Section 234A read with sections 211 and 234B of the Income-tax Act, 1961

Court :
IN THE ITAT MUMBAI BENCH ‘J’

Brief :
Section 234A read with sections 211 and 234B of the Income-tax Act, 1961 – Return of income – Interest for default in furnishing – Assessment year 1996-97 – Whether term advance tax used in section 234A would cover all taxes paid in advance of tax liability anticipated by assessee for concerned assessment year – Held, yes – For relevant assessment year, assessee filed return of income belatedly on 31-3-1998 declaring positive income – Assessee had paid taxes in advance on 21-9-1995, 13-12-1995 and 25-4-1996 – Assessing Officer passed assessment order under section 143(3) and charged interest under sections 234A and 234B without giving credit for amount of Rs. 2,44,704 paid by assessee on 25-4-1996 - Commissioner(Appeals) confirmed impugned order holding that aforesaid payment was not ‘advance tax’ for purpose of sections 234A and 234B and, hence, it was not liable to be considered for calculation of interest – Whether since aforesaid payment of Rs. 2,44,704 was in nature of advance tax paid by assessee, Assessing Officer was to be directed to give credit for said amount while working out interest payable under sections 234A and 234B – Held, yes FACTS For the relevant assessment year 1996-97, the assessee filed the return of income belatedly on 31-3-1998 declaring positive income. The assessee had paid taxes in advance on 21-9-1995, 13-12-1995 and 25-12-1996. The Assessing Officer accepted the returned income and passed the assessment order under section 143(3). The Assessing Officer while passing the assessment order had charged interest under sections 234A and 234B without giving credit for the amount of Rs. 2,44,704 paid by the assessee on 25-4-1996. On appeal, the assessee contended that the tax paid on 25-4-1996 was in the nature of payment of advance tax for the purpose of sections 234A and 234B and, hence, the Assessing Officer ought to have given the credit for the same while calculating the interest. The Commissioner (Appeals) rejected the assessee’s contention and held that the aforesaid payment of Rs. 2,44,704 made on 25-4-1996 was not ‘advance tax’ for the purpose of sections 234A and 234B and, hence, it was not liable to be considered for calculation of interest. On second appeal:

Citation :
Mrs. Sheela Jaisingh v Assistant Commissioner of Income-tax, Circle 18(3), Mumbai R. K. Gupta, Judicial Member And D. K. Srivastava, Accountant Member IT Appeal No. 2414 (Mum.) of 2003 [Assessment year 1996-97]