On appeal the High Court held that Department having raised the tax demand on reassessment, the liability for advance tax also stood increased and hence interest is chargeable at the rate provided under S. 234B(3) on the differential tax payable on reassessment since the tax paid under Section 140A stood refunded along with interest to the assessee even before the regular assessment. (AY. 1996-1997)
CIT v. Fertilizers and Chemicals Travancore Ltd. (2018) 166 DTR 181/ (2019) 307 CTR 349 (Ker.)(HC)
S. 234 B : Interest-Advance tax-Interest is chargeable at the rate provided under S.234B(3) of the Act on the differential tax payable on reassessment – as even before the regular assessment the tax paid under S. 140A was returned with interest and Department did not have any benefit of the amounts. [S. 140A, 234B(3)]