TMI Blog2010 (7) TMI 610X X X X Extracts X X X X X X X X Extracts X X X X ..... fter the closing of the financial year, interest u/s 234B and 234C was levied - Hence, the assessee is liable to pay interest u/s 234C of the Act in terms thereof and shall be entitled to benefit of payment out of the seized cash from the date of making application for adjustment of the seized cash towards tax liability - Thus, the substantial question of law is answered in favour of the Revenue. - 149 and 150 of 2003 - - - Dated:- 22-7-2010 - ADARSH KUMAR GOEL, AJAY KUMAR MITTAL, JJ. JUDGMENT Adarsh Kumar Goel J.- This order shall dispose of I. T. A. Nos. 149 and 150 of 2003. The facts are said to be identical in both the appeals. Reference is made to the facts of I. T. A. No. 149 of 2003. The Revenue has preferred this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing of the financial year, interest under sections 234B and 234C was levied. In September, 1994 part of the seized cash was adjusted towards tax due in different cases for the assessment year 1994-95. As per section 211 of the Act, the assessee was required to pay advance tax in three instalments for the financial year ending on March 31, 1994. The due dates for paying advance tax were September 15, 1993, December 15, 1993 and March 15, 1994. The Assessing Officer held that the assessee was liable to pay tax instalment on the surrendered income from the date advance tax was due, i.e., September 15, 1993, December 15, 1993 and March 15, 1994 and charged interest under sections 234B and 234C of the Act accordingly. On appeal, the Commissione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unal in deleting the interest cannot be sustained as payment of interest was mandatory. The mere fact that the assessee could not foresee the interest liability was no ground not to demand interest. The interest was payable on the amount of assessed tax which may be held to be due. Reliance has been placed on Explanation 1 to section 234B(1) of the Act added in the year 2001, with effect from April 1, 1989, vide the Finance Act, 2001. The chargeability of interest under section 234B of the Act came up for consideration in a recent judgment dated July 20, 2010 passed in I. T. A. No. 851 of 2008 (Jacob Export House v. CIT [2011] 330 ITR 53 (P H)) wherein it was held as under (page 56) : "7. The matter is no longer res integra. This co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... challenge before this court in Raj Kumar Singal's case [2002] 255 ITR 561 (P H) where the Division Bench while upholding the validity of the said provision, interpreted it as under (page 562) : ". . . A comparison of the two provisions shows that under the original provision interest was leviable on the income as declared in the return filed by the assessee. By the amended provision, the interest is leviable on the income as determined by the assessing authority minus the income on which the tax has been paid or deducted. The amendment is only calculated to clarify the ambiguity that was felt in the original provision. It is not arbitrary or unreasonable." Section 234C of the Act provides for interest for deferment of advance tax. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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