Law:

Section:

Section 234B, read with sections 147, 263 and 115J, of the Income-tax Act, 1961 - Interest, chargeable as - Assessment year 1989-90 - Assessee filed its income-tax return under section 115J - Said return was processed under section 143(1)(a) - Thereafter, Assessing Officer noticed that assessee had claimed excess deductions under sections 80HHC and 80-I - Consequently, after issuing a notice under section 148, an assessment order was passed under section 143(3)/147 - Interest under section 234B was imposed - Subsequently said assessment was revised under section 263 which resulted in enhanced assessed income - On such enhanced assessed income also interest under section 234B was imposed - Under appeals, both Commissioner (Appeals) and Tribunal reversed imposition of interest on ground that assessments completed under sections 147 and 263 were not regular assessments - Whether in view of statutory provisions of Explanation 2 to section 234B and further in view of Supreme Court's decision in K. Govindan & Sons v. CIT [2001] 247 ITR 192 / 114 Taxman 94 it was to be held that assessment under section 143(3)/147 is a regular assessment and, therefore, interest under section 234B could be charged - Held, yes - Whether once that was so, than assessment order passed in pursuance of revisional order enhancing assessed income would make assessee liable to interest under section 234B(4) - Held, yes [In favour of revenue] FACTS Assessee filed its income-tax return under section 115J declaring a total income of Rs. 43.58 lakh. Return was processed under section 143(1)(a) making prima facie adjustments which resulted in a refund of Rs. 1.76 lakh. Thereafter, the Assessing Officer found that the assessee had claimed excess deduction under sections 80HHC and 80-I which were allowed while processing the return under section 143(1)(a). Consequently, a notice under section 148 was issued to the assessee and an assessment order under section 143(3)/147 was framed at a total income of Rs. 11.62 lakh. Assessing Officer imposed interest under section 234B. Later on said assessment order was revised by the Commissioner of Income-tax under section 263 and a direction was issued to…

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