TMI Blog2010 (11) TMI 191X X X X Extracts X X X X X X X X Extracts X X X X ..... ORDER Per D. C. Agrawal, Accountant Member. This is an appeal filed by the assessee raising following grounds: 1.1 The ld. CIT(A) has erred in law and on facts in confirming the decision of the ld. AO in rejecting to rectify apparent mistakes on records pointed out by the appellant in charging interest u/s 234A and u/s 234B of the IT Act. 2.1 The ld. CIT(A) erred on facts and in law in holding that the tax paid before the due date of filing the returns of income cannot be reduced while working out interest u/s 234A of the IT Act and thus confirmed the action of the AO. 3.1 The ld. CIT(A) ought to have appreciated the submission of the appellant as made out before the AO in detail vide letter dtd.28.02.2007 in this regard relying on the decision of Hon ble Delhi H.C. in the case of Dr. Pronnoy Roy v. CIT 254 ITR 755 and Hon ble Mumbai ITAT in the case of Nitin Murli Reheja 291 ITR (AT) 41 and thus, ought to have held in favour of the appellant and against the AO. 4.1 The ld. CIT(A) completely erred on facts and in law in holding that as per sec.234B(2) the tax paid u/s 140A is to be first adjustable towards interest chargeable u/s 234B which is co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f interest u/s 234A of the IT Act. 4. The AO rejected the application by holding that interest portion has to be recovered from self assessment tax and thereafter remaining amount has to be adjusted against principal demand. The assessee raised following contentions before ld. CIT(A):- (1) The AO accepted the claim of assessee of granting credit of Rs.2,56,676/- (2) The AO rejected the contention that tax paid under section 140A before the due date of filing of return i.e. 31.10.1994 be reduced as this amount is not advance tax. He was referring to sum of Rs.25 lacs paid by the assessee on 26.10.1994. 5. The ld. CIT(A) rejected the contention of the assessee also by holding that taxes paid after FY cannot be treated as advance tax and, therefore, they cannot be reduced from assessed tax for the purpose of calculating chargeable interest. 6. Before us the ld. AR submitted that any tax paid before the due date of filing of return should be reduced from the assessed tax for the purposes of calculating interest under sections 234A, 234B, 1234C. He referred to the decision of Hon ble Supreme Court in CIT Anr. v. Prannoy Roy Anr. (2009) 309 ITR 231 (SC) wherein al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on (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 (1) of section 143 or on regular assessment as reduced by the advance tax, if any, paid and any tax deducted or collected at source. Explanation I. In this section, due date means the date specified in sub-section (1) of section 139 as applicable in the case of the assessee. Explanation 2.- In this sub-section, tax on the total income as determined under subsection (1) of section 143 shall not include the additional income-tax, if any, payable under section 143. Explanation 3.- Where, in relation to an assessment yea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the end of the FY and not from the due date of filing of return as for section 234A. For the sake of convenience we reproduce the relevant portion of sections 234B 234C to highlight the point that interest under these sections has to be calculated from the end of FY. 234B. Interest for defaults in payment of advance tax. (1) Subject to the other provisions of this section, where, in any financial year, an assessee who is liable to pay advance tax under section 208 has failed to pay such tax or, where the advance tax paid by such assessee under the provisions of section 210 is less than ninety percent, of the assessed tax, 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 from the 1st day of April next following such financial year to the date of determination of total income under sub-section (1) of section 143 or regular assessment, on an amount equal to the assessed tax or, as the case may be, on the amount by which the advance tax paid as aforesaid falls short of the assessed tax. *Explanation 1. In this section, assessed tax means the tax on the total income determin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... FY cannot be exactly termed as advance tax within the meaning of sections 208 to 219. As per section 211 advance tax has to be paid on or before 15 th September, or on or before 15 December and on or before 15 March at the ratio of 30%, 60% and 100% respectively. The provisio to section 211(1) makes it clear that any amount by way of advance tax on or before 31st day of March shall also be treated as advance tax paid during the FY ending on that day for all purposes of this Act. Therefore, any tax paid after end of the FY cannot be termed as advance tax. However, interest under section 234A is not chargeable from the first day of next FY to the due date of filing of return on the taxes paid during this period because of interpretation of section 234A given by Hon ble Supreme Court. Hon ble Apex Court has nowhere held that any taxes paid after first day of next FY till due date of filing of return would also be called advance tax for the purposes of the Act. And, therefore, required to be excluded for computing interest under section 234B or section 234C. In this regard we may refer to a decision of Hon ble Gujarat High Court in the case of Rosanlal S. Jain Ors (AOP) v. DCI ..... X X X X Extracts X X X X X X X X Extracts X X X X
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