Saturday, 19 May 2012

S. 234A, 234B & 234C interest, though mandatory, is not payable if AO does not direct it to be charged in assessment order

CIT vs. Awadh Hotels (P) Ltd (Allahabad High Court)


The AO passed a s. 143(3) assessment order in which he omitted to direct that interest u/s 234A, 234B & 234C should be levied. The Tribunal, relying on Ranchi Club Ltd 247 ITR 209 (SC) held that in the absence of a specific direction, interest was not leviable. Before the High Court, the department relied on the larger bench decision in Anjum M.H Ghaswala 252 ITR 1 (SC) and argued that as interest u/s 234A, 234B & 234C was mandatory, there was no need for the assessment order to specifically direct that interest should be charged. HELD dismissing the appeal:

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