PRANNOY ROY Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) Interpretation of the provisions of Section 234A of the Income-tax Act, 1961 (hereinafter referred to as the 'Act') is in question in this writ petition.

(2.) The brief facts are as under :- The petitioners earned substantial capital gains for the assessment year 1995-96 for which the return was due to be filed on 31.10.1995. However, taxes due were paid on 25.09.1995, i.e., before the due date of filing of the return, but the return was filed on 29.09.1996, i.e., after a delay of about 11 months. Though returned income was accepted on 29.01.1998, yet interest has been charged under the provisions of Section 234A on the ground that tax paid on 25.09.1995 cannot be reduced from the tax due on assessment. The assessee filed a revision petition under Section 264 of the Act on 09.11.1998 before the Administrative Commissioner requesting to delete interest charged under Section 234 of the Act. The Commissioner in his order dated 09.03.1999 upheld the action of the Assessing Officer stating that reduction of tax paid on 25.09.1995 is not provided in Section 234A of the Act, as it compensates for delay/default in filing of return of income and not the tax. Thus, against the said order of the Commissioner passed on 09.03.1999, the assessee filed a writ petition under Article 226/227 of the Constitution of India (in short, the 'Constitution') before this Court seeking for a writ of certiorised mandamus in respect of the said order passed under Section 264 of the Act upholding levy of interest under Section 232A of the Act.

(3.) The heading of Chapter XVII-F is 'Interest Chargeable in Certain Cases'. It comprises of Sections 234A, 234B, and 234C. The said provisions were inserted by Direct Tax Laws (Amendment) Act, 1987 with effect from 01.04.1989.