IBM India liable to pay interest for delay in filing ITR on incremental income pursuant to APA: ITAT

IBM India Pvt. Ltd. Vs ACIT (ITAT Bangalore)

It has been submitted by Ld.Counsel that as a consequence of APA entered into by assessee, income was increased vis-a-vis original computation at page 322. Referring to revised computation at page 328 of paper book volume 1, he submitted that, incremental increase in the income is Rs.7,74,2 1,28,914/- pursuant to APA on which interest under section 234B cannot be living.

Having said so, Ld.Counsel also admitted that 234B is a mandatory levy, by referring to decision of Hon’ble Supreme Court in case of CIT vs. Anjum.M.H. Ghaswala reported in (2001)119 Taxman352. However, he submitted that, interest under section 234B can’t be casted, unless there is a default in making advance tax. And in the present case, there is an increase in the income of assessee, post APA. He placed reliance on decision of Hon’ble Bombay High Court in case of Prime Securities vs ACIT reported in (2012) 20 taxman.com 757, Hon’ble Gujrat High Court in case of CIT vs. Rainbow reported in 277 ITR 507 and decision of ITAT in case of JSW Steel Ltd

On the contrary, Ld.Standing Counsel for revenue, emphasised that, interest under section 234B is a mandatory levy, as the section defines levy of interest on the assessed tax. In the present facts of case, tax is assessed including incremental income due to APA and therefore the consequence should follow.

We have perused submissions advanced by both sides in light of records placed before us. Assessee does not dispute that advance tax is payable on incremental income. Tax has to be paid on additional income, which did not form part of original return of income.  Ld.Counsel relied on following decisions:

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