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2018 (1) TMI 1112 - HC - Income TaxChargeability of interest u/s 243B(3) - re-assessment proceedings - Held that:- The re-assessments made eventually led to a total computation of income at ₹ 23,32,002/-, which has acquired finality. The tax dues with surcharge on such computation would come to ₹ 4,59,043/-, 90% of which the assessee was bound to pay as advance tax. The assessee had advance tax and TDS credit of ₹ 5,12,984/, in excess of, even, the tax liability created. Hence, there was no cause for imposition of a liability under Section 234B(1) or under Section 234B(3). In the present case, however, the entire tax assessed on regular assessment; for which there was advance tax payment in compliance with Sections 208 and 210, was set aside and the advance tax paid was refunded to the assessee. The Department also had the benefit of advance tax from 31-03-1992 to 04-03-1996, when the refund was made. Hence, there would be no liability on the assessee under Section 234B(3), since there could not be a liability created from 01-04-1992. There could be no levy of interest under Section 234B(3), since the advance tax on the computation made on re-assessment was, in fact, paid by the assessee in the close of the previous year to the assessment year. Interest paid to the assessee in ordering refund - Held that:- As assessee had obtained a refund of the entire tax paid with interest. Subsequently, a re-assessment was made and the liability to pay advance tax arose again on 31-03-1992; which had been paid but later refunded. We, hence, direct the Department to compute the interest paid to the assessee, in ordering refund, for the amount of ₹ 4,59,043/-, on which a demand would be raised, which would be paid by the assesee. The additional question raised is answered in favour of the Revenue and against the assessee.
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