Interest u/s 234A cannot be Levied If Income Tax Return filed within Due Date: ITAT [Read Order]

The Bangalore bench of Income Tax Appellate Tribunal (ITAT) recently held that interest under section 234A of income tax act 1961 could not be levied if income tax return filed within the due date.

Assessee  Eurofins IT Solutions India Pvt. The company works on development of various applications for the Eurofins Group such as e-commerce, Middleware, ERP, Invoicing, CRM, Website, Mobile applications. The entire revenue of Eurofins India is generated from services rendered to Eurofins Group companies as software development and maintenance services. The company is also engaged in providing IT Infra Support Services.

After the assessment procedure the assessing officer without considering the fact that the assessee had filed its original return of income within the time limit prescribed under section 139(1) of the Income Tax Act 1961 levy interest under section 234A of the Income Tax Act 1961.Against this order assessee filed appeal before ITAT.

234A of the Income Tax Act 1961 provides that if an assessee fails to furnish his income tax return within due date, or filed after the due date the assessee shall be liable to pay a simple interest at the rate of 2 percent for every month.

Shri Nageswar Rao counsel for the assessee submits that assessee filed return of income within the time stipulated in section 139(1) of the Income Tax Act 1961 and as such there was no delay in filing the return of income. The levy of interest under section 234A of the Income Tax Act 1961 is bad in law.

Sri Sreenivas T. Bidari, counsel for the revenue confirmed the decision of levying interest under section 234A of the Income Tax Act 1961 Act.

After considering the contentions of the both parties the division bench of ITAT comprising N.V. Vasudevan, (vice president) and. Chandra Poojari, (Accountant Member) allowed the appeal filed by the assessee  and observed that assessee filed return of income within the time stipulated in section 139(1) of the Income Tax Act 1961 and as such there was no delay in filing the return of income.

Further the assessing officer is required to be verified at the end if the return has been filed within the due date prescribed under section 139(1) of the Income Tax Act 1961, there could not be any levy of interest under section 234A of the Income Tax Act 1961.

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