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

Amit Sureshbhai Masrani, Bhavnagar vs. The Income Tax Officer, Ward-1(1), Bhavnagar

In the result, the appeal filed by the assessee is allowed for the statistical purposes

ITA 330/AHD/2017[2012-13]Status: DisposedITAT Ahmedabad01 Oct 2019AY 2012-13

Bench: Shri Kul Bharat & Shri Waseem Ahmedआयकर अपील सं./Ita No.330/Ahd/2017 ("नधा"रण वष"/Assessment Year : 2012-13) बनाम/ Amit Sureshbhai Masrani The Ito Ward-1(1) Old Lig-566 Bhavnagar Vs. Anandnagar Bhavnagar-364 005 "थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Avdpm0160B (अपीलाथ"/Appellant) (""यथ" / Respondent) .. अपीलाथ" ओर से/ Appellant By : Smt. Aditi Sheth, Ar ""यथ" क" ओर से/Respondent By: Shri Nilabhra Dasgupta, Sr.Dr सुनवाई क" तार"ख/ Date Of Hearing 29/08/2019 घोषणा क" तार"ख /Date Of Pronouncement 01/10/2019 आदेश / O R D E R Per Bench: The Captioned Appeal Has Been Filed At The Instance Of The Assessee Against The Order Of The Commissioner Of Income Tax (Appeals)–6, Ahmedabad [Cit(A) In Short] Vide Appeal No.Cit(A)-6/40/15-16 Dated 28/11/2016 Arising In The Assessment Order Passed Under S.143(3) Of The Income Tax Act, 1961(Hereinafter Referred To As "The Act") Dated 18/03/2015 Relevant To Assessment Year (Ay) 2012-13. 2. The Assessee Has Raised The Following Grounds Of Appeal:- The Learned Cit(A) Has Erred Both In Law & On The Facts Of The Case In Confirming The Action Of Ao Of Disallowing An Amount Of Rs.17,59,085/- U/S.40(A)(Ia) R.W.S. 194H Of The Act. Amit Sureshbhai Masrani Vs. Ito Asst.Year - 2012-13 2. The Learned Cit(A) Has Erred Both In Law & On The Facts Of The Case In Confirming The Action Of Ao Of Disallowing Rs.16,22,125/- Out Of Retailer Support Incentive Expenses U/S.40(A)(Ia) Of The Act.

For Appellant: Smt. Aditi Sheth, ARFor Respondent: Shri Nilabhra Dasgupta, Sr.DR
Section 194HSection 234ASection 271(1)Section 40

ITO 33 (1)(5), Mumbai vs. Harshad M. Padia, Mumbai

In the result, appeals filed by the revenue for assessment year 2010-11

ITA 5821/MUM/2018[2010-11]Status: DisposedITAT Mumbai30 Sept 2019AY 2010-11

Bench: Shri S. Rifaur Rahman (Am) & Shri Ram Lal Negi (Jm) Assessment Year: 2010-2011 & Assessment Year: 2011-2012 The Ito-33(1)(5), Shri Harshadrai M. Padia, C-12, 703, Pratyakshakar Khyati Hydraulics, 13, Bhavan, Bkc, Gopal Kunj, Sarojini Naidu Mumbai - 400051 Vs. Road, Kandivali (West), Mumbai - 400067 Pan: Aabpp1488Q (Appellant) (Respondent) Revenue By : Shri C.S. Sharma (Dr) Assessee By : None Date Of Hearing: 24/09/2019 Date Of Pronouncement: 30/09/2019 O R D E R Per Ram Lal Negi, Jm These Appeals Have Been Filed By The Revenue Against The Orders Dated 08.06.2018 & 11.06.2018 Passed By The Commissioner Of Income Tax (Appeals)-45 (For Short ‘The Cit(A), Mumbai, For The Assessment Years 2010-11 & 2011-12 Respectively, Whereby The Ld. Cit(A) Has Partly Allowed The Appeals Filed By The Assessee Against The Assessment Order Passed U/S 143 (3) R.W.S 147 Of The Income Tax Act, 1961 (For Short The ‘Act’). Since, Both The Appeals Pertain To The Same Assessee, The Same Were Clubbed, Heard Together & Are Being Disposed Of By This Common & Consolidated Order For The Sake Of Convenience. The Brief Facts Of The Case Are That The Assessee An Individual & Proprietor Of M/S Khyati Hydraulics Engaged In The Business Of Manufacture Assessment Years: 2010-11 & 2011-12

For Appellant: NoneFor Respondent: Shri C.S. Sharma (DR)
Section 133(6)Section 142Section 143Section 148

Alpha Hi-Tech Fuel Ltd., Mumbai vs. The Deputy Commissioner of Income Tax, Snr Circle, Surendranagar

In the result, this appeal of the assessee is dismissed

ITA 67/RJT/2009[2004-05]Status: DisposedITAT Rajkot18 Sept 2019AY 2004-05

Bench: Shri Rajpal Yadav & Shri Waseem Ahmedआयकर अपील सं./I.T.A. Nos.578-581/Rjt/2008 ("नधा"रण वष" / Assessment Years : 2000-01 To 2003-04) & आयकर अपील सं./I.T.A. No.67/Rjt/2009 ("नधा"रण वष" / Assessment Year : 2004-05) बनाम/ Alpha Hi-Tech Fuel Limited, Cit(Appeals)-Xvi, Station Road, Lakhtar, Dist. Ahmedabad. Vs. Surrendranagar, Gujarat-382775 "थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Aaaca4258P (अपीलाथ" /Appellant) (""यथ" / Respondent) .. अपीलाथ" ओर से / Appellant By : Shri Kalpesh Doshi, A.R ""यथ" क" ओर से/Respondent By : Shri Anil Kumar Das, Dr. सुनवाई क" तार"ख / Date Of Hearing 16/09/2019 घोषणा क" तार"ख /Date Of Pronouncement 18/09/2019 आदेश / O R D E R Per Waseem Ahmed: The Captioned Appeals Have Been Filed At The Instance Of The Assessee Against The Appellate Orders Of The Commissioner Of Income Tax(Appeals)-Ii, Rajkot [Cit(A) In Short] Arising In The Assessment Order Passed Under S.143(3) Of The Income Tax Act, 1961 (Hereinafter Referred To As "The Act") Relevant To Assessment Years (A.Ys) 2000-01 To 2004-05. Ita No.578-581/Rjt/2008 A.Y.S 2000-01 To 2004-05 First We Take Assessee’S Appeal Bearing Ita No. 578/Rjt/2008. The Assessee Has Raised The Following Grounds Of Appeal:

For Appellant: Shri Kalpesh Doshi, A.RFor Respondent: Shri Anil Kumar Das, DR
Section 147Section 234ASection 254Section 271(1)(c)Section 80J

Alpha Hi-Tech Fuel Ltd., Mumbai vs. The Deputy Commissioner of Income Tax, Surendranagar Circle, Surendranagar

In the result, this appeal of the assessee is dismissed

ITA 578/RJT/2008[2000-01]Status: DisposedITAT Rajkot18 Sept 2019AY 2000-01

Bench: Shri Rajpal Yadav & Shri Waseem Ahmedआयकर अपील सं./I.T.A. Nos.578-581/Rjt/2008 ("नधा"रण वष" / Assessment Years : 2000-01 To 2003-04) & आयकर अपील सं./I.T.A. No.67/Rjt/2009 ("नधा"रण वष" / Assessment Year : 2004-05) बनाम/ Alpha Hi-Tech Fuel Limited, Cit(Appeals)-Xvi, Station Road, Lakhtar, Dist. Ahmedabad. Vs. Surrendranagar, Gujarat-382775 "थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Aaaca4258P (अपीलाथ" /Appellant) (""यथ" / Respondent) .. अपीलाथ" ओर से / Appellant By : Shri Kalpesh Doshi, A.R ""यथ" क" ओर से/Respondent By : Shri Anil Kumar Das, Dr. सुनवाई क" तार"ख / Date Of Hearing 16/09/2019 घोषणा क" तार"ख /Date Of Pronouncement 18/09/2019 आदेश / O R D E R Per Waseem Ahmed: The Captioned Appeals Have Been Filed At The Instance Of The Assessee Against The Appellate Orders Of The Commissioner Of Income Tax(Appeals)-Ii, Rajkot [Cit(A) In Short] Arising In The Assessment Order Passed Under S.143(3) Of The Income Tax Act, 1961 (Hereinafter Referred To As "The Act") Relevant To Assessment Years (A.Ys) 2000-01 To 2004-05. Ita No.578-581/Rjt/2008 A.Y.S 2000-01 To 2004-05 First We Take Assessee’S Appeal Bearing Ita No. 578/Rjt/2008. The Assessee Has Raised The Following Grounds Of Appeal:

For Appellant: Shri Kalpesh Doshi, A.RFor Respondent: Shri Anil Kumar Das, DR
Section 147Section 234ASection 254Section 271(1)(c)Section 80J