Indian Kanoon - Search engine for Indian Law

the assessee by assessing the income at Rs. 54,41,76,816/- by making an addition of Rs. 21,29,570/- added to the income of assessee u/s 36 of the Act and due to the same reduced the refund as claimed by assessee from Rs. 43,90,290/- to Rs. 36,25,442/- by the AO. The ld. AO after assessed the income of assessee at Rs. 54,41,76,816/- necessary tax was computed at Rs. 15,93,37,508/- by collecting interest u/s 234C of the Act at Rs. 20,43,522/-.

3. Aggrieved by the above order assessee went into appeal before the ld. CIT(A) where the ld. CIT(A) has confirmed the addition of Rs. 21,29,570/- on account of delayed payment of employees contribution towards PF & ESI, though the same has been deposited by the assessee in the Govt. account much before the prescribed due date as made u/s 139(1) of the Act and similarly on another issue of charging interest u/s 234C at an assessed income. However, according to assessee, the view taken by the ld. CIT(A) charging of interest on assessed income which is contrary to the provisions of law.

7. The issue no. 6 of the appeal is in relation with charging of interest u/s 234C of the Act on assessed income in place of return income filed by the assessee while passing the impugned order by ld. CIT(A) against the assessee. On this context, the ld. AR stated that interest u/s 234C of the Act is applicable only on the returned income filed by the assessee. However, the ld. CIT(A) while passing the order holding that charging of interest u/s 234C of the Act on the assessed income which is contrary to the ITA Nos. 466 & 467/Kol/2022 AY: 2018-19 And 2019-20 M/s. Deepak Industries Ltd.

law. In order to substantiate his claim the ld. AR brought to our notice to the provisions of section 234C of the Act which is read as under:

"Interest for deferment of advance tax 234C (1) Where in any financial year,--

(a) the company which is liable to pay advance tax under section 208 has failed to pay such tax or--

(i) the advance tax paid by the company on its current income on or before the 15th day of June is less than fifteen per cent of the tax due on the returned income or the amount of such advance tax paid on or before the 15th day of September is less than forty-five per cent of the tax due on the returned income or the amount of such advance tax paid on or before the 15th day of December is less than seventy-five per cent of the tax due on the returned income, then, the company shall97 be liable to pay simple interest at the rate of [one] per cent per month for a period of three months on the amount of the shortfall from fifteen per cent or forty-

(2) The provisions of this section shall apply in respect of assessments for the assessment year commencing on the 1st day of April, 1989 and subsequent assessment years.]]"

8. From the perusal of above provisions of law as cited by the ld. AR of the assessee it is clear that interest u/s 234C of the Act has to be collected on returned income. As per explanation to section 234C(1) of the Act "tax due on returned income" means the tax chargeable on the total income declared in the returned income furnished by assessee only relevant assessment year. From the above, it is clear that interest chargeable to the assessee u/s 234C of the Act on the returned income in place of assessed income as viewed by the ld. CIT(A) in his order. Accordingly the ground is allowed in favour of the assessee with the direction to AO to calculate the interest u/s 234C of the Act on the returned income as made by the assessee.