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

Dinesh Soaps and Detergents, Kanpur vs. The Assistant Commissioner of Income Tax, Kanpur

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

ITA 669/LKW/2025[2017-18]Status: DisposedITAT Lucknow24 Sept 2026AY 2017-18

Bench: Sh. Sudhanshu Srivastava & Sh. Nikhil Choudharya.Y. 2017-18 Dinesh Soaps & Detergents, Vs. The Asstt. Commissioner Of Income 3/44 Vishnupuri, Kanpur Tax, Kanpur Pan: Aacfd1610M (Appellant) (Respondent) Assessee By: Sh. Rakesh Garg, Advocate Revenue By: Sh. Puneet Kumar, Cit Dr Date Of Hearing: 12.08.2026 Date Of Pronouncement: 24.09.2026 O R D E R Per Nikhil Choudhary, A.M.: This Is An Appeal Filed By The Assessee Against The Order Of The Ld. Cit(A), Nfac Dated 21.08.2025, Wherein The Ld. Cit(A) Has Dismissed The Appeal Of The Assessee Against The Order Passed By The Ld. Assessing Officer For The Assessment Year 2017-18, Passed Under Section 143(3) Of The Income Tax Act, 1961 On 6.12.2019. The Grounds Of Appeal Are As Under:- “A. Because, On The Facts & Circumstances Of The Case & In Law, The Ld. Cit(A) Has Passed An Order Dated 21.08.2025 Which Is Erroneous, Bad In Law & Contrary To The Principles Of Natural Justice. B. Because, On The Facts & Circumstances Of The Case & In Law, The Ld. Cit[A] Has Erred By Not Admitting The Additional Evidence Filed By The Appellant Under Rule 46A Of The Income-Tax Rules, 1962, Thereby Violating The Principles Of Natural Justice. C. Because, On The Facts & Circumstances Of The Case & In Law, The Ld. Cit[A] Has Failed To Appreciate That The Appellant Was Prevented By "Sufficient Cause", Being Multiple Tragic Deaths In The Family Leading To Severe Mental Distress & Business Closure, From Producing The Said Evidence Before The Assessing Officer.

For Appellant: Sh. Rakesh Garg, AdvocateFor Respondent: Sh. Puneet Kumar, CIT DR
Section 115BSection 143(3)Section 144Section 43BSection 68

Sultanpur Zila Sahkari Bank Limited, Sultanpur vs. ACIT, DCIT Circle Faizabad

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

ITA 382/LKW/2025[2015-16]Status: DisposedITAT Lucknow24 Sept 2026AY 2015-16

Bench: Sh. Sudhanshu Srivastava & Sh. Nikhil Choudharya.Y. 2015-16 Sultanpur Zila Sahkari Bank Limited, Vs. Acit/Dcit, Faizabad Collectorate Campus, Allahabad Road, Sultanpur City S.O. Sultanpur, 228001 Pan: Aanas6008C (Appellant) (Respondent) Assessee By: Sh. Mahendra Kumar, Fca Revenue By: Sh. Sanjay Kumar, Cit Dr Date Of Hearing: 20.08.2026 Date Of Pronouncement: 24.09.2026 O R D E R Per Nikhil Choudhary, A.M.: This Is An Appeal Filed By The Assessee Against The Order Of The Ld. Cit(A), Nfac Dated 21.03.2025, Wherein The Ld. Cit(A) Has Dismissed The Appeal Of The Assessee, Against The Order Passed By The Ld. Assessing Officer For The Assessment Year 2015-16 Under Section 143(3) R.W.S. 263 Of The Income Tax Act, 1961 On 26.12.2019. The Grounds Of Appeal Are As Under:- “1. Ground-The Assistant Commissioner Of Income Tax, Sultanpur (Hereinafter Referred To As The Ld. A.O.) Erred On Facts & In Law Passing The Assessment Order U/S 263/143(3) Of The Act Without Appreciating The Fact That The Original Assessment Order Passed On 20.12.2017 Was Neither Erroneous Nor Prejudicial To The Interest Of The Revenue. 2. Ground-The Ld. A.O. Erred On Facts & In Law In Making Addition Of Rs.7.46 Crores To The Returned Loss Of The Appellant By Way Of Invoking The Provisions Of Section 2(24)(X) Of The I.T. Act, 1961 Without Appreciating The Facts Of The Case & Ignoring The Prevailing Law. 3. Ground-The Ld. A.O. Erred On Facts & In Law In Making Addition Of Rs.7.46 Crores To The Returned Loss Of The Appellant Without Appreciating The Fact That The Gross Amount Of Rs.7.46 Crores Was Pertaining To Different

For Appellant: Sh. Mahendra Kumar, FCAFor Respondent: Sh. Sanjay Kumar, CIT DR
Section 143(3)Section 2(24)(x)Section 234ASection 263