By C. N. Vaze, Shailesh Kamdar, Jagdish T. Punjabi, Bhadresh Doshi
Chartered Accountants
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Section 234D r.w.s. 2(40) of the Income-tax Act, 1961 — Reassessment made u/s.147 after completion of assessment u/s.143(3) cannot be termed as regular assessment and, consequently, interest u/s.234D is not chargeable in such reassessment.
Facts:
The assessee was given refund while processing the return u/s.143(1) and further refund was given after assessment u/s.143(3). In reassessment proceedings u/s.147, the refund amount got reduced and, therefore, the excess refund given earlier became collectible from the assessee. The Assessing Officer levied interest u/s.234D on such excess refund amount. The learned CIT(A) held that the interest u/s.234D is not chargeable in the hands of the company in reassessment proceedings.
Held:
The Tribunal upheld the CIT(A)’s order. The Tribunal noted as under:
(1) On a plain reading of section 234D, it is noticed that the interest u/s.234D is leviable only if the refund granted to the assessee u/s.143(1) of the Act becomes collectible in the order passed under regular assessment.
(2) As per section 2(40) read with Explanation to section 234D, ‘regular assessment’ is defined to mean assessment order passed u/s.143(3) or u/s.144 or where the assessment has been made for the first time u/s.147 or u/s.153A. Thus, reassessment proceedings u/s.147 after completion of the assessment u/s.143(3) is excluded from the purview of ‘regular assessment’.
(3) Such exhaustive definition of ‘regular assessment’ when considered in the light of the fact that in the appellant-company’s case the assessment u/s.147 has been made not for the first time, but after the completion of an assessment u/s.143(3), the same cannot be termed as regular assessment and, consequently, the provisions of section 234D cannot apply in the appellantcompany’s case.
