Interest u/s 234b and 234c before relief u/s 89

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kalpesh (Querist)

23 May 2019 Kinldy Clarify My Doubt Regarding 234B and 234C. My Friend has received arrears of salary and I worked out Relief Under Section 89 and filed 10e along with return.When I consider Relief under section 89, My friend need not to pay any tax since total tax liabilty is offset by relief.But Last week my friend has intimationhttps://www.auditguru.im 143(1). In it, ITD has calculated 234B and 234C without considering relief and demanded that interest amount. my doubt is as follows. since no tax liability, why did they calculate 234B and 234C? They consider relief only after charging 234B and 234C and in net, ITD demanded that interest Kindly Clarify My Doubt. Thanks in Advance,

Manian

Manian (Expert)

24 May 2019 Interest is calculated by Department without considering the Relief. It is very much unjustified. The Relief is calculated only when we receive arrears of Salary. There is no fault on the part of the Employee of not declaring the Income in the previous years. It is only fault on the part of employer paying arrears related to previous years. How the department penalise the Employee for no fault on their part. It is really ridiculous and unethical and unjustified on the part of the Department to charge the Employee for the Interest u/s. 234(b) & (c)

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