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

Ranbhumi Nirman Pvt. Ltd., Kolkata vs. I.T.O., NFAC, Delhi / I.T.O., Ward - 4(1), Kolkata

The appeals are treated as allowed for statistical purposes

ITA 728/KOL/2022[2014-2015]Status: DisposedITAT Kolkata29 Apr 2024AY 2014-2015

Bench: Shri Sanjay Garg & Shri Girish Agrawali.T.A. Nos.727&728/Kol/2022 Assessment Years: 2013-14 & 2014-15 Ranbhumi Nirman Pvt Ltd.………………............…...……………....Appellant Mercantile Building, 9/12, Lal Bazar Street, Block-B, 2Nd Floor, Room No.10, Kolkata-1. [Pan: Aafcr6772E] Vs. Ito, Nfac, Delhi…………...............................................…..…..... Respondent Appearances By: Shri Joydeep Chakrabotry, Advocate, Appeared On Behalf Of The Appellant. None Appeared On Behalf Of The Respondent. Date Of Concluding The Hearing : January 25, 2024 Date Of Pronouncing The Order : April 29, 2024 आदेश / Order संजय गग", "या"यक सद"य "वारा / Per Sanjay Garg: The Captioned Appeals Have Been Preferred By The Assessee Against The Separate Orders Dated 15.10.2022 Of The National Faceless Appeal Centre [Hereinafter Referred To As ‘Cit(A)’] U/S 250 Of The Income Tax Act (Hereinafter Referred To As The ‘Act’). Since Common Issues Are Involved In Both The Appeals, Hence These Have Been Heard Together & Are Being Disposed Of By This Common Order. The Assessee’S Appeal Ita No.727/Kol/2022 Is Taken As The Lead Case For The Purpose Of Narration Of Facts. 2. Ita No.727/Kol/2022 – The Assessee In This Appeal Has Taken The Following Grounds Of Appeal:

Section 148Section 234Section 250

Ranbhumi Nirman Pvt. Ltd., Kolkata vs. I.T.O., NFAC, Delhi / I.T.O., Ward - 4(1), Kolkata

The appeals are treated as allowed for statistical purposes

ITA 727/KOL/2022[2013-2014]Status: DisposedITAT Kolkata29 Apr 2024AY 2013-2014

Bench: Shri Sanjay Garg & Shri Girish Agrawali.T.A. Nos.727&728/Kol/2022 Assessment Years: 2013-14 & 2014-15 Ranbhumi Nirman Pvt Ltd.………………............…...……………....Appellant Mercantile Building, 9/12, Lal Bazar Street, Block-B, 2Nd Floor, Room No.10, Kolkata-1. [Pan: Aafcr6772E] Vs. Ito, Nfac, Delhi…………...............................................…..…..... Respondent Appearances By: Shri Joydeep Chakrabotry, Advocate, Appeared On Behalf Of The Appellant. None Appeared On Behalf Of The Respondent. Date Of Concluding The Hearing : January 25, 2024 Date Of Pronouncing The Order : April 29, 2024 आदेश / Order संजय गग", "या"यक सद"य "वारा / Per Sanjay Garg: The Captioned Appeals Have Been Preferred By The Assessee Against The Separate Orders Dated 15.10.2022 Of The National Faceless Appeal Centre [Hereinafter Referred To As ‘Cit(A)’] U/S 250 Of The Income Tax Act (Hereinafter Referred To As The ‘Act’). Since Common Issues Are Involved In Both The Appeals, Hence These Have Been Heard Together & Are Being Disposed Of By This Common Order. The Assessee’S Appeal Ita No.727/Kol/2022 Is Taken As The Lead Case For The Purpose Of Narration Of Facts. 2. Ita No.727/Kol/2022 – The Assessee In This Appeal Has Taken The Following Grounds Of Appeal:

Section 148Section 234Section 250

Shri Mahendrakumar H. Adhvaryu, Ahmedabad vs. The ITO, Ward-3(3)(3), Ahmedabad

The appeal of the assessee is allowed

ITA 1814/AHD/2019[2016-17]Status: DisposedITAT Ahmedabad26 Apr 2024AY 2016-17

Bench: Mrs. Annapurna Gupta & Shri T.R. Senthil Kumarिनधा"रण वष"/Assessment Year: 2016-17 Vs. Mahendrakumar H. Adhvaryu, Income Tax Officer, A-8, Classic Palace, Talav Gate, Ward-3(3)(3), Bodakdev, Ahmedabad-380054 Ahmedabad Pan : Aezpa 8877 Q अपीलाथ" अपीलाथ"/ (Appellant) अपीलाथ" अपीलाथ" "" "" यथ" "" "" यथ" यथ"/ (Respondent) यथ" Assessee By : Shri Tushar Hemani, Sr. Advocate & Shri Parimalsinh B. Parmar, Ar Revenue By : Shri Anurag Chandra, Sr Dr सुनवाई क" तारीख/Date Of Hearing : 01.02.2024 घोषणा क" तारीख /Date Of Pronouncement: 26.04.2024 आदेश/O R D E R आदेश आदेश आदेश Per Annapurna Gupta: Present Appeal Has Been Filed By The Assessee Against The Order Passed By The Ld. Commissioner Of Income Tax (Appeals)-3, Ahmedabad [Hereinafter Referred To As "Ld. Cit(A)” For Short] Dated 28.08.2019, Under Section 250(6) Of The Income Tax Act, 1961 [Hereinafter Referred To As “The Act”], Pertaining To The Assessment Year (Ay) 2016-17. 2. The Grounds Raised Are As Under:- “1. The Learned Cit(A) Has Erred In Law & On Facts In Not Giving A Reasonable Opportunity Of Hearing To The Appellant Which Is In Violation Of The Principles Of Natural Justice. 2. The Learned Cit(A) Has Erred In Law & On Facts In Stepping Into The Shoes Of The Appellant To Confirm The Additions. 3. The Learned Cit(A) Has Erred In Law & On Facts In Confirming Addition Of Cash In Hand Of Rs.62,76,216/- U/S 68 Of The Act.

For Appellant: Shri Tushar Hemani, Sr. Advocate &For Respondent: Shri Anurag Chandra, Sr DR
Section 234ASection 250(6)Section 271(1)(c)Section 68