Interest u/s 234B can be levied on failure to Pay Advance Tax in respect of AMT: ITAT [Read Order]

A bench comprising Vijay Pal Rao (JM) and Vikram Singh Yadav (AM) of Income Tax Appellate Tribunal (ITAT) recently declared that Interest u/s 234B of the Income Tax Act can be levied on ground of non-payment of advance tax in respect of Alternative Minimum Tax.

The assessee is a partnership firm engaged in the business of jewellery. During the course of assessment proceedings, the AO charged interest u/s 234B by finding that the assessee did not pay the advance tax as per the provisions of section 115JC of the Income Tax Act.

Subsequently assessee filed a rectification application under section 154 of the Income Tax Act which was later rejected by AO.

The assessee challenged the order of the AO contending that the provisions of section 234B were not applicable on alternative minimum tax liability u/s 115JC. The CIT (A) has impressed with the contention of the assessee and upheld the decision of the AO in levying interest u/s 234 and rejecting the application filed by the assessee u/s 154 of the Act.

When the matter brought before the tribunal the assessee contended that during the return filing he made payment of AMT under the provisions of section 115JC however, while completing the assessment the AO charged interest u/s 234B for not paying the alternative minimum tax as per scheme of advance tax u/s 208 and the same is not applicable to the facts of the case and in respect of the tax payment made u/s 115JC.

While considering the rival submissions as well as the relevant record, the bench entertained a view that the issue of levy of interest u/s 234B and applicability of the provisions of sections 207 and 208 of the Act cannot be decided in the proceedings u/s 154 of the Act.

Confirming the order of the AO, the tribunal relied in the case of Apex Court in Rolta India Ltd.’s case (supra) and concluded that interest under Sections 234B and 234C shall be payable on failure to pay advance tax in respect of tax payable under Section 115JA/115JB which is already mentioned in CBDT circular no. 13/2001.