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2016 (2) TMI 274 - KARNATAKA HIGH COURT

2016 (2) TMI 274 - KARNATAKA HIGH COURT - [2016] 383 ITR 44 - Interest under Section 234A determined before taking notice of self assessment payment under Section 140A - Held that:- In the absence of any statutory provision made for reducing such amount paid towards self assessment tax, the Authorities proceeded to levy interest on the entire amount de hors the payment of ₹ 40 lakhs made by the Assessee towards the self assessment tax before the due date of filing of return of income. .....

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hat the Tribunal had no occasion to examine the case of the Assessee in the light of the Circular No.2/2015 dated 10.2.2015 and its applicability thereof to the present case. Hence, it would be appropriate for us to remand the matter to the Tribunal to examine the issue of payment of interest under Section 234A of the Act on the amount of self assessment tax paid by the Assessee before the due date of filing of return of income in the light of the Judgment of the Apex Court in the case of Pranoy .....

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against the Judgment passed by the Income Tax Appellate Tribunal, Bangalore Bench A , Bangalore, bearing ITA No.297/Bang/2014 dated 23.1.2015 by the Assessee, under Section 260-A of the Income Tax Act, 1961, [hereinafter referred to as the Act , for short] raising the following substantial questions of law. "[a] Whether the Tribunal was justified in upholding the levy of interest under Section 234A of the Act determined before taking notice of self assessment payment under Section 140A of t .....

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riation of tax before levy of interest under Section 234A of the Act? [c] Whether the interpretation as made by the Tribunal was justified in light of the Supreme Court judgment which refers to the payment of tax till the due date of filing the return especially when interest levy under Section 234A of the Act was only compensatory and when the interpretation of the Appellant was also supported by the Board Circular No.2/2015 dated 10.02.2015?" 2. The facts in brief are: That the appellant/ .....

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0,000 29.09.2009 10,00,000 03.11.2009 10,00,000 50,00,000 Tax on Regular Assessment 9,60,000 The said return of income filed by the assessee came to be processed under Section 143[1] of the Act on 7.3.2011 and the case was selected for scrutiny after service of notice under Section 143[2] of the Act. The assessment was concluded by making several additions and also levying interest of ₹ 2,06,932/- under Section 234A of the Act, ₹ 5,51,822/- under Section 234B of the Act, ₹ 2,52 .....

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d the calculation of interest made by the Assessing Officer and dismissed the appeal. Aggrieved by the Order of the Appellate Commissioner, the appellant preferred an appeal before the Income Tax Appellate Tribunal, Bangalore. The Tribunal declined to accept the explanation made by the Assessee in computing interest under Section 234A of the Act and dismissed the appeal. Being aggrieved by the same, the appellant is before this court. 3. Heard Sri. S. Partharasarathi, learned Counsel appearing f .....

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or the relevant assessment year. The self assessment tax amounting to ₹ 10 lakhs was paid on 3.11.2009 i.e., after due date for filing the return and the balance outstanding demand was ₹ 9,60,000/-. According to the learned Counsel, interest has to be computed under Section 234A of the Act taking into consideration the self assessment tax paid prior to the due date of filing the return. If so, the liability to make payment of interest under Section 234A of the Act would arise only on .....

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the Delhi High Court in the case of Dr. Prannoy Roy & Another Vs. Commissioner of Income Tax and Another reported in [2002] 254 ITR 0755. He would also place reliance on the Circular Instructions issued by the Under Secretary to Government of India in Circular No.2/2015 dated 10.2.2015 whereby the Board has decided that no interest under Section 234A of the Act is chargeable on the amount of self assessment tax paid by the Assessee before the due date of filing of the return of income. 6. O .....

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t find a place. Strictly applying the provision as contemplated under Section 234A of the Act, the Tribunal and the Authorities have levied interest on the amount of self assessment tax though paid in part before the due date of filing of return of income. 7. Learned Counsel would also contend that in the Judgment of the Apex Court in the case of Pranoy Roy [supra], the facts reveal that the tax due had already been paid which was not less than the tax payable on the returned income thus, the sa .....

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r the relevant assessment year was 30.9.2009. The self assessment tax was paid on various dates amounting to ₹ 40 lakhs prior to the date of filing of return of income and an amount of ₹ 10 lakhs was paid on 3.11.2009 subsequent to the date of filing of the return and the balance outstanding demand was ₹ 9,60,000/-. The Assessing Officer has levied interest on the entire amount of tax under Section 234A of the Act as no discretionary power is vested with the Assessing Officer t .....

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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 one percent 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] xxxx xxxx xxxx on the amount of the tax on the total income as determined under sub-section [1] of Section 143, and .....

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income-tax payable, allowed under section 91, on account of tax paid in a country outside India; and [vi] any tax credit allowed to be set off in accordance with the provisions of section 115JAA or Section 115JD. 11. This provision does not provide for reduction of the amount of self assessment tax paid by the Assessee before the due date of filing return of income. We have also noticed that payment of interest is to compensate losses to the Revenue. In the absence of any statutory provision ma .....

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