Interest under Secs. 234A and 234B of the Income-tax Act, 1961 is liable to be charged on the tax payable on the returned income and not on the assessed income.

D.P.Wadhwa, J.

1. In these eight writ applications, we have heard common arguments. The questions raised are with respect to chargeability of interest under Sections 234A, 234B and 234C of the Income-tax Act, 1961 (for short, "the Act"). These sections were inserted by the Direct Tax Laws (Amendment) Act, 1987, with effect from April 1, 1989. A Bench of this court in Ranchi Club Ltd. V/s. OT [1996] 217 ITR 72 (Patna), while interpreting Secs. 234A and 234B of the Act, held that interest under these sections should not be charged on excess tax as per income determined under Secs. 143(3)/144 of the Act and said that interest under Sec. 234A was leviable on the tax on the total income as declared in the return. The correctness of this decision has been doubted before us by the Revenue and it has been submitted that the matter be referred to a larger Bench for an authoritative decision.

2. While Sec. 234A deals with levy of interest for default in furnishing return of income ; under Sec. 234B interest has to be levied for defaults in payment of advance tax and under Sec. 234C interest is payable for deferment of advance tax. Since the aforesaid decision of this court in Ranchi Club Ltd. v. CIT [1996] 217 ITR 72 really interpreted the provisions of Sec. 234A, we may set out the relevant part of this section as under :

"234A. Interest for defaults in furnishing return of income.-- (1) Where the return of income for any assessment year under Sub-sec. (1) or Sub-sec. (4) of Sec. 139, or in response to a notice under Subsection (1) of Section 142, is furnished after the due date, or is not furnished, the assessee shall be liable to pay simple interest at the rate of two per cent. for every month or part of a month comprised in the period commencing on the date immediately following the due date, and,-- (a) Where the return is furnished after the due date, ending on the date of furnishing of the return ; or

(b) Where no return has been furnished, ending on the date of completion of the assessment under Sec. 144, on the amount of the tax on the total income as determined under Sub-sec. (1) of Sec. 143 or on regular assessment as reduced by the advance tax, if any, paid and any tax deducted or collected at source.

Explanation 1.--In this section, due date means the date specified in Sub-sec. (1) of Sec. 139 as applicable in the case of the assessee.

Explanation 2.--In this sub-section, tax on the total income as determined under Sub-sec. (1) of Sec. 143 shall not include the additional income-tax, if any, payable under Sec. 143.

Explanation 3.--Where, in relation to an assessment year, an assessment is made for the first time under Sec. 147, the assessment so made shall be regarded as a regular assessment for the purposes of this section.

Explanation 4.--In this sub-section, tax on the total income as determined under Sub-sec. (1) of Sec. 143 or on regular assessment shall, for the purposes of computing the interest payable under Sec. 140A, be deemed to be tax on total income as declared in the return.

(2) The interest payable under Sub-sec. (1) shall be reduced by the interest, if any, paid under Sec. 140A towards the interest chargeable under this section. . . ."

3. While coming to the conclusion that interest under Sec. 234A was leviable on the tax on the total income as declared in the return this court had placed reliance on Explanation 4 to Sec. 234A, the decision of the Supreme Court in J. K. Synthetics Ltd. V/s. CTO, AIR 1994 SC 2393 ; [1994] 94 STC 422 and on the general principle that interest was payable in future only after the dues were finally determined.

4. In this batch of eight writ applications, five pertain to cases of the Ranchi Club itself. The earlier decision in the case of Ranchi Club [1996] 217 ITR 72 (Patna) was with respect to the assessment year 1991-92. Now the assessment years involved are 1989-90, 1990-91, 1992-93, 1993-94 and 1994-95. In two cases for the assessment years 1989-90 and 1990-91, the as