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2015 (6) TMI 569 - ITAT PUNE

2015 (6) TMI 569 - ITAT PUNE - [2015] 41 ITR (Trib) 293 (ITAT [Pune]) - Non-granting of interest under section 244A of the I.T. Act on self assessment tax paid - Held that:- Hon’ble Bombay High Court in the case of Stockholding Corporation of India Vs. CIT & Ors. [ 2014 (11) TMI 899 - BOMBAY HIGH COURT] following the decision of Hon’ble Karnataka High Court in the case of CIT Vs. Vijaya Bank reported in (2011 (7) TMI 582 - KARNATAKA HIGH COURT ) and CIT Vs. Sutlaj Industries (2010 (3) TMI 449 - .....

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terest under section 234C - Advance Tax - re-calculate the interest under section 234C - Held that:- The law is not at all clear regarding the chargeability of interest under section 234C of the I.T. Act in a case where the assessment is completed at a figure below the returned income. In our opinion, merely because the assessee has declared higher income due to some error or mistake, the assessee shall not be liable to pay interest under section 234C of the I.T. Act on the returned income when .....

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- Dated:- 12-6-2015 - Shri R. K. Panda And Shri Vikas Awasthy,JJ. For the Appellant : None For the Respondent : Shri B. C. Malakar ORDER Per R. K. Panda, A. M: This appeal filed by the assessee is directed against the order dated 22.11.2013 of the CIT(A), Kolhapur relating to A.Y. 2006-07. 2. Despite service of notice, none appeared on behalf of the assessee. Therefore, this matter is being decided on the basis of material available on record and after hearing the Ld. DR. 3. The assessee in the .....

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which was reduced to ₹ 11,32,07,271/- after giving appeal effect. Accordingly, the tax liability was reduced from ₹ 5,05,93,420/- to ₹ 3,81,05,556/-. The assessee moved an application under section 154 of the I.T. Act before the Assessing Officer to re-compute the interest under section 234C of the I.T. Act and allow interest under section 244A of the Act on the self assessment tax paid. 5. So far as the interest under section 234C of the I.T. Act is concerned, the Assessing O .....

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claim to reduce the interest under section 234C of the I.T. Act. 6. So far as the claim of interest under section 244A of the I.T. Act is concerned, the Assessing Officer held that the refund has arisen on account of payment of self assessment tax of ₹ 5,56,08,917/-. Therefore, the assessee is not entitled to interest under section 244A of the I.T. Act on self assessment tax. 7. In appeal, the Ld. CIT(A) upheld the action of Assessing Officer. According to him, as per provisions of section .....

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,39,86,400/-. According to him, the assessee is not entitled to interest under section 244A of the I.T. Act if the refund has arisen out of payment made on account of self assessment tax. The assessee is entitled to interest under section 244A of the I.T. Act only if the refund has arisen out of payment made under sections 115WJ, 199, 206C or advance tax. Distinguishing the decisions cited before him, the CIT(A) rejected the claim of assessee for reduction of interest under section 234C of the I .....

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No.823 of 2000, order dated 17.11.2014 following the decision of Hon ble Karnataka High Court in the case of CIT Vs. Vijaya Bank reported in 338 ITR 489 (Kar) and the decision of Hon ble Delhi High Court in the case of CIT Vs. Sutlaj Industries reported in 325 ITR 331 (Del) has held that the assessee is entitled to interest under section 244A of the I.T. Act from the date of payment of tax on self assessment to the date of refund of the amount. Respectfully following the decision of the jurisdi .....

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fect. Although the assessee has computed the interest under section 234C of the I.T. Act at ₹ 23,80,997/- on the basis of the returned income, however, the assessed income has been determined at a figure which is below the returned income. Had the assessed income been more than the returned income, there would have been no issue since interest under section 234C of the I.T. Act is to be computed on the basis of returned income. However, the question that arises is as to what will happen if .....

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paid on or before the 15th day of September is less than forty-five per cent of the tax due on the returned income or the amount of such advance tax paid on or before the 15th day of December is less than seventy-five per cent of the tax due on the returned income, then, the company shall97 be liable to pay simple interest at the rate of [one] per cent per month for a period of three months on the amount of the shortfall from fifteen per cent or forty-five per cent or seventy-five per cent, as t .....

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is not less than twelve per cent or, as the case may be, thirty-six per cent of the tax due on the returned income, then, it shall not be liable to pay any interest on the amount of the shortfall on those dates; (b) the assessee, other than a company, who is liable to pay advance tax under section 208 has failed to pay such tax or,- (i) the advance tax paid by the assessee on his current income on or before the 15th day of September is less than thirty per cent of the tax due on the returned inc .....

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rch is less than the tax due on the returned income, then, the assessee shall be liable to pay simple interest at the rate of [one] per cent on the amount of the shortfall from the tax due on the returned income:] [Provided that nothing contained in this sub-section shall apply to any shortfall in the payment of the tax due on the returned income where such shortfall is on account of under-estimate or failure to estimate- (a) the amount of capital gains; or (b) income of the nature referred to i .....

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ent of the tax due on the returned income where such shortfall is on account of increase in the rate of surcharge under section 2 of the Finance Act, 2000 (10 of 2000), as amended by the Taxation Laws (Amendment) Act, 2000 (1 of 2001), and the assessee has paid the amount of shortfall, on or before the 15th day of March, 2001 in respect of the instalment of advance tax due on the 15th day of June, 2000, the 15th day of September, 2000 and the 15th day of December, 2000:] [Provided also that noth .....

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ber, 2000 and 15th day of December, 2000.] [Explanation.-In this section, "tax due on the returned income" means the tax chargeable on the total income declared in the return of income furnished by the assessee for the assessment year commencing on the 1st day of April immediately following the financial year in which the advance tax is paid or payable, as reduced by the amount of,- (i) any tax deductible or collectible at source in accordance with the provisions of Chapter XVII on any .....

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) any tax credit allowed to be set off in accordance with the provisions of section 115JAA [or section 115JD ].] (2) The provisions of this section shall apply in respect of assessments for the assessment year commencing on the 1st day of April, 1989 and subsequent assessment years.]] 12. From the above, it is clear that interest under section 234C of the I.T. Act has to be calculated on the returned income. As per Explanation to section 234C(1) of the I.T. Act, tax due on returned income means .....

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