Interest calculation u/s 234

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

04 July 2013 A files his ITR 4 on 27/7/2012 for assessment year 2012-13 u/s 139(1). Self assessment tax is paid on 27/7/2012. Due date of filing was 31/7/2012
He files a revised return on 30/10/2012 u/s 139(5), claiming refund of part of tax, as LTCG was reduced in revised return (Benefit of sec 54 was omitted in original return)
The Return was declared defective by CPC in June 2013, and after due corrections ITR 4 was filed on 11/6/2013.
Query is whether interest u/s 234 a, b and c will be calculated as per date of filing of Original return, or of revised return or of defective return. Which is the relevant date? Should the interest amount not reduce in revised return (as tax payable is reduced), and remain constant in revised and defective return?

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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04 July 2013 SA Tax paid on 27.07.2012.
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139(5) return was filed & it resulted into refund on 30-10-2012.
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I think question of 234A, 234B, 234C interest does not arise here as the revised return has resulted into a refund.
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How the demand has arisen is important to know here. Which you have not explained.

As once tax payment has been duly/excess made in the original return filed U/s 139(1), question of interest does not arise in a later course.

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Querist : Anonymous

Querist : Anonymous (Querist)

05 July 2013 I agree with you ,Sir.
So far, demand is not made, as assessment is not completed.
However, excel utility for e-filing is calculating interest u/s 234 a, b and c which is more than interest calculated while filing original return.
So I wanted to know what should be real interest. I feel that interest for late filing (234a) should be nil as original return was filed in time, interest for non payment of advance tax (234c) will be there and interest for delayed payment (April - July) for 4 months also is payable (234b)
Kindly tell me if I am right.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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05 July 2013 Yes, I agree with your views.
.
As far as defective return is concerned-
generally change in income hardly takes place. Only removal of defect is required and that is a tax neutral incidence.
.

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