TaxTMI 
TaxTMI 
TaxTMI 
2025 (8) TMI 1439
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....ssessee has raised the following grounds of appeal: "1) Whether the Ld. CIT(A) was right in upholding the order dated 29.10.2024 passed u/s. 143(1) of the Income Tax Act, 1961? 2) Whether the Ld. CIT(A) is right in law and on facts in calculating the interest under section 234B of the Income Tax Act, 1961 to the tune of Rs. 1,36,834/- till the date of intimation u/s 143(1) of the Income Tax Act, 1961?" 3. The brief facts of the case are that the assessee filed a return of income under section 139(8A) of the Income-tax Act, 1961 (Act) on 03.04.2023 declaring a total income of Rs.20,47,420/- and duly paid applicable taxes on the return of income filed by him. The return was processed under section 143(1) of the Act vide intimation order ....
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....ther shortfall remains. In the present case, as no change had occurred in the assessed tax at the time of processing of return of income under section 143(1) of the Act, no such further period would apply, and hence, interest till the date of intimation was uncalled for. 5. The CIT(A), after considering the assessment records, statement of facts, grounds of appeal, the intimation u/s 143(1) of the Act, and the rectification order passed by the Department held that as per the section 234B of the Act, interest for shortfall in advance tax liability is mandatory and is required to be levied automatically where advance tax paid is less than 90% of the assessed tax. The CIT(Appeals) held that the CPC had rightly computed the interest under sect....
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....d by CPC till the date of intimation order u/s 143(1) of the Act, ignoring the fact that the assessee has made payment of self-assessment tax prior to that date on 03.04.2023. Upon perusal of the relevant provisions, we find merit in the contention of the assessee that interest under section 234B is required to be computed in two distinct periods. The first period extends from 1st April of the assessment year to the date of payment of self-assessment tax, and the second, from the date of such payment till the date of assessment only to the extent if any further shortfall in tax remains unpaid. In the instant case, since no variation in assessed tax was made at the time of processing under section 143(1) of the Act, and the tax declared in t....
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.... should only have been levied till 03.04.2023 i.e. the date on which self-assessment tax was paid in accordance with section 140A of the Act. However, the rectification request filed by the assessee was rejected by CPC on 14.02.2025. The matter was carried in appeal before the CIT(A), who, after referring to the statutory scheme under section 234B(1) and 234B(2), upheld the action of the CPC by observing that the levy of interest was automatic and mandatory where advance tax paid fell short of 90% of the assessed tax. The CIT(A) held that once self-assessment tax was paid, interest was still chargeable in two phases-till the date of such payment and thereafter, if there was any remaining shortfall, till the date of assessment. Since in this....
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....pparent error within the meaning of section 154 of the Act. The Tribunal, therefore, set aside the orders of the lower authorities and directed CPC to recompute interest under section 234B of the Act only up to the date of payment of self-assessment tax, i.e., 03.04.2023. The appeal of the assessee was allowed. 7. Again in the case of Dhirendra Narbheram Sheth vs. Income-tax Officer Ward-2(3)(5), Rajkot [2023] 147 taxmann.com 150 (Rajkot - Trib.) / [2023] 199 ITD 507 (Rajkot - Trib.) [03-02-2023], the ITAT held that Interest under sections 234A and 234B, being compensatory in nature, can only be levied up to such date of self-assessment and not beyond that period or till date of completion of assessment. 8. Therefore, in light of the fact....