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TMI Blog2016 (7) TMI 945X X X X Extracts X X X X X X X X Extracts X X X X ..... sulting into the excess charge of interest u/s 234B by Rs. 4,26,149/- (1441236-1015087)." ITA No. 606/JP/2015 " The ld. CIT (A) has erred on facts and in law in upholding the chargeability of interest u/s 234B under sub-section (1) and not under sub-section (3) resulting into the excess charge of interest u/s 234B by Rs. 2,93,574/- (685768 - 392194)." 2. The brief facts of the case are that the AO while giving effect to the order passed by the Settlement Commission under section 245D(4) of the IT Act charged interest under section 234B from 1st day of assessment year under section 234B(1) resulting in excess interest charged by the AO. Against this order charging interest under section 234B(1), the assessee has filed rectification appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this assessed income is increased by any appellate authority. Therefore, AO was justified in computing the interest u/s 234B of the IT Act. I do not find any infirmity in the order of the AO on this account." 4. Now the assessee is in appeal before us. 4.1. The ld. A/R submitted that the following dates are relevant for deciding the issue :- Particulars A.Y. 2003-04 A.Y. 2004-05 Date of filing of return u/s 139 27.11.2003 01.11.2004 Date of intimation u/s 143(1) 28.05.2004 31.05.2005 Date of Notice u/s 153A 7.9.2006 7.9.2006 Filing of return in response to notice u/s 153A 12.10.2006 12.10.2006 Date of filing of settlement petition 22.12.2006 22.12.2006 Date of deemed admission u/s 245D(1) 31.07.2007 31.07.2007 Date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore, interest is payable under sec. 234B(3) from the date of processing of return u/s 143(1) and not from first day of the relevant assessment year. He further stated that explanation 2 to section 234B(1) is not applicable as it is not a case of assessment made for the first time under sec. 147 or 153A for the reason that income of the assessee is already determined under sec. 143(1). It was further contended that ld. CIT (A) has wrongly interpreted that section 234B(3) would come into play only if the assessed income is subsequently increased by the order of any appellate authority by ignoring that there is no such provision under sec. 234B(3). The ld. A/R therefore argued that the direction be given to charge interest u/s 234B as per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essed 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 2. - Where, in relation to an assessment year, an assessment is made for the first time under section 147 or section 153A, the assessment so made shall be regarded as a regular assessment for the purposes of this section. (2) Where, as a result of an order of reassessment or recomputation under section 147 or section 153A, the amount on which interest was payable in respect of shortfall in payment of advance tax for any financial year under sub-section (1) is increased, the assessee shall be liable to pay simple interest at the the rate of one per cent, for every month or part of a month comprised in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n exceeds fifty lakh rupees, (ia) in a case where - (A) The applicant is related to the person referred to in clause (i) who has filed an application (hereafter in this sub-section referred to as "specified person"); and (B) The proceedings for assessment or re-assessment for any of the assessment years referred to in clause (b) of sub-section (1) of section 153A or clause (b ) of sub-section (1) of section 153B in case of the applicant, being a person referred to in section 153A or section 153C, have been initiated, the additional amount of income-tax payable on the income disclosed in the application exceeds ten lakh rupees, (ii) In any other case, the additional amount of income-tax payable on the income disclosed in the applicati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the analogy. As the tax is required to be paid in the form of advance tax etc. before 1st April of the next following financial year as tax became due and payable before the said date and if the tax was wrongly withheld by the assessee beyond 1st April, then the revenue would have been deprived from the use of the tax amount. Since the assessee has wrongly withheld the amount or has not deposited the tax amount before 1st April, therefore, the Assessee as is required to be deposit the tax payable upto 1st April, along with return of income along with interest. Similarly, if any amount is found to be due and payable in the proceedings initiated for assessment or reassessment or recomputation, then the interest is required to be paid from t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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