Interest u/s 234B

This query is : Resolved

Bhaskaran Chackrapani Warrier (Querist)
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19 February 2011 Can the settlement commission levy interest under section 234B of the Income tax Act,1961 up to the date of passing final order by them.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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20 February 2011 The prescribed procedure for passing an order by settlement commission includes for giving an opportunity to the applicant to be heard.
After hearing the applicant the commission may pass such order as it think fit.
The order may cover matters referred in the application or any other matter not covered by the applicant but referred to in the reports of the Commissioner.

In my opinion, if the settlement commission thinks it fit to levy interest
U/s 234B, it is not ultra virus for the Commission as the tax payable by the applicant is also going to be decided by the Commission only.

I would like to draw your attention towards the provisions of section 234B(4) also, which prescribes that as a result of the order of the Settlement Commission U/s (4) of section 245D, if any amount of advance tax payable increases, the assessing officer shall proceed further to recover interest U/s 234B.

However, I will like to be informed about the opinion of well informed experts
in this matter.

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CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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20 February 2011 Please also go through the link (may be useful to you)
http://www.lawyersclubindia.com/judiciary/Section-234B-applies-to-proceedings-of-Settlement-Commission-under-Chapter-XIX-A-of-IT-2237.asp

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Guest (Expert)

20 February 2011 No interest u/s 234B can not be charged up the date of order by settlement commission but it will be charged only for the period as mentioned in the Sub-sec-(1) and (3) of Sec. 234B.