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Commissioner Of Income-Tax And Ors. vs Ranchi Club Ltd. on 1 August, 2000

In CIT v. Ranchi Club Limited (supra) the question was as to whether levy of interest under Section 234A was justified. Liability under this provision arises where the assessee fails to file the return of income either under Section 139(1) or (4) or Section 142(1) of the Act pursuant to the notices issued there under or files the same after the due date. In this context, the Patna High Court was of the opinion that where return is filed within time, but a particular item of income is in dispute as being includible within tax income or not, the mere issue of notice under Section 142 will not confer jurisdiction upon the authority to levy interest under Section 242A of the Act. Section 234B of the Act, on the other hand, authorizes the Revenue to charge interest in case no advance tax is paid or short paid. Sub-Section (1) thereof read as under:-
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