COMMISSIONER OF INCOME TAX Vs. B.LAKSHMIKANTHAN

JUDGEMENT

(1.) THE common question raised in these two appeals filed by the Revenue against the very same assessee is whether in a reassessment completed under Section 153A read with Section 143 (1) of the Income Tax Act (hereinafter referred to as the Act for short), interest for short payment of advance tax is to be demanded for the period provided under Section 234B(1) or Section 234B(3) of the Act. While the case of the department is that interest is leviable under Section 234B(1) for the period stated therein, the case of the assessee is that interest could be levied under Section 234B(3) for the limited period specified therein.

(2.) WE have heard learned Standing Counsel appearing for the Revenue and Shri.Arun Raj learned counsel appearing for the respondent assessee.

(3.) THE question to be decided is the application and meaning of Sections 234B(1) and 234B(3) of the Act, and therefore, we extract hereunder these provisions for easy reference: - "234B(1) Subject to the other provisions of this section, where, in any financial year, an assessee who is liable to pay advance tax under section 208 has failed to pay such tax or, where the advance tax paid by such assessee under the provisions of section 210 is less than ninety per cent of the assessed tax, the assessee shall be liable to pay simple interest at the rate of (one) per cent for every month or part of a month comprised in the period from the 1st day of April next following such financial year (to the date of determination of total income under sub -section(1) of section 143 (and where a regular assessment is made, to the date of such regular assessment, on an amount)) equal to the assessed tax or, as the case may be, on the amount by which the advance tax paid as aforesaid falls short of the assessed tax. (3) Where, as a result of an order of reassessment or recomputation under Section 147 (or section 153A), the amount on which interest was payable under sub -section (1) is increased, the assessee shall be liable to pay simple interest at the rate of (one) per cent for every month or part of a month comprised in the period commencing on the day following (the date of determination of total income under sub -section (1) of section 143 (and where a regular assessment is made as is referred to in sub -section (1) following the date of such regular assessment)) and ending on the date of the reassessment or recomputation under section 147 (or section 153A), on the amount by which the tax on the total income determined on the basis of the reassessment or recomputation exceeds the tax on the total income determined (under sub -section (1) of section 143 or) on the basis of the regular assessment aforesaid."