TMI Blog2006 (11) TMI 361X X X X Extracts X X X X X X X X Extracts X X X X ..... eturned income Rs. 2,49,803 together with interest under section 234B and C of Rs. 16,143 totalled to Rs. 2,65,946. The amount paid by was of Advance Tax was Rs. 2,78,664. Hence, there was refund per Return. It is admitted that though instalment due on 15-3-1996 was paid on 25-4-1996, still the appellant was entitled to the credit for the same as self-assessment tax. There was no tax due on due date for filing of return i.e., on 31-10-1996. 2. The CIT(A) had erred in not appreciating the submission of the appellant that the assessee s case is squarely covered by the judgment of the Delhi High Court in case of Dr. Prannoy Roy v. CIT 254 ITR 755, which, in turn, followed Supreme Court judgments reported in 185 ITR 105 (SC) and 169 ITR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd Rs. 89,188 under sections 234A and 234B of the Income-tax Act respectively without giving credit for the amount of Rs. 2,44,704 paid on 25-4-1996. The assessee moved an application under section 154 on 7-5-2002 seeking rectification in the calculation of interest levied under sections 234A and 234B of the Income-tax Act. It was her case that credit for a sum of Rs. 2,44,704 paid on 25-4-1996 should be given while calculating interest under sections 234A and 234B of the Income-tax Act. The Assessing Officer, however, rejected the application with the observation that the assessment made by him did not "need any revision as pointed out" by the assessee s representative. 4. The assessee was not satisfied with the aforesaid order passed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of income. (1) Where the return of income for any assessment year under sub-section (1) or sub-section (4) of section 139, or in response to a notice under sub-section (1) of section 142, is furnished after the due date, or is not furnished, the assessee shall be liable to pay simple interest at the rate of two per cent for every month or part of a month comprised in the period commencing on the date immediately following the due date, and, ( a )where the return is furnished after the due date, ending on the date of furnishing of the return; or ( b )where no return has been furnished, ending on the date of completion of the assessment under section 144, on the amount of the tax on the total income as determined under sub-section ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... meaning of the phrase "advance tax, if any, paid" used in section 234A(1). 7. We shall now turn to the issue relating to levy of interest under section 234B of the Income-tax Act. Interest under section 234B can be levied in two situations. First situation deals with a case where an assessee "liable to pay advance tax under section 208 has failed to pay such tax". In such a situation, interest is charged for failure to pay advance tax or, in other words, for non-payment of advance tax on due dates. The short question is whether the assessee continues to be liable to pay interest even after he has paid the advance-tax though belatedly. The Department wants to charge interest even after the assessee has paid advance tax on the ground tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... due on 15-3-1996 till 31-3-1996. Once it is paid on 1-4-1996, it cannot be said that advance tax due for payment on 15-3-1996 has not been paid or is still outstanding. The element of "non-payment" or "short payment" would cease as soon as the payment is made in full. The resolution of dispute does not require us to find out the meaning of the term "advance tax" but to find out as to when it has been paid. Once the advance tax is paid, whether on due date or belated, the payment so made has to be treated as advance tax paid. In both the sections, we are thus concerned with the situation as to whether advance tax has been paid or not. If it has been paid belatedly, the interest under section 234A/234B would be chargeable upto the date of pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the anticipated liability, before submission of return of income in three ways, namely, by way of "advance tax" before the expiry of the financial year concerned under section 211 of the Income-tax Act; by way of deduction of tax at source under Chapter XVII-B of the Income-tax Act; and by way of payment of tax after the expiry of the concerned financial year but before the submission of the return of income. All of them have one common feature in that they all are payments, in advance, of anticipated tax liability on the returned income. The underlying object of section 234A is to compensate the State Exchequer for the delay in payment of self-assessment tax due to belated submission of the return. It is relevant to mention here that pen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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