Readers must be recollecting the content of the article Are You Charged With Illegal Interest u/s 234A ? wherein it was pointed out that every tax payer should check the intimation and assessment order to check if the CPC or the assessing officer has charged the interest u/s 234A even in those cases where the total tax was paid before due date for filing of tax return , but the actual return was filed late.
It was pointed out that Hon’ble Supreme Court held in case of Supreme Court CIT v. Dr. Prannoy Roy and Another, 19 DTR 102 (SC) upheld the Delhi High Court’s decision in the same case that interest u/s 234A would be payable only in a case where tax has not been deposited prior to the due date of filing of the income-tax return
CBDT Issues Circular on Interest u/s 234A
CBDT has now issued circular stating that present practice of charging interest u/s 234A should be stopped in view of Supreme Court order in Dr. Prannaoy Roy case. Read the circular below:
What Now ?
This circular is partial . Because the Board has accepted a wrong practice , it must instruct the assessing officers to return all tax in form of interest u/s 234A from all such cases.