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The PRI. Commissioner of Income Tax-1 Versus Applitech Solution Ltd.

2015 (12) TMI 628 - GUJARAT HIGH COURT

Interest u/s 234B - upto which date interest under Section 234B can be admitted - ITAT directing the Assessing Officer to charge interest u/s 234B after giving effect to the order of the Tribunal till the date of order of original assessment - Held that:- Section 234B has two parameters. One is the principal on which such interest would be computed and the other is the period, during which, such interest liability would arise. Two terminal points of the liability are the 1st of April next follow .....

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only pertains to the adjustment of the principal on the basis of any change in the principal liability of the tax of the assessee and has no reference to the two terminal points of time for which the interest liability would arise under sub-section (1). Here, the liability would end on the date of determination of total income under Sub-section (1) of Section 143 of the Act or, in case of regular assessment, the date of such assessment. In view of such clear language of sub-section (1) of Secti .....

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gular assessment' would mean the original order of assessment and would not include any other debt of the consequential order which can be treated as the debt of the regular assessment - Decided against revenue - Tax Appeal No. 887 of 2015 - Dated:- 1-12-2015 - Akil Kureshi And Mohinder Pal, JJ. For the Appellant : Mrs Mauna M Bhatt, Adv ORDER ( Per : Honourable Mr. Justice Akil Kureshi ) 1. This appeal is filed by the Revenue challenging judgement of the Income Tax Appellate Tribunal dated 10.0 .....

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or default in payment of advance tax. Sub section (1) need to be noted, relevant portion of which 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 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 .....

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. [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 reduced by the amount of- (i) any tax deducted or collected at source in accordance with the provisions of Chapter XVII on any income which is subject to such deduction or collection and which is taken into account in computing such total incom .....

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so made shall be regarded as a regular assessment for the purposes of this section. Explanation 3.In Explanation 1 and in sub-section (3), "tax on the total income determined under sub-section (1) of section 143" shall not include the additional income-tax, if any, payable under section 143.]" 3. Under sub-section (1) of Section 234B of the Act whenever advance tax paid by the assessee is found to be less than 90 per cent of the assessed tax, the assessee is liable to pay interest .....

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y flowing from subsection (1) of Section 234B has two parameters. One is the principal on which such interest would be computed and the other is the period, during which, such interest liability would arise. Two terminal points of the liability are the 1st of April next following the financial year in question and the date of determination of total income under Section 143(1) assessment or the date of regular assessment as the case may be. Sub- section (4) of Section 234B, however, further provi .....

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ld arise under sub-section (1). Here, the liability would end on the date of determination of total income under Sub-section (1) of Section 143 of the Act or, in case of regular assessment, the date of such assessment. In view of such clear language of sub-section (1) of Section 234B of the Act, there is no scope for extending such liability to a later date and relate it to a revisional appellate or a rectification order as is desired by the revenue. 5. We notice that the Tribunal, in the presen .....

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ed the revenue's contention on this count making following observations: "14. From a plain reading of the relevant provisions of section 234B it is clear that if the advance tax paid by the assessee is less than 90 per cent of the assessed tax, the assessee is liable to pay interest under Section 234B of the Act at the prescribed rates on the assessed tax or as the case may be on the amount of which the advance tax paid falls short of assessed tax. In Explanation 1, it has also been def .....

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