Uncertainty in Levy of Interest u/s 234A in the case of Reassessment

V. K. SUBRAMANI – [2022] 136 taxmann.com 125 (Article)

One of the effective instruments provided by law to the tax administration is the reassessment of incomes which have escaped assessment earlier. It also includes income which was fully not charged to tax besides the income which was under-charged previously. Taxpayers generally do not like their tax records being revisited for one reason or the other because of the apprehension that what was given finality would get opened up with resultant after effect such as penal interest, penalty and any further consequence.
The legal provisions per se seem to be covering various ifs and buts and coarse when inserted in the statute book. However, in due course of time the human ingenuity throws different situations such that both the legislature and the courts revisit them to fine tune them.

This refresher takes note of interest under section 234A whether could be charged and if so, up to what date, it could be charged.

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