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Interest u/s 234A

ajay upadhyay (21 Points)

12 October 2019

whether provision of section 234A(1) are applicable in case of assessment u/s 147(first time assessment ) or no ?

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Jayesh Kumar (24 Points)
Replied 12 October 2019

Yes 234A is applicable. where return is furnished after the expiry of specified period i.e 30days from notice u/s 148

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ajay upadhyay (21 Points)
Replied 12 October 2019

In this case, return is filed within time in response to notice u/s 148 but earlier filed u/s 139 was late filed. during the calculation of interest under assessment u/s 147, interest u/s 234A would be charged ir not. please confirm.

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Suresh Thiyagarajan (Student) (3986 Points)
Replied 12 October 2019

1. Interest u/s 234A will not be chargeable during the period where ROI cannot be filed until the time notice was issued u/s 148.
2. Assessment u/s 147 for the first time will be considered as a regular assessment for the purpose of this as per explanation 3 of sec 234A.
3. It will be charged but the above period will be excluded.
Please correct me if the above solution has an alternative view.

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ajay upadhyay (21 Points)
Replied 12 October 2019

For A.Y. 2013-14, a person (individual & non-auditable case) filed his return on 28.11.2013 declaring total income of Rs. 1,05,110/-.
Further, notice u/s 148 was issued on 30.03.2018. Assessee filed return in response to notice u/s 148 on 10.04.2018. Assessment u/s 147 completed on 24.12.2018 determining total income of Rs.34,13,720/-.
Weather interest was to be charged u/s 234A(1) or u/s 234A(3) ?
is explanation 3 to section 234A(1) applicable in this matter ?

सार यह है कि 147 के निर्धारण आदेश की कर गणना में 234A का ब्याज लगेगा या नही ?

Suresh Thiyagarajan (Student) (3986 Points)
Replied 13 October 2019

1. In your case, the last date for filing the return relating to the AY 2013-14 is 31.03.2014 as per sec 139(4) of the act.
2. You have filed your return on 28.11.2013 for which you have already paid interest u/s 234A for a period of 8 months ( April'13 - Nov'13)
3. Now, when notice u/s 148 is issued, the time limit would have been allowed for filing return in lieu of such notice. If you have filed your return within that period then interest cannot be charged u/s 234A(3). If you have failed to file the return within such period then interest will be calculated from the date of issue of notice u/s 148 till the time return was filed in response to such notice.
4. Remember, income tax cannot ask you to pay interest wherein you have not been given the responsibility to file your return. Interest u/s 234A can be charged only when you are bound to file the return but you have not filed it within the time allowed for you to file.
5. Simple interest @ 1% p.m will be charged on your tax liability u/s 234A(3) in case if you have filed a return after the expiry of the time allowed u/s 148.
Please correct me if the above solution has an alternative view.

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ajay upadhyay (21 Points)
Replied 13 October 2019

In this case, income declared in the return filed u/s 139 was not taxable and also filed about 4 months late.
now assessment completed u/s 147 and income enhanced and also taxable. however return filed in response to notice u/s 148 is within time.
now 234A is chargeable or not ?

Suresh Thiyagarajan (Student) (3986 Points)
Replied 13 October 2019

1. If it is filed within the time limit allowed u/s 148 notice then interest should not come.
2. The only room for the department to charge interest u/s 234A is through subsection (3). If it is filed within the time allowed in the notice then interest will not be charged on your total income.
Please correct me if the above solution has an alternative view.