TMI Blog1999 (4) TMI 121X X X X Extracts X X X X X X X X Extracts X X X X ..... ment' occurring in section 234B(1) and again in Explanation 1(b) thereto appears to have been missed by the learned CIT(A)." 3. We have heard the rival submissions of the parties and carefully perused the orders of the authorities below and the documents placed on record. 4. The facts relating to the issue are that the order was passed for the assessment years 1990-91 and 1991-92 under section 143(1)(a) on 27-8-1991 and 27-3-1992 and interest under section 234B was charged at Rs. 6,364 and Rs. 7,053 for the assessment years 1990-91 and 1991-92, respectively, in the intimation issued under section 143(1)(a) of the Act. The assessee was subsequently assessed under section 143(3) of the Act for the assessment years 1990-91 and 1991-92 on 28-2-1992 and 31-3-1992, respectively, whereupon the interest under section 234B was increased to Rs. 23,096 and Rs. 14,616 for the assessment years 1990-91 and 1991-92, respectively. The enhancement in the interest charged under section 234B of the Act was challenged by the assessee through an application filed under section 154 of the Act stating there in that the Assessing Officer has no power to increase or decrease interest which has been lev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the day following the date of determination of the total income under sub-section (1) of section 143 and where a regular assessment is made as is referred to in sub-section (1), following the date of such regular assessment and ending on the date of reassessment or recomputation under section 147 on the amount by which the total income determined on the basis of' the reassessment or recomputation exceeds the tax on the total income determined under sub-section (1) of section 143 or on the basis of the regular assessment. 6. Our attention was further invited by the learned Departmental Representative to sub-section (4) whereby if an amount on which interest was payable under sub-section (1) or sub-section (3) has been increased or reduced, as the case may be, as a result of an order under section 154 or section 155 or section 250 or section 254 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 interest shall be increased or reduced accordingly. From a comprehensive study of section 234B of the Act, it can be easily understood that the Legislature has brought necessary amendment by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section leads only one interpretation that. the Legislature never intended to empower the Assessing Officer to increase the interest in the regular assessment if framed after the intimation issued under section 143(1)(a) of the Act. The ld. counsel for the assessee further contended that the Legislature was quite conscious in using proper word at a proper place. Since section 234B is a charging section, it should be construed strictly. In support of his contention, he relied on the judgment of the Apex Court in the case of J.K. Synthetics Ltd. v. CTO [1994] 119 CTR (SC) 222 in which their Lordships have held that ordinarily the charging section which fixes the liability is strictly construed but that rule of strict construction is not extended to the machinery provisions which are construed like any other statute. The machinery provisions must no doubt be so as would effectuate the object and purpose of the statute and not to defeat the same. Reliance on the judgment of the Apex Court in the case of A.V. Fernandez v. State of Kerala AIR 1957 SC 657 is also placed in which their Lordships have held that in construing a fiscal statute and in determining the liability of a subject to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax. - (1) Subject to the other provisions of this section, where, in any financial year, an assessee who is liable to pay advance tax under section 208 has failed to pay such tax or, where the advance tax paid by such assessee under the provisions of section 210 is less than ninty per cent of the assessed tax, the assessee shall be liable to pay simple interest at the rate of two per cent for every month or part of a month comprised in the period from the 1st day of April next following such financial year to the 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 --- (a) for the purposes of computing the interest payable under section 140A, the tax on the total income as declared in the return referred to in that section. (b) in any other case, the tax on the total income determined under sub-section (1) of section 143 or on regular assessment, as reduced by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e amount on which interest was under sub-section (1) or sub-section (3) has been increased or as the case may be, the interest shall be increased or accordingly, and --- (i) in a case where 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." 9. From a bare reading of this section it appears to us that the Legislature has prescribed different terminus period upto which interest under this section for default in payment of advance-tax should be charged in different sub-sections of this section under different circumstances. More particularly sub-section (1) deals with the terminus period for those cases in which the assessment was made under sub-section (1) of section 143 and where a regul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e tax is to be charged till the date of the determination of total income under section 143(1) and where a regular assessment is made, till the date of such assessment. However, on the basis of the language used in section 234B, a view has been taken in certain quarters that if interest has already been charged in a case till the date of determination of total income under section 143(1), the Assessing Officer cannot further levy the interest till the date of regular assessment. In order to set the aforesaid doubts at rest, the Bill seeks to amend section 234B to clarify that an assessee shall be liable to pay interest for default in payment of advance tax till the determination of the total income under section 143(1) and where a regular assessment is made, till the date of such assessment. This legislative intention has been achieved by the substitution of the word 'and' for 'or' in sub-section (1). As a result of the amendment, the defaulting assessee shall be liable to pay interest for default in payment of advance tax till the determination of total income under section 143(1) and where regular assessment is made till the date of such regular assessment." 10. The above legis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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