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2015 (8) TMI 621 - SUPREME COURT

2015 (8) TMI 621 - SUPREME COURT - [2016] 383 ITR 9 - Interest under Section 234B - no direction had actually been given in the assessment order for payment of interest - Held that:- It will be seen that under the provisions of Section 234B, the moment an assessee who is liable to pay advance tax has failed to pay such tax or where the advance tax paid by such an assessee is less than 90 per cent of the assessed tax, the assessee becomes liable to pay simple interest at the rate of one per cent .....

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ext of Section 143, which is referred to in Explanation 1 to Section 234B. - Decided in favour of revenue. - Civil Appeal No. 1169 of 2006, Civil Appeal No. 1198 of 2006 - Dated:- 6-8-2015 - A. K. Sikri And Rohinton Fali Nariman, JJ. For the Appellant : Mr. Guru Krishna Kumar, Adv. Mr. Rupesh Kumar, Adv. Mr. T. M. Singh, Adv. Mr. Jitin Singhal, Adv. Ms. Anil Katiyar, Adv. Mr. B. V. Balaram Das, Adv. Ms. Rashmi Malhotra, Adv. Mr. S. A. Haseeb, Adv. For the Respondent : Ms. Shipra Ghose, Adv. ORDE .....

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t'), without more. In the first round, before the Income Tax Appellate Tribunal (hereinafter referred to as 'ITAT'), the ITAT's attention was not drawn to the payment of interest at all. On an application made, the ITAT by its order dated 12.11.2002 specifically held that since no direction had actually been given in the assessment order for payment of interest, the present case would be covered by the decision of this Court reported in Commissioner of Income Tax & Ors. v. Ra .....

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, learned senior counsel appearing for the Revenue, presented three submissions before us and relied upon the decision contained in Kalyankumar Ray v. Commissioner of Income Tax, West Bengal-IV, Calcutta [1992 Supp (2) SCC 424] . According to him, the interest under Section 234B is, in any case, part of Form I.T.N.S. 150 which is not only signed by the assessing officer but it is really part of the assessment order itself. His other submissions are that the judgment in Ranchi Club Ltd.'s cas .....

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hat it is compensatory in nature. Countering this submission, Ms. Shipra Ghosh, learned counsel appearing for the respondent, supported the judgment of the ITAT and the High Court by stating that the judgment in Ranchi Club Ltd.'s case squarely covers the facts of this case. We have heard learned counsel for the parties. We do not feel the need to go into the various submissions made by Mr. Guru Krishna Kumar as this appeal can be disposed of on a short ground. In a three-Judges Bench decisi .....

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ereafter, the matter has been governed by departmental instructions. Under these, two forms are in vogue. One is the form of, what is described as, the "assessment order", (I.T. 30 or I.T. N.S.65). The other is what is described the "Income Tax Computation Form" or "Form for Assessment of Tax/Refund" (I.T.N.S.150). The practice is that after the "assessment order" is made by the ITO, the tax is calculated and the necessary columns of I.T.N.S. 150 are fille .....

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ed on file and a copy occasionally sent to the assessee. I.T.N.S. 150 is also a form for determination of tax payable and when it is signed or initialed by the ITO it is certainly an order in writing by the ITO determining the tax payable within the meaning of Section 143(3). It may be, as stated in CIT v. Himalaya Drug Co. only a tax calculation form for departmental purposes as it also contains columns and code numbers to facilitate computerisation of the particulars contained therein for stat .....

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re, think that the statutory provision has been duly complied with and that the assessment order was not in any manner vitiated." The Supreme Court judgment in the Ranchi Club Ltd.'s case, is a one line order which merely states: - "We have heard learned counsel for the appellant. We find no merit in the appeals. The civil appeals are dismissed. No order as to costs." The High Court judgment which was affirmed by this Court as aforesaid arose in the context of a challenge to t .....

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144 as he is not supposed to know or anticipate that his return of income would not be accepted. The High Court further held that interest is payable in future only after the dues are finally determined. Given the above controversy, it is necessary to set out the provisions contained in Section 234B. The relevant portion of Section 234B reads as under: - "234B. Interest for defaults in payment of advance tax. - (1) Subject to the other provisions of this section, where, in any financial yea .....

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tion 143 and where a regular assessment is made, to the date of such 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 determined under sub-section (1) of section 143 and where a regular assessment is made, the tax on the total income determined under such regular assessment as reduce .....

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