The levy of additional tax under Section 140B(3) should account for procedural delays in the availability of electronic filing utilities, and interest under Section 234A is compensatory in nature, ceasing strictly upon the payment of the full tax liability.

आदेश /O R D E R

PER MANU KUMAR GIRI, JM:

This appeal filed by the assessee is directed against the order of the Ld. Commissioner of Income Tax(Appeals), Addl/JCIT(A), Agra [hereinafter the “Ld.CIT(A)”] dated 29.03.2025 arising out of the intimation dated 27.12.2023 issued by the Deputy Director of Income Tax, CPC, Bengaluru (hereinafter referred to as the "AO") passed u/s.143(1) of the Income-tax Act, 1961 (hereinafter "the Act') for the Assessment Year 2020-21 (hereinafter the"AY").

2. Chronical dates chart is as under:

3. Brief facts of the case are as under: The assessee is an individual and has not filed his return of income within the due date as per sections 139(1) or 139(4) of the Act. The assessee paid self-assessment income tax of Rs.3,07,667/-, interest of Rs.1,46,395/- u/s.234A, 234B, 234C and fee of Rs.10,000/- u/s.234F of the Act, totaling to Rs.4,64,062/- on 25.05.2022 after deducting TDS of Rs.25,632/- from rental income. The assessee filed an updated return u/s.139(8A) of the Act on 31.10.2022 and claims that Form ITR 3 was not enabled for filing before that date. The assessee contends that the CPC has computed interest u/s.234A of the Act till 31.10.2022 (date of filing the updated return) instead of till 25.05.2022 (date of payment of tax) and has charged additional tax u/s.140B(3)(ii) of the Act at the rate of 50% instead of 25%, leading to the demand of Rs.3,15,733/-. Aggrieved with the intimation issued u/s.143(1) of the Act dated 27.12.2023, the assessee filed an appeal before the CIT(A), who dismissed the appeal by holding as under:

5.2.1 The assessee has contended that the additional tax u/s 140B(3) should not have been charged at 50% as the forms for filing updated returns in ITR 3 were enabled only 31.10.2022, whereas forms for ITR 1 and 4 were enabled earlier on 12.07.2022. Additionally, the appellant argues that the additional tax should have been charged at 25% as this was the first year of implementation of the updated return scheme, making it impossible for the delay to exceed two years.

5.2.2 Section 140B (3) of the Act clearly prescribes two rates of additional tax: 25% if the updated return is filed before completion of twelve months from the end of the relevant assessment year, and 50% if filed thereafter but before twenty-four months, For AY 2020-21, the assessment year ended on 31.03,2021, The appellant filed the updated return 31.10.2022, which is beyond twelve months from 31.03.2021, making the 50% rate applicable as per Section 140B (3))

5.23 The practical difficulties regarding availability of forms, w