Law:

Section:

Provisions of sections 234B and 234C would be attracted even in case where a company is assessed on income computed under section 115JA Section 234B, read with sections 234C and 115JA, of the Income-tax Act, 1961 - Interest - Chargeable - Assessment year 1999-2000 - Whether where a default within meaning of sections 234B and 234C takes place, levy of penal interest is automatic and there is no scope for applying principles of equity or rules of natural justice - Held, yes - Whether levy of tax or interest does not amount to adjustment in income or loss declared in return as envisaged under section 143(1)(a) - Held, yes - Whether since advance tax is payable on current income irrespective of whether same is computed under section 115JA or under other provisions of Act, provisions of sections 234B and 234C would be attracted even in case where a company is assessed on income computed under section 115JA - Held, yes FACTS The assessees filed their respective returns declaring income computed as per provisions of section 115JA. While processing the returns, the Assessing Officer charged interest under sections 234B and 234C on the tax determined on the returned income. On appeals, the Commissioner (Appeals) deleted the levy of interest under sections 234B and 234C and also held that the issue as to levy of interest in a case where tax was levied on the basis of income computed under section 115JA was a debatable one which fell outside the ambit of section 143(1)(a). On further appeals, the Tribunal upheld the orders of the Commissioner (Appeals). On appeals under section 260A : HELD A perusal of clause (i) of section 143(1)(a) shows that the Assessing Officer has to determine the tax or interest found due on the basis of the return after adjustment of pre-paid tax or interest and send an intimation to the assessee specifying the amount payable by him. Tax and interest has to be computed as per the provisions of the Act. Sub-clause (ii ) provides for grant of refund if the assessee is found to be so entitled on the basis of the return. The first proviso describes the adjustments which the Assessing Officer is required to make in the income or loss declared in the…

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