“interest u/s 234B”
The decision most relied on for interest u/s 234B is DIT v. NGC Network Asia LLC (313 ITR 187), cited in 144 judgments on BharatTax.
Leading authorities on interest u/s 234B
Where a duty is cast on the payer to deduct and pay tax at source under Section 195, the payee-assessee cannot be levied interest under Section 234B for failure to pay advance tax if the payer defaults on its TDS obligation. This principle may also extend to interest under Section 234C.
Interest under sections 234A and 234B cannot be levied mechanically when there is a reasonable cause for delay in payment or response to notices.
Interest under section 234B is not leviable if the entire income of the assessee is liable to tax deduction at source, irrespective of whether tax was actually deducted.
An assessee is entitled to the adjustment of seized cash against their advance tax liability. Consequently, no interest under sections 234A or 234B can be charged if the department fails to respond to the assessee's request for such an adjustment.
Interest under section 234B needs to be recalculated, affording the assessee a reasonable opportunity of hearing and considering judicial decisions.
Interest under section 234 cannot be levied if the employer fails to deduct tax at source, as the employee should not be faulted for the employer's default.
An assessment made in the name of a company that has been amalgamated and dissolved is null and void.
The court does not interfere with impugned judgments previously passed by the High Court in cases dealing with various aspects of income tax law.
