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2016 (8) TMI 82 - AT - Income TaxInterest levied u/s. 234B(1)- rectification u/s. 154 of the Income Tax Act [Act] for recalculation of interest u/s. 234B - whether the 143(1) order passed earlier is to be considered as an assessment? - Held that:- For the purpose of levy of interest u/s. 234B where it is very clearly mentioned that even processing u/s. 143(1) is also to be considered as an assessment by specifically mentioning in the Section the periods therein then, for the purpose of levy of interest u/s. 234B(3), the period it was already considered in an intimation u/s. 143(1) is to be excluded while calculating the interest u/s. 234B(3). In view of the specific exclusion of the period considered u/s. 234B(1), the balance of the period till the completion of assessment u/s. 147/153A as the case may be was only be considered for levy of interest u/s. 234B(3) on the enhanced amount of tax. The amendment brought out by the Finance Act, 2015 in fact modifies the then existing provisions which are applicable for the impugned assessment years. In fact under the new Sub- Section (3), it was provided that interest will be calculated on the enhanced amount from the period commencing on 1st April next following the relevant financial year for which advance tax was payable and ending on that date of the re-assessment or re computation u/s. 147/153A. Thus, where in a case interest u/s. 234B(1) was levied on regular assessment u/s. 234B(1), enhanced interest was payable for the entire period and not on broken period as it was provided earlier. This is the substance of the amendment brought to Sub-section(3) by the Finance Act, 2015. In view of this, we are of the opinion that the interest u/s. 234B(1) is to be calculated on the originally accepted amount u/s. 143(1) as was done by the AO in the intimations and the enhanced amount is to be levied from the date of intimation till the date of consequential order passed u/s. 143(3) r.w.s. 153A r.w.s. 245D(4) ie on 03-12- 2013. We are not sure whether the AO is correct about the levy of interest in the orders u/s. 154, as the period and calculations were not provided for our examination. In fact there is reduction of demand in AYs 2005-06 and 2009-10. In view of this, we, while allowing the appeals of assessee, direct the AO to modify the interest levied as per the provisions of the Act. - Decided in favour of assessee for statistical purposes.
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