INCOME TAX ACT, 1961

Section 234C

Interest under section 234C - Advance tax - Order of Supreme Court in assessee's favour in dispute with bank - Interest

Assessee had a dispute with a bank and went up to the Supreme Court. Supreme Court dismissed the appeal filed by bank directed the Registry of Supreme Court to release the money deposited by bank in favour of assessee herein. Accordingly, assessee received a sum which resulted in a profit for the financial year 2013-14. The same was deposited in assessee's account. In the meantime, bank filed a review petition against the judgment of Supreme Court directing the release of money to assessee. Supreme Court dismissed the review petition filed by bank. Assessee on the ground that the matter was pending before the Supreme Court, paid the required advance tax for the assessment year 2014-15 only in the third quarter. However, the authorities on the ground that the advance tax was not paid in the first two quarters, charged interest under section 234C. Held: Though the amount was released to assessee on 3-10-2013, the same accrued to it on 15-7-2013 when Supreme Court dismissed the appeal of bank. Further, Supreme Court had directed its Registry to release the amount in favour of assessee on 5-8-2013. Order of the CBDT was clear that in such a situation, assessee would be obliged to pay the advance tax and on the accrual of income which in instant case accrued on 15-7-2013. Further, in absence of any interim order, mere filing of a review petition, before Supreme Court was no ground for non-payment of advance tax. Therefore, appeal was dismissed.

REFERRED :

FAVOUR : Against the assessee

A.Y. :

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