SHRI BALKRISHNA P. TRIVEDI, HUF BY KARTA RIDDHISH B TRIVEDI,AHMEDABAD vs. THE ACIT, CIRCLE-5(2),, AHMEDABAD

O R D E R

PER P.M. JAGTAP, VICE-PRESIDENT :

Shri Balkrishna P Trivedi HuF by Karta Riddhish B Trivedi Vs. ACIT AY : 2008-09 2

“9. After hearing both the parties and perusing the record, we find that the section 234B reads as under :-

"234B(1) -Subject to the other provisions of this section, where, in any financial year, an assessee who is liable to pay advance tax under section 208 has failed to pay such tax or, where the advance tax paid by such assessee under the provisions of section 210 is less than ninety per cent of the assessed tax, the assessee shall be liable to pay simple interest at the rate of 2 per cent for every month or part of a month comprised in the period from the 1st day of April next following such financial year to the date of determination of total income under sub-section (1) of section 143 and where a regular assessment is made to the date of such regular assessment on an amount equal to the assessed tax or as the case may be, on the amount by which the advance tax paid as aforesaid falls short of the assessed tax."

It is clear from the above that interest u/s. 234B is leviable for the period from the 1st day of April next following such financial year to the date of determination of income u/s. 143(1) and where a regular assessment is made u/s. 143(3) till the date of such regular assessment order.

Shri Balkrishna P Trivedi HuF by Karta Riddhish B Trivedi Vs. ACIT AY : 2008-09 3 section (1) or sub-section (3) has been increased or reduced, as the case may be, the interest shall be increased or reduced accordingly, and — (i) in a case where the interest is increased, the AO shall serve on the assessee a notice of demand in the prescribed form specifying the sum payable and such notice of demand shall be deemed to be a notice under section 156 and the provisions of this Act shall apply accordingly; (ii) in a case where the interest is reduced, the excess interest paid, if any, shall be refunded." It is clear from the above that sub-section (4) of section 234B only says that interest payable u/s. 234B(1) shall be increased or reduced but it has not specified the period for which it will be levied, since the period already stands specified in section 234B (1) reproduced earlier. It is further noted that assessee's case falls u/s. 234B(1) and not u/s. 234(B)(3) as there is regular assessment u/s. 143(3) and no re-assessment and re-computation u/s. 147 or 153(A) or the Act. Hence the period of charging interest u/s. 234B would be as specified under section 234B(1) i.e. 1st day of April next following financial year to the date of the regular assessment order passed u/s. 143(3). On the identical facts there is a direct decision of the Tribunal, Delhi Bench in the case of Freightship Consultants (P.) Ltd. (supra) wherein relying on the case laws in the case of Modi Industries Ltd. v. CIT [1995] 216 ITR 759/82 Taxman 377 (SC) and CIT v. Anjum M.H. Ghaswala [2001] 252 ITR 1/119 Taxman 352 (SC) following was held :— "It is mandatory for the AO to charge interest under s.234B of the Act and after the decision of ITAT, he is duty bound to increase or reduce the same as per the order of the Tribunal which he has charged while passing the assessment order and upto the date of the assessment order and not up to the date of the order passed by him in consequence of the order passed by the Tribunal." The case laws relied on by the ld. DR are distinguishable on facts. In the case of- Akbar Travels of India (P.) Ltd. (supra) (ii) Sahitya Mudranalaya (supra) and (iii) Hindustan Bulk Carriers (supra) relied on by him the issue before the courts was chargeability and computation of interest u/s. 234 consequent upon settlement of case by the Settlement Commission. In the case -the South Indian Bank Ltd. (supra), the issue before the court was charging of interest u/s. 234B(3) of the Act. In view of the above, the ld. CIT (A) was quite justified in holding that in this case interest u/s. 234B should be charged for the periods 1.4.1997 to 31.3.2000 i.e the date of the regular assessment u/s. 143(3) and therefore the order passed by him is hereby upheld.”

Shri Balkrishna P Trivedi HuF by Karta Riddhish B Trivedi Vs. ACIT AY : 2008-09 4

Order pronounced in the open Court on 13th July, 2022 at Ahmedabad.