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2016 (7) TMI 945 - ITAT JAIPUR

2016 (7) TMI 945 - ITAT JAIPUR - TMI - Chargeability of interest u/s 234B - whether the assessee is liable to pay the interest from 01.04.2003 (i.e. from the 1st day of April next following such financial year) or from the date of processing i.e. 28.05.2004 (date of intimation under section 143(1) in terms of section 243B(3) of the IT Act - Held that:- In the present case, settlement petition was filed and thereafter the petition was deemed to have been admitted on 31.07.2007 and thereafter the .....

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nder section 243B(3), in our view is not applicable. In fact, the provisions of section 245C makes it abundantly clear that such tax and interest thereon have to be paid under the provisions of this Act had the income been disclosed in the application but was declared in the return of income before the AO on the date of application. The words referred in 245C clearly shows that the date of application for settlement will relate back to the filing of the return before the AO and, therefore, the t .....

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ER SHRI LALIET KUMAR, J.M. These are two appeals filed by the assessee against the order of ld. CIT (Appeals), Alwar dated 29.04.2015 for the A.Y. 2003-04 & 04-05. The ground raised by the assessee is as under :- ITA No. 605/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 ₹ 4,26,149/- (1441236-1015087). ITA No. 606/JP/201 .....

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n excess interest charged by the AO. Against this order charging interest under section 234B(1), the assessee has filed rectification application under section 154 praying rectification of the AO s order on the ground that the AO has wrongly charged the interest under section 234B(1) of the IT Act instead of charging the interest under section 234B(3). The assessee s contention was that interest should be charged from the date of determination of total income u/s 143(1) as provided in section 23 .....

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under section 234B(3). He, therefore, rejected the application of the assessee filed under section 154 of the Act. 3. Aggrieved by the order of AO, assessee filed appeal before ld. CIT (A), who confirmed the order of the AO by observing as under :- 4.5. Having considered the material available on record, I do not find any force in the contentions of the appellant as the provisions of section 234B(1) of the IT Act are very clear and the present situation is well covered within the meaning of Expl .....

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-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 of order passed u/s 245D(4) 7.2.2013 7.2.2013 He submitted that in the case of the assessee total income is determined under section 143(1) .....

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der section 143(1)/147 or under section 143(3)/263 or u/s 143(1)/153A. Therefore, the order passed by the AO giving effect to the order of Settlement Commission is an order passed under section 153A/245D(4). The ld. A/R further argued that as per section 234B(3) whereas result of an order of reassessment or recomputation under section 147 or u/s 153A, the amount on which interest was payable under section 234B(1) is increased, assessee is liable to pay simple interest @ 1% per month following th .....

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r. 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. 2 .....

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interest from 01.04.2003 (i.e. from the 1st day of April next following such financial year) or from the date of processing i.e. 28.05.2004 (date of intimation under section 143(1) in terms of section 243B(3) of the IT Act in respect of ITA No. 605/2015. Before we decide the issue, we reproduce the relevant provisions hereunder : Section 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 lia .....

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lar 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 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 reassessmen .....

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ection 153A, on the amount by which the tax on the total income determined on the basis of the reassessment or recomputation exceeds the tax on the total income determined under sub-section (1) of section 143 or on the basis of the regular assessment as referred to in sub-section (1), as the case may be. Application for settlement of cases. Section 245C. (1) An assessee may, at any stage of a case relating to him, make an application in such form and in such manner as may be prescribed, and cont .....

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ssment or reassessment 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 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 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 .....

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ditional amount of income-tax payable on the income disclosed in the application exceeds ten lakh rupees, and such tax and the interest thereon, which would have been paid under the provisions of this Act had the income disclosed in the application been declared in the return of income before the Assessing Officer on the date of application, has been paid on or before the date of making the application and the proof of such payment is attached with the application. As per section 245C, the asses .....

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d in the return of income. If the assessee discloses excess income in the return of income or has disclosed income in the settlement proceedings but has not paid payable tax or advance tax on such amount than the assessee is liable to pay interest on the unpaid tax along with the unpaid tax at the time of filing of the return or filing of the settlement application. In our view, the assessee is liable to pay the interest in accordance with section 234B from the 1st day of April of next following .....

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re 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 the date of 1st April next following such financial year, as the income assessed, reassessed or recomputed shall relate back or deemed to have been filled in the return of .....

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