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2020 (10) TMI 428 - HC - Income TaxInterest u/s 234 A, B & C - Whether such an order is a regular assessment which alone attracts such levy of interest? - AO held that the assessee is not carrying on any business activity and treated it as an Association of Persons and completed the assessment - Whether assessee is not carrying on any business activities, whether the authorities were justified in holding that the respondent – assessee is a firm and not an Association of Persons? - HELD THAT:- The interest under Section 34A(1) of the Act is levied under the circumstances mentioned therein namely where the return of income has not been furnished under sub- Sections (1) and (4) of Section 139 or in response to the notice under sub-Section (1) of Section 142 and / or is not furnished after due date. Assessee is liable to pay simple interest at the prescribed rate for every month. It is also not in dispute that if an order of assessment get effaced, it ceases to exist and a fresh order of assessment has to be passed - in the case of MODI INDUSTRIES [1995 (9) TMI 324 - SUPREME COURT] has held that the expression ‘regular assessment’ has to be deemed to have been completed on the date when first order of assessment has been passed and not when modified order of assessment has been passed, as the assessee cannot be penalized for lapse of time between the first assessment order and modified assessment order without there being any fault on his part. Therefore, the interest under Section 234A can be levied upto the date of first assessment order only. ‘Assessment’ as defined under Section 2(28) of the Act has a comprehensive meaning and includes all steps and proceedings taken for determination of tax payable and for imposing liability on the assessee. It includes reassessment as well. Therefore, even after the matter is remitted, an order of assessment is passed, the same is referable to Section 143 or Section 144. Explanation- 3 only protects the assessee from levy of interest and confines the same when the original order of assessment is passed and not when the modified order of assessment is passed - Decided against assessee.
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