Loading judgment…
Facts
The assessee filed an appeal challenging the levy of interest under Section 234B on a tax demand that had already been paid. The Assessing Officer (AO) recognized the payment but did not reduce the consequential interest liability. The Commissioner of Income Tax (Appeals) also denied relief.
Held
The Tribunal held that once the tax demand of Rs.1,92,190/- was paid in August 2016, the consequential interest liability under Section 234B would cease to be operative immediately after that month. Therefore, interest cannot be charged post-August 2016.
Key Issues
Whether interest under Section 234B can be charged on a tax demand that has already been paid?
Sections Cited
234B, 143(3), 143(1), 154
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘G’, NEW DELHI
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘G’, NEW DELHI BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER (Assessment Year : 2014-15) Sahil Gupta (L/H of Satinder Vs. DCIT Paul Gupta) Circle – 6(2) H. No. 11, Road No.63, West New Delhi Punjabi Bagh, New Delhi PAN No. AAPPG 2434 D (APPELLANT) (RESPONDENT) Assessee by Shri Parnav Yadav, Adv. Revenue by Shri Anuj Garg, Sr. D.R. Date of hearing: 15.01.2024 Date of Pronouncement: 15.01.2024 ORDER PER PRADIP KUMAR KEDIA, AM :
The captioned appeal has been filed by the assessee against the first appellate order of the Ld. Commissioner of Income Tax (Appeals) – National Faceless Appeal Centre (NFAC), Delhi dated 25.01.2023 arising from the assessment order dated 25.11.2016 passed by the Assessing Officer (AO) under Section 143(3) of the Income Tax Act, 1961 (the Act) concerning Assessment Year 2014-15.
As per the grounds of appeal, the assessee has challenged levy of interest under section 234B of the Act quantified at Rs.95,325/- on tax demand component of Rs.1,92,190/- already paid by the assessee.
Briefly stated, the assessee filed return of income which was assessed under section 143(3) of the Act at returned income of Rs.2,06,11,038/-. A demand of Rs.2,70,880/- was raised in pursuance of such assessment framed under section 143(3) of the Act. A demand of Rs.1,92,190/- was also earlier raised while drawing intimation under section 143(1) of the Act. The assessee paid aforesaid tax demand on 24.08.2016. In this backdrop, the assessee moved an application under section 154 of the Act before the AO seeking inclusion of the aforesaid amount of Rs.1,92,190/- for the purpose of determining the correct tax demand and consequential interest liability thereon. The Assessing Officer passed an order under section 154 of the Act wherein the payment of Rs.1,92,190/- in pursuance of intimation under section 143(1) of the Act was duly recognized for the purpose of determination of tax liability. However, consequential reduction in the interest liability under section 234B of the Act was not given effect to.
The CIT(A) also did not provide relief despite giving credit for tax component. The assessee is aggrieved and hence, this appeal.
The short point in issue hinges around determination of correct liability on account of interest liability under section 234B of the Act where tax demand of Rs.1,92,190/- has been undisputedly paid in August, 2016. Once, the tax payment has been made and credited the consequential interest liability under section 234B of the Act would cease to be operative immediately after the month in which the payment has been made. Consequently, the interest liability under section 234B of the Act on tax payment of Rs.1,92,190/- cannot be charged post August, 2016. The Assessing Officer is accordingly directed to reduce the interest chargeable under section 234B of the Act in respect of tax payment of Rs.1,92,190/- in accordance with law from September, 2016 onwards till the time such interest liability has been charged.
In the result, appeal of assessee is allowed.
Order was pronounced in the open court on 15.01.2024