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

Laqshya Media Limited, Mumbai vs. Deputy Commissioner of Income Tax-10(2)(1), Mumbai

In the result this ground of appeal is allowed for statistical purposes

ITA 7310/MUM/2018[2014-15]Status: DisposedITAT Mumbai17 Jul 2020AY 2014-15

Bench: Shri Pawan Singh & Shri M. Balaganesh(Virtual Hearing In Vc No. –Ii) M/S. Laqshya Media Ltd. D C I T - 10(2)(1) Laqshya House Room No. 509/216A Next To Rameshwar Temple, Vs. Aayakar Bhavan, M.K. Road Saraswti Baug, Society Road, Mumbai 400020 Jogeshwari (E), Mumbai 400060 Pan – Aaacl5004C Appellant Respondent Appellant By: Shri Rajan Vora-Ar Respondent By: Shri Anand Mohancit-Dr Date Of Hearing: 08.07.2020 Date Of Pronouncement: 17.07.2020 O R D E R Per Pawan Singhthis Appeal Filed By The Assessee Is Directed Against The Assessment Order Passed By The Assessing Officer Under Section 143(3) R.W.S. 144C(1) Of The Income Tax Act, 1961 (Hereinafter "The Act") Dated 29Th October, 2018, Passed In Pursuance Of The Directions Of Dispute Resolution Penal (Drp) Dated 28Th August, 2018 For A.Y. 2014-15. 2. The Assessee Has Raised The Following Grounds Of Appeal: - “On The Facts & In The Circumstances Of The Case & In Law, The Learned Ao/ Learned Deputy Commissioner Of Income-Tax, Transfer Pricing - 3(1)(1)(Hereinafter Referred To As Tpo')/ Hon'Ble Drp Has: General Ground 1. Erred In Assessing The Total Income At 5,67,38,117As Against Returned Loss Of Rs.8,55,13,089 Computed By The Appellant; Part B -Transfer Pricing Ground: 2. Adjustment Of Rs.20.58.028/- Pertaining To Providing Of Corporate Guarantee (Cg) To Associated Enterprise (Ae)

For Appellant: Shri Rajan Vora-ARFor Respondent: Shri Anand MohanCIT-DR
Section 143(3)Section 36(1)(iii)Section 92BSection 92C

Cheryl J Patel, Mumbai vs. ACIT CC13, Mumbai

In the result, the appeals of assessee are partly

ITA 5540/MUM/2012[2003-04]Status: DisposedITAT Mumbai07 Jul 2020AY 2003-04

Bench: Sri Mahavir Singh, Vp & Sri Manoj Kumar Aggarwal, Am आयकर अपील िं./ Ita No.5544/Mum/2012 (ननर्ाारण वर्ा / Assessment Years 2003-04) Mr. Punit J Patel The Asst. Commissioner Of B/27, Clifton Society Near Centuar Income Tax, Central Circle-13 बनाम/ Hotel, Juhu Vile Parele (W), Mumbai Vs. Mumbai-49 (अपीलार्थी / Appellant) (प्रत्यर्थी/ Respondent) स्र्थायी लेखा िं./Pan No. Agrpp9056G आयकर अपील िं./ Ita No.5540/Mum/2012 (ननर्ाारण वर्ा / Assessment Years 2003-04) आयकर अपील िं./ Ita No.5541/Mum/2012 (ननर्ाारण वर्ा / Assessment Years 2004-05) Mrs. Cheryl J Patel The Asst. Commissioner Of B/27, Clifton Society Near Centuar Income Tax, Central Circle-13 बनाम/ Hotel, Juhu Vile Parele (W), Mumbai Vs. Mumbai-49 (अपीलार्थी / Appellant) (प्रत्यर्थी/ Respondent) स्र्थायी लेखा िं./Pan No. Aacpp6413A अपीलार्थी की ओर े/ Appellant By : Shri Nishit Gandhi, Ar प्रत्यर्थी की ओर े/ Respondent By : Shri Sreekar, Cit Dr ुनवाई की तारीख / Date Of Hearing: 07.07.2020 घोर्णा की तारीख / Date Of Pronouncement: 07.07.2020 आदेश / O R D E R

For Appellant: Shri Nishit Gandhi, ARFor Respondent: Shri Sreekar, CIT DR
Section 132Section 143(3)Section 153A