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2018 (1) TMI 941 - HC - Income TaxLiability for payment of interest under Section 234B - salary income earned by the petitioner outside India - miscellaneous petition before the Settlement Commission contending that there was a mistake apparent on the face of the record as the petitioner is not liable for payment of interest - Held that:- Section 234(A) of the Act provides for payment of interest for defaults in furnishing return of income, Section 234(B) for defaults in payment of advance tax and Section 234 (C) for deferment of advance tax and all the three Sections create liability on the assessee to pay interest for the default committed by him in the circumstances mentioned in the said Section. It was further held that under Section 234(B) which imposes interest is compensatory in nature and not as a penalty. When duty is cast upon the payer to pay the tax at source, on failure, no interest can be imposed on the payee/assessee. Income Tax Settlement Commission proceeds to confirm the demand of interest under Section 234(B) of the Act, which has been held to be not sustainable in the aforementioned decisions. Therefore, the levy of interest is held to be not sustainable and accordingly the question arising for consideration is answered in favour of the petitioner/assessee and against the revenue. Writ Petition is allowed and the impugned order dated 06.07.2009 is set aside and it is held that the petitioner is not liable for payment of interest under Section 234(B) of the Act, in respect of the salary income earned by the petitioner outside India.
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