from 1^st April, 1990 to 31^st Mach, 1993. Considering the language of Section 220 tax w....