Computation of interest u/s 234A of the Income Tax Act

This case concerns the calculation of interest under Section 234A of the Income Tax Act for the Assessment Year 2018-19. The assessee inadvertently filed the wrong tax return form (ITR-II instead of ITR-III) and filed it late, leading to a higher interest charge. While the lower appellate authority granted some relief regarding the period of interest, they did not accept the argument that no interest should be charged if self-assessment tax was paid on time.

IN THE INCOME TAX APPELLATE TRIBUNAL
 Hyderabad ‘ B ‘ Bench, Hyderabad
(Through Video Conferencing)

Before Smt. P. Madhavi Devi, Judicial Member
AND
Shri A. Mohan Alankamony, Accountant Member

ITA No.1854/Hyd/2019
Assessment Year: 2018-19

Sri Bharath Bhushan
Agarwal,
Hyderabad
PAN:
(Appellant) 

Vs. 

Dy.CIT
Circle 14(1)
Hyderabad
(Respondent)
Assessee by: Sri M.V. Anil Kumar
Revenue by: Sri Rohit Mujumdar,DR

Date of hearing: 22/04/2021
Date of pronouncement: 09/06/2021

 ORDER

Per Smt. P. Madhavi Devi, J.M.

This is assessee’s appeal for the A.Y 2018-19 against the order of the CIT (A)-6, Hyderabad, dated 22.10.2019.

2. Brief facts of the case are that the assessee individual filed his return of income for the A.Y 2018-19 on 30.11.2018 declaring gross total income of Rs.5,07,03,257/-. The return of income was processed by CPC Bangalore u/s 143(1) of the Act and while computing the tax payable on the assessed income, the interest u/s 234A of the Act for a period of 3 months was levied i.e. at Rs.4,33,764/- as against Rs.89,176/- computed by the assessee in his return of income. 

3. Aggrieved, by the intimation, the assessee filed an application u/s 154 of the Act. However, the same was rejected. Aggrieved, the assessee filed an appeal before the CIT (A) stating that the assessee was a working partner in two partnership firms whose accounts were subjected to tax audit. He submitted that by mistake, inadvertently, the assessee had chosen ITR Form-II instead of ITR-III. He submitted that for the relevant A.Y, the due date for filing of the return for the individual was 31.08.2008 and for the firms, the due date was 30.09.2018. It was submitted that the assessee having earned income from partnership firms whose accounts were audited, the assessee should have filed ITR-III on or before 30.09.2018 whereas the assessee has filed the returns on 31.11.2018. He submitted that the CBDT had extended the time for filing of the return of income for the relevant A.Y, but for the purposes of interest u/s 234A, it was clarified that interest was applicable from the original due date for filing of return. Therefore, it was prayed that the interest u/s 234A should be levied only for two months as against three months levied by the Assessing Officer. The CIT (A) granted relief to the assessee. However, the assessee had also raised an objection that since the assessee has paid self-assessment tax before the due date of filing of the return of income, no interest u/s 234A should be charged. This contention of the assessee was not accepted by the CIT (A). Therefore, the assessee is in second appeal before the Tribunal by raising the following grounds of appeal: 

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