Section 234A of the Income Tax Act

Income-tax Act, 2025: s.423

Section 234A of the Income-tax Act, 1961 corresponds to section 423 (Interest for defaults in furnishing return of income) of the Income-tax Act, 2025.

Read section 423 of the 2025 Act

Correspondence checked against the ICAI tabular mapping of the two Acts and the BharatTax.co section commentary.

The decision most relied on for Section 234A is Empire Jute Co. Ltd. v. CIT (124 ITR 1), cited in 622 of the 5,126 judgments on BharatTax that turn on this section.

Leading authorities on Section 234A

Empire Jute Co. Ltd. v. CIT
124 ITR 1 · 1980 · Supreme Court
622
citing judgments

Expenditure is classified as revenue or capital based on its practical business effect, necessity, or expediency, rather than solely on the juristic classification of rights; an enduring benefit does not automatically make an expenditure capital if it facilitates trading operations or business efficiency.

Olari Little Flower Kuries (P.) Ltd. v. UOI
440 ITR 26 · 2022 · High Court
614
citing judgments

The fee under Section 234E of the Income-tax Act cannot be levied for defaults in filing TDS statements committed prior to June 1, 2015, as the provision for its levy became effective only from that date.

CIT v. Anjum M.H. Ghaswala
252 ITR 1 · 2001 · Supreme Court
452
citing judgments

Levy of interest under sections 234A, 234B, and 234C of the Income Tax Act is mandatory. Tax statutes are to be interpreted strictly, allowing no room for purposive interpretation.

Ishikawajima Harima Heavy Industries Ltd. v. DIT
288 ITR 408 · 2007 · Supreme Court
394
citing judgments

Income from offshore supply of goods and services is not taxable in India if the entire transaction, including transfer of ownership and payments, occurs outside India.

DIT v. Morgan Stanley & Co.
292 ITR 416 · 2007 · Supreme Court
360
citing judgments

A Permanent Establishment (PE) signifies a foreign enterprise's virtual projection into another country, with a fixed place PE existing where an MNE's business is wholly or partly carried on. A dependent agent PE requires the agent to act as such and/or have the authority to conclude contracts for the foreign enterprise under DTAA provisions.

India Vs. Azadi Bachao Andolan 263 ITR 706 (SC); and Vodafone International Holdings B.V v. Union of India
341 ITR 1 · 2012 · Supreme Court
295
citing judgments

Legitimate tax planning is permissible, allowing taxpayers to arrange their affairs to minimize tax liabilities while respecting the "look at test" for transaction genuineness and the separate entity principle in corporate taxation. The source of funds for treaty-beneficial structures does not automatically invalidate the transaction.

DIT v. Ericsson A.B
343 ITR 470 · 2012 · High Court
256
citing judgments

Payments for the use of copyrighted software or reimbursement of data processing costs do not constitute 'royalty' under Section 9(1)(vi) of the Income-tax Act or Article 12(3) of a DTAA where there is no transfer of copyright or rendering of services that "make available" technical knowledge. This position was later upheld by the Supreme Court.

III v. HCL Technologies Ltd.
93 Taxmann.com 33 · 2018 · Supreme Court
245
citing judgments

When computing the deduction available under Section 10A of the Income-tax Act, communication expenses must be excluded from the total turnover for the purpose of calculating the eligible relief.

Mysore Minerals Ltd. v. CIT
239 ITR 775 · 1999 · Supreme Court
215
citing judgments

For income tax purposes, the 'owner' of a property is the person who is entitled to receive income in their own right, bears the risks incidental to ownership, and utilizes the asset, even if the sale deed is not formally registered. This beneficial ownership is sufficient for claiming depreciation or capital gains exemption under relevant sections.

(i) Formula One World Championship Ltd. v. CIT
394 ITR 80 · 2017 · Supreme Court
200
citing judgments

This case provides foundational principles that illuminate the contours of the concept of 'Permanent Establishment' (PE) under tax treaties, especially regarding a 'fixed place' PE.

Judgments on Section 234A

Mafaji Umedaji Jat, Deesa vs. The Income Tax Officer, Ward-1, Palanpur

In the result, the appeal of the Assessee is treated as allowed for statistical purposes

ITA 940/AHD/2023[2016-17]Status: DisposedITAT Ahmedabad15 Jul 2024AY 2016-17

Bench: Shri Siddhartha Nautiyal & Shri Makarand V. Mahadeokar, Accountnat Member आयकर अपील सं /Ita No.940/Ahd/2023 "नधा"रण वष" /Assessment Year : 2016-17 Mafaji Umedaji Jat The Income Tax Officer At Rampura बनाम/ Ward-1 Po Rampura, Tal.Deesa Palanpur 385 001 V/S. Banaskantha – 385 535 Dist. Banaskantha (Gujarat) "थायी लेखा सं./Pan: Akipj 4846 K (अपीलाथ"/ Appellant) ….. ("" यथ"/ Respondent) Assessee By : Shri S.N. Divatia & Shri Samir Vora, Ars Revenue By : Shri Ashok Kumar Suthar, Sr.Dr सुनवाई क" तार"ख/Date Of Hearing : 11/07/2024 घोषणा क" तार"ख /Date Of Pronouncement: 15/07/2024 आदेश/O R D E R Per Shri Makarand V. Mahadeokar, Am: This Appeal Is Filed By The Assessee As Against The Order Dated 29/09/2023 Passed By The Ld.Commissioner Of Income-Tax (Appeals)- National Faceless Appeal Centre (Nfac), Delhi [Hereinafter Referred To As “Cit(A)” In Short], Arising Out Of The Assessment Order Dated 24/03/2022 Passed By The Assessing Officer (Ao) Under Section 147 R.W.S.144 Read With Mafaji Umedaji Jat Vs. Ito Asst. Year : 2016-17

For Appellant: Shri S.N. Divatia &For Respondent: Shri Ashok Kumar Suthar, Sr.DR
Section 139(4)Section 142(1)Section 143(2)Section 144BSection 147Section 148Section 68

Bajrang Lal Muhal, Ghaziabad vs. ITO, Ward 2(1)(5), Ghaziabad

In the result, the appeal of the assessee is allowed for statistical purposes

ITA 2408/DEL/2023[2012-13]Status: DisposedITAT Delhi11 Jul 2024AY 2012-13

Bench: Shri Shamim Yahyabajrang Lal Muhal, Vs. Ito, Ward 2(1)(5), 973/B, Shalimar Garden Extn. 1, Ghaziabad. Sahibabad, Ghaziabad – 201 005 (Uttar Pradesh). (Pan : Aompm4148M) (Appellant) (Respondent) Assessee By : Shri Deepak Upadhyay, Ca Revenue By : Shri Om Prakash, Sr. Dr Date Of Hearing : 08.07.2024 Date Of Order : 11.07.2024 Order This Appeal By The Assessee Is Directed Against The Order Of The Ld. Cit (Appeals)/National Faceless Appeal Centre (Nfac) Dated 10.06.2023 For The Assessment Year 2012-13. 2. Grounds Of Appeal Taken By The Assessee Read As Under :- “1. The Assessment Order Passed By Ld. Assessing Officer Is Bad In Law. 2. The Assessing Officer (Ao) Has Erred In Making Addition Of Rs.10,19,548/- As Unexplained Investment Without Considering The Fact, Circumstances & Materials Available On Record. 3. Hon’Ble Cit (A) Has Erred In Confirming The Assessment Order Passed By Assessing Officer Without Considering The Fact, Circumstances & Material Available On Record.” 3. At The Outset, It Is Noted That There Is A Delay Of 15 Days In Filing The Appeal. The Delay Is Attributable Due To The Health Problem Of The Legal

For Appellant: Shri Deepak Upadhyay, CAFor Respondent: Shri Om Prakash, Sr. DR
Section 133(6)Section 142(1)Section 144Section 147Section 148Section 234ASection 271(1)(c)Section 69

Mahendrabhai Shantilal Patel, Ahmedabad vs. DCIT, Central Circle-1(3), Ahmedabad

In the result, the appeal of the assessee in ITA No

ITA 405/AHD/2019[2010-11]Status: DisposedITAT Ahmedabad10 Jul 2024AY 2010-11

Bench: Ms. Suchitra Kamble & Shri Makarand V. Mahadeokar, Accountnat Member आयकर अपील सं /Ita No.405/Ahd/2019 "नधा"रण वष" /Assessment Year : 2010-11 Mahendrabhai Shantilal Patel The Dy.Cit D-41, Sahjanand Apartment बनाम/ Central Circle-1(3) Nr. Sterling Hospital Ahmedabad V/S. Gurukul Road,Memnagar Ahmedabad – 380 052 "थायी लेखा सं./Pan: Ayvpp 7593 G अपीलाथ"/ (Appellant) "" यथ"/ (Respondent) Assessee By : Shri Vijay H. Patel, Ar (Written Submission) Revenue By : Shri Samir Tekriwal, Cit-Dr सुनवाई क" तार"ख/Date Of Hearing : 04/07/2024 घोषणा क" तार"ख /Date Of Pronouncement: 10/07/2024 आदेश/O R D E R Per Shri Makarand V. Mahadeokar, Am: This Appeal Is Filed By The Assessee As Against The Order Passed By The Ld.Commissioner Of Income-Tax(Appeals)-12, Ahmedabad [Hereinafter Referred To As “The Ld.Cit(A)”], Dated 20/12/2018, Arising Out Of The Assessment Order Passed By The Assessing Officer (Ao) Under Section 143(3) R.W.S.147 Of The Income Tax Act, 1961 (Hereinafter Referred To As "The Act") Dated 28/12/2017 Relevant To The Assessment Year (Ay) 2010-11. Mahendrabhai Shantilal Patel Vs. Dcit Asst. Year : 2010-11

For Appellant: Shri Vijay H. Patel, AR (Written submission)For Respondent: Shri Samir Tekriwal, CIT-DR
Section 132Section 132(4)Section 139Section 143(3)Section 148Section 234ASection 271(1)Section 68Section 69A