In a recent ruling, the Income Tax Appellate Tribunal (ITAT), Bangalore bench has directed the Assessing Officer to re-verify the calculation of interest under section 234C of the Income Tax Act, 1961 on the basis of the allegation of the assessee that the excess payment of advance tax was ignored.
The assessee, ABB Limited challenged an order of the income tax department on the ground that for the 1st quarter, namely, 15.06.2005, interest at the rate of 1% for three months is computed by the A.O. without considering t he fact that the assessee has paid 12% of the tax payable. For the first quarter, i.e., 15.06.2005 thereby complying with provisions of section 234C (refer provisions to section 234C(1)(a) of the I.T.Act). Therefore, the assessee prayed that the matter may be remanded to the A.O. to recalculate interest levied u/s 234C of the Income Tax Act.
A two-Member bench consists of Mr. George George K, (JM) and Ms. Padmavathy S (AM) held that “We have heard rival submissions and perused the material on record. The learned AR has given a table, wherein it is claimed that excess payment of advance tax for the 1st and the last quarter has been ignored while calculating interest u/s 234C of the Income Tax Act. The A.O. is directed to examine the correctness of the claim of the assessee as regards the calculation of interest u/s 234C of the Act and grant relief in accordance with law. Accordingly, ground 2 in additional ground is restored to the A.O.
Advocate Ms.Vasanti Patel appeared for the assessee.
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