Sandeep Ahuja & Co.

Established in the year 1986, we are a leading chartered accountancy firm based in Delhi & NCR rendering comprehensive professional services which include statutory audit, internal audit, direct tax, transfer pricing, GST, bank audit, propriety audit, cost accounting, internal financial controls and risk advisory.

Monday, November 3, 2014

Madras high court stays on the levy of interest U/S 234A for Asst Year 14-15 for Income Tax Returns where due date is extended

The CBDT vide order dated 20th August, 2014 extended the due date for obtaining and furnishing of Tax Audit Report under section 44AB of the Act for AY 2014-15 from 30.09.14 to 30.11.14. Subsequently, a number of requests were made for extension of the due date for furnishing of return of income also. Writ petitions were also filed in various High Courts for directing the CBDT to extend the due date ffrom 30.09.14 to 30.11.14 for furnishing of return of income  in conformity with the extension of the due date for filing of Tax Audit Report.

It was logical to also extend the due date for filing of the I-T return to 30.11.14 as the due date for filing of the tax audit report was extended till November 30  (due to late Introduction of several changes  in Form 3CD),
However, such extension was granted subject to charge of interest under Section 234A for the period commencing from 01-10-2014 and up to the actual date of filling the return of income. Interest under section 234A will not be levied if taxpayer covered under tax audit provisions pays the tax on or before 30.09.2014.

The levy of interest under section 234A of the Income Tax Act,1961 is unjustified and against the provisions of the law. If the penalty was levied, the purpose of extending the due date of filing the I-T return itself was defeated. The Madras high court granted an interim stay on the levy of interest U/S 234A for Interest from 1.10.14 till filing of Return. It held, “I-T returns shall be accepted by tax authorities without any levy of interest under section 234A.”

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