2024 (6) TMI 802

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.... tax liability of Rs. 2,28,114, stood processed, or deemed to be so, in October, 2010, or latest by March, 2012. Interest u/s. 234B(3), which is to be for the period following the date of processing up to the date of reassessment or, as the case may be, recomputation, u/s. 153A in March, 2013, on the increase in the assessed tax, i.e., Rs. 15,36,914, would thus range from a period of 12 months (April, 2012 to March, 2013) to 29 months (November, 2010 to March, 2013) and, thus, vary from 1,84,428 to Rs. 4,45,700, i.e., depending on the time of processing her return u/s. 143(1). The same, computed at Rs. 6,45,503, was thus in excess. The amendment to s. 234B(3) by Finance Act, 2015, w.e.f. 01/6/2015, would not be applicable. As per the Assessing Officer(AO) interest on the differential tax of Rs. 15.37 lacs was to be worked from the first day of the assessment year, i.e., 01/4/2010, up to the date of reassessment/recomputation in March, 2013 and, thus, for a period of 36 months; the relevant part of his order reading as: 'Further, regarding the calculation of interest u/s 234B(3), it may be noted that as per the provisions of section 2348(3), the interest is calculated on th....

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....e date of determination of total income under sub-section (1) of section 143 and where a regular assessment is made, to the date of such regular assessment, on an amount equal to the assessed tax or, as the case may be, on the amount by which the advance tax paid as aforesaid falls short of the assessed tax. Explanation 1.-In this section, "assessed tax" means the tax on the total income determined under sub-section (1) of section 143 and where a regular assessment is made, the tax on the total income determined under such regular assessment as reduced by the amount of,- (i) any tax deducted or collected at source in accordance with the provisions of Chapter XVII on any income which is subject to such deduction or collection and which is taken into account in computing such total income; (ia) any relief of tax allowed under section 89; (ii) any relief of tax allowed under section 90 on account of tax paid in a country outside India; (iii) any relief of tax allowed under section 90A on account of tax paid in a specified territory outside India referred to in that section; (iv) any deduction, from the Indian income-tax payable, al....

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....here the interest is increased, the Assessing Officer 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. (5) The provisions of this section shall apply in respect of assessments for the assessment year commencing on the 1st day of April, 1989 and subsequent assessment years. FA, 2015 substitutes s. 234B(3), which, accordingly, since 01/6/2015, reads as under: (3) Where, as a result of an order of reassessment or recomputation under section 147 or section 153A, the amount on which interest was payable in respect of shortfall in payment of advance tax for any financial year under sub-section (1) is increased, 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 1st day of April next following such financial year and ending on the date of the reassessment or recomputation under section 147 or s....

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....not impacted. 3.3 In the facts of the instant case, income stands assessed in the first instance vide order u/s. 153A on 28.03.2013, which therefore is to be regarded as per regular assessment. The interest charged u/s. 234B upon this assessment is only u/s. 234B(1). The same, thus, and correctly, is for the 36-month period, from April, 2010 to March, 2013. The only adjustment in the said interest is to be upon passing the appellate order u/s. 250(6) on 16/2/2016, i.e., by allowing the assessee credit for the reduction in tax, as originally assessed (Rs. 83,35,990), to that pursuant to the appellate order (Rs. 60,58,729), i.e., in terms of s. 234B(4). The same, as afore-said, has no bearing on the period for which interest stands levied. Accordingly, the only change in the interest as originally charged would be on passing the appellate order, while giving appeal effect thereto, on account of the quantum of 'assessed tax'; the income having been reduced from Rs. 83,35,990 to Rs. 60,58,729. The same has no implication as regards the period of interest, which shall continue to be for the period of 36 months, i.e., the period beginning with the assessment year to the date of origin....