There has been long standing debate on the levy of the interest under section 234D for the assessment year prior to AY 2004-05.
Special bench of Hon. ITAT, in the matter of M/s Ekta Promoters Pvt Ltd 113 ITD 719 has held as under:
interest under section 234D is chargeable from assessment year 2004-05 and it could not be charged for earlier years even though regular assessments for these years are framed after 1-6-2003 or the refund was granted for those years after the said date.
This decision has been followed consistently.
However, Hon Kerala High Court in the matter of THE COMMISSIONER OF INCOME TAX,
Vs
M/S KERALA CHEMICALS & PROTEINS LTD., ITA.No. 1692 of 2009
has held as under:
However, we vacate the finding of the Tribunal that Section 234D is applicable only from the assessment year 2004-05 onwards. The view taken by the assessing officer that Section applies from 1.6.2003 is the correct position
Copy of all the judgments are available at following links:
http://www.mediafire.com/file/gmzmzotyzrl/234D by Kerala High Court.pdf
http://www.mediafire.com/file/mgwm0jqck22/ekta promoters.xps
http://www.mediafire.com/file/0tiym2dcv2n/MUM ITAT on 234D SBI capital market.pdf