GVR Ashoka Chennai Corr Limited Vs ACIT (ITAT Chennai)
No 234A interest once self-assessment tax is fully paid before March
Chennai ITAT held that interest u/s 234A cannot be levied for March 2022 where the assessee had already discharged the entire self-assessment tax liability before the start of that month. The assessee paid full self-assessment tax of ₹2.47 crore on 26-02-2022 & filed the return on 09-03-2022 within the extended due date of 15-03-2022. The Tribunal reiterated that section 234A is compensatory & applies only when tax remains unpaid. Once the tax liability stood fully discharged prior to 01-03-2022, there was no subsisting default & hence no basis to levy interest for March. Reliance placed by the lower authorities on the Explanation to section 140A(1) & Rule 119A was held to be misplaced, as those provisions deal with appropriation of payments where tax remains due. The Tribunal followed CBDT Circular No.2/2015 & the Supreme Court decision in Prannoy Roy (309 ITR 231) & directed deletion of interest levied u/s 234A for March 2022.
FULL TEXT OF THE ORDER OF ITAT CHENNAI
The captioned appeal by the assessee is arising out of the order of the Ld. Commissioner of Income Tax (Appeals) ADDL/JCIT(A) AGRA dated 31.07.2025 for AY 2021-22, wherein the levy of interest under section 234A for the month of March 2022 has been upheld. The assessee contests only the levy of such interest despite having fully discharged its self-assessment tax liability prior to 01.03.2022.
