1997 (12) TMI 159 - AT - Income Tax

Summary

Issues:
Interpretation of section 234-B of the Income-tax Act, 1961 regarding the period for charging interest.

Analysis:
The appeal before the Appellate Tribunal ITAT MADRAS-D arose from an order by the Dy. CIT (Appeals) for the assessment year 1991-92. The sole issue in dispute was the period for which interest under section 234-B of the Income-tax Act, 1961 should be charged. The assessee filed a return on 23-12-1992, which was processed under section 143(1)(a) and later selected for scrutiny. The Assessing Officer levied interest under section 234-B up to the date of regular assessment under section 143(3) of the Act, which was 3-3-1994. The assessee requested the interest to be levied only up to the date of intimation under section 143(1)(a) but the Assessing Officer rejected this request. The learned Dy. CIT(A) decided in favor of the assessee, following a previous Tribunal order. The Revenue appealed this decision.

The departmental representative relied on a decision of the Allahabad High Court to argue that interest should be levied up to the date of regular assessment under section 143(3) of the Act. The assessee's counsel contended that the Allahabad High Court decision was not applicable to the present case and relied on the Tribunal's previous order.

The Tribunal analyzed the provisions of section 234-B, which were inserted and subsequently amended by various Acts. The legislative intent was clarified through amendments to ensure interest is charged until the determination of total income under section 143(1) and, if applicable, till the date of regular assessment under section 143(3). The Tribunal noted that interest should be charged until the date of assessment under section 143(3) in cases of regular assessment. This view was supported by a Special Bench of the Settlement Commission as well.

Consequently, the Tribunal held that the Assessing Officer's decision to levy interest up to the date of regular assessment under section 143(3) was correct. The appeal by the Revenue was allowed, upholding the decision in favor of the Revenue.