TMI Blog2024 (1) TMI 24X X X X Extracts X X X X X X X X Extracts X X X X ..... f filing of the income tax return. We are in agreement with the submission of the learned AR. The clarification No. 1 of the circular is not clear as to the date on which the quantification of interest liability under section 234A of the Act has to be taken. But, when we read the circular as a whole in the light of the decision of the Hon ble Apex Court in the case of Prannoy Roy (supra), the reasonable inference is that if the assessee deposits the taxes at a date at which the interest liability under section 234A of the Act, does not exceed Rs. 1 lakh, such an assessee is entitled to the extended period of due date and, therefore, any return of income filed thereafter will not fasten any additional interest liability. We direct the AO to verify whether the taxes paid by the assessee as on 27/09/2021 took care of the interest liability till such date, and if it is so, to delete the addition made. Grounds of appeal are allowed accordingly. - Shri Rama Kanta Panda, Vice President And Shri K.Narasimha Chary, Judicial Member For the Assessee : Shri K.C. Devdas And Shri M. Poorna Chander Rao, ARs For the Revenue : Shri Shakeer Ahamed, DR ORDER PER K. NARA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee on 27/09/2021 itself though the return was filed a bit late, but that too within the time allowed by the CBDT for filing of the returns. 4. Learned CIT(A) did not agree with this contention of the assessee and held that in order to have the benefit of the decision of the Hon ble Supreme Court in the case of CIT vs. Prannoy Roy 309 ITR 231 (2009), though the assessee filed the return of income after the due date, he must have paid the taxes before the due date. Learned CIT(A) examined whether the payment of taxes by the assessee on 27/09/2021 was before the due date of filing of return of income in the light of the claim of the assessee under CBDT Circular No. 17/2021 [FNo. 225/49/2021/ITA-II], dated 09/09/2021, extending the due date for filing of the return of income to 31/12/2021 from 31/07/2021. Since the applicability of this circular extending the due date is restricted to the cases where the amount of tax on the total income as reduced by the amount as specified in clauses (i) to (vi) of that section not exceeding Rs. 1 lakh, and the interest computed in this case is about Rs. 1,27,350/-, assessee s case is not covered by the circular. On this premise, the lea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h extension is restricted to the cases where the amount of tax on the total income as reduced by the amount as specified in clauses (i) to (vi) of that section not exceeding Rs. 1 lakh. Application of this clarification No.1 is the bone of contention between the parties. 9. Extension of due date under the circular is dependent upon the quantification of interest under section 234A of the Act which in turn is dependent upon the period commencing from the date next to the due date till the date of filing of return. The quantity of interest under section 234A of the Act is, therefore, variable depending upon the period for which it is computed. It, therefore, qualifies the extension of due date not only for various categories of assessees, but also to the same assessee at different dates. For the same assessee at a particular date such interest liability could be less than Rs. 1 lakh and at a later point of time, it could grow to exceed Rs. 1 lakh. Pertinent to note that quantification of interest liability under section 234A of the Act is not with reference to any particular date and, therefore, it goes on varying on different dates even before the stated due date of 31/12/2021. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dency to create various dates of due dates for various assessees and render the date given in the circular, namely, 31/12/2021 otiose. Such a result has no nexus either with the class of assessees because for the same class of assessees it is applicable at some time and it is not applicable at some time, or to the purposes for which the due date was extended. In such situation, going by the very purpose of extension of due date in consideration of the difficulties reported by the taxpayers and other stakeholder in electronic filing of income tax returns as a whole, in the absence of any indication as to its nexus with any consideration of a class of assessees, we resolve the conflict by reading down the condition in clarification 1 and hold that the extension of due date will prevail generally. 13. According to the assessee, as on the date of paying the taxes on 27/09/2021, the interest liability under section 234A of the Act was less than Rs. 1 lakh and, therefore, such payment of taxes shall be construed to be before the due date. At this stage, assessee placing reliance on the decision of Hon ble Apex Court in the case of Prannoy Roy (supra), argues that the interest under se ..... X X X X Extracts X X X X X X X X Extracts X X X X
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