Facts
The assessee preferred an appeal against the order of the CIT(A) pertaining to AY 2022-23. The assessee's grievance related to the incorrect determination of interest under Section 234B and additional income-tax liability by the Assessing Officer.
Held
The Tribunal held that Section 234B(2) of the Act was not applied properly and directed the AO to levy interest up to the date of tax payment. The Tribunal also directed the AO to levy additional tax as per Explanation (iii) to Section 234B.
Key Issues
Whether the interest under Section 234B and additional income-tax liability were correctly determined by the AO based on the provisions of Section 234B and its explanations.
Sections Cited
234B, 143(1), 140A, 143, 140B
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “F” BENCH, MUMBAI
Before: SHRI SAKTIJIT DEY, HON’BLE & SHRI NARENDRA KUMAR BILLAIYA, HON’BLE
Assessee by : None Revenue by : Ms. Kavita P. Kaushik, Sr. D/R सुनवाई की तारीख/Date of Hearing : 28/07/2025 घोषणा की तारीख /Date of Pronouncement: 30/07/2025 आदेश/O R D E R
PER NARENDRA KUMAR BILLAIYA, AM:
This appeal by the assessee is preferred against the order of the ld. CIT(A)/ Addl./JCIT(A)-3, Delhi [hereinafter the ‘ld. CIT(A)’] dated 28/01/2025 pertaining to AY 2022-23.
The grievance of the assessee reads as under:- “1) In the facts and circumstances of the case and in law, the learned A.O. erred in incorrectly determining interest under section 234B to be Rs. 8,27,421/- instead of Rs. 2,40,219/- determined by the assessee while filing updated return for A.Y. 2022- 23. 2) In the facts and in the circumstances of the case and in law, the Learned A.O. erred in incorrectly determining the additional income-tax liability at Rs.9,46,215/- instead of Rs.8,33,038/-.”
None appeared on behalf of the assessee in spite of notice. We decided to proceed ex-parte.
The ld. D/R was heard at length. Case records carefully perused. 5. Briefly stated the facts of the case are that while processing the return of income u/s 143(1) of the Act interest u/s 234B of the Act was levied at Rs. 8,27,421/- whereas the claim of the assessee is that the interest should have been levied at Rs. 2,40,219/- as he has paid the self- assessment tax and the interest should have been charged up to the date of payment of tax u/s 140B of the Act. 6. We have carefully perused the impugned order of processing u/s 143(1) of the Act. In our considered opinion, the provisions of Section 234B(2) of the Act, have not been applied properly. The relevant provisions read as under:- “Interest for defaults in payment of advance tax. 234B. (1) …………………………….
(2) Where, before the date of [determination of total income under sub-section (1) of section 143 or] completion of a regular assessment, tax is paid by the assessee under section 140A or otherwise,-
(i) interest shall be calculated in accordance with the foregoing provisions of this section up to the date on which the tax is so paid, and reduced by the interest, if any, paid under section 140A towards the interest chargeable under this section;
(ii) thereafter, interest shall be calculated at the rate aforesaid on the amount by which the tax so paid together with the advance tax paid falls short of the assessed tax.”