KAMBATHADIAN MALATHY, MADURAI V. ITO, CORPORATE WARD - 2 (4), MADURAI

ITA 2274/CHNY/2019

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 6246 (ITAT-CHENNAI)
• Duration Of Justice: 3 year(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-08-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 08-08-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 144; 154; 139; 143(3); 234B; 143(1); 72

Judgement Text

आयकर अपीलीय अिधकरण ‘ए’ ायपीठ चे ई म । IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH, CHENNAI माननीय +ी महावीर िसंह, उपा12 एवं माननीय +ी मनोज कु मार अ6वाल ,लेखा सद9 के सम2। BEFORE HON’BLE SHRI MAHAVIR SINGH, VICE PRESIDENT AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM आयकर अपील सं./ ITA No.2272/Chny/2019 (िनधाBरण वषB / Assessment Year: 2010-11) & आयकर अपील सं./ ITA No.2273/Chny/2019 ( िनधाBरण वषB / Assessment Year: 2012-13) & आयकर अपील सं./ ITA No.2274/Chny/2019 (िनधाBरण वषB / Assessment Year: 2013-14) Kambathadian Malathy, Plot No.164,AR Hospital Road, KK Nagar, Madurai – 625 020. बनाम/ V s. ITO, Non Corporate Ward-2(4), Madurai. थायी लेखा सं./जीआइ आर सं./P AN /GI R No . AM LP M-1 9 4 8 -C (अपीलाथ /Appellant) : ( थ / Respondent) अपीलाथ की ओरसे/ Appellant by : Shri S. Sridhar (Advocate) – Ld. AR थ की ओरसे/Respondent by : Shri ARV Sreenivasan (Addl. CIT) –Ld. DR सुनवाई की तारीख/Date of Hearing : 04-08-2022 घोषणा की तारीख /Date of Pronouncement : 17-08-2022 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeals by assessee for Assessment Years (AY) 2010- 11, 2012-13 & 2013-14 arises out of separate orders of Learned First Appellate Authority. However, the facts as well as issues are substantially the same and adjudication in any one year shall be ITA Nos.2272, 2273 & 2274/Chny/2019 - 2 - applicable to the other years also. The grounds taken by the assessee for AY 2010-11 read as under: 1. CIT (APPEAL) failed to appreciate the fact that order under section 154 could be issued only when there is a mistake apparent in the record. 2. CIT (APPEAL) failed to notice that there is no intention of the authority to levy the interest under section 234A of the Act. 3. CIT(APPEAL) failed to appreciate the fact, that was settled in the case of CIT Vs Ranchi Club Limited (247 ITR209(SC)),that in the absence of specific direction to levy of 234A interest, interest cannot be levied. 4. The appellant craves leave to alter, modify, add any additional grounds of appeal during the course of the proceedings. As is evident, the assessee is aggrieved by levy of interest u/s. 234A in rectification order passed u/s 154. 2. The Ld. AR submitted that such a levy could not be made u/s 154. The Ld. AR also submitted that without specific direction, such a levy could not be made. The Ld. AR filed written submissions also. The Ld. Sr. DR, on the other hand submitted that no new interest was levied u/s 154 and only the quantum was rectified. Having heard rival submissions and upon perusal of case records, our adjudication would be as under. 3.1 The assessee was assessed u/s. 143 (3) r.w.s. 147 of the Act on 30.03.2016 wherein the returned income of Rs.1.70 Lacs was determined at Rs.9.76 Lacs. In the income tax computation form dated 30.03.2016, interest u/s. 234A was charged for Rs.2430/-. However, the demand was rectified and order u/s. 154 of the Act was passed on 18.07.2018 wherein the interest u/s. 234A was recomputed as Rs.1,23,944/-. Aggrieved, the assessee preferred further appeal before Ld. CIT(A) who noted the observations made by Ld. AO as under: - 4. The order u/s 154 of the Act has been perused. In the said assessment the Assessing Officer has said that: ITA Nos.2272, 2273 & 2274/Chny/2019 - 3 - "For levying 234A interest on account of delayed filing of ROI for the AY 2010-11 by 51 months. Due date for filling the ROI for the AY 2010-11 is 04.08.2010. Date of filing of ROI by the assessee is 06.10.2014. the fact of delayed filing of ROI was mentioned in the Assessment order dated 30.03.2016. In view of the above reasons this rectification for levy of interest u/s 234A of the IT Act 1961, is done." 3.2 The assessee relied upon the decision of Hon’ble High Court of Patna in the case of CIT vs. Ranchi Club Ltd., [2001; 247 ITR 209 (SC) and pleaded that in the absence of specific directions in the order about levy of interest u/s 234A, interest could not be levied. 3.3 However, the Ld. CIT(A) distinguished the case law and held the issue against the assessee as under: 4.2. The Hon'ble Patna High court, in the case of Ranchi Club vs CIT (1996) 217 ITR 72 (Patna) was dealing with the assessment order for AY 1991-92 relating to levy of Interest u/s 234A of the Act. In that case, the best judgment assessment was completed u/s 144 of the Act after the assessee had filed the Income Tax Return u/s 139 of the Act. The assessee in that case has argued in appeal that the interest u/s 234A of the Act and 234C can be levied only on the tax payable as per the returned income and not on the tax payable on the assessed income. In that case the assessment order did not mention the levy of interest and demand notice did not mention as to under which provision of the Act the interest has been levied. 4.3. In the case of appellant, the re-assessment order clearly mention the delay in filing of return and the demand notice also clearly mention that the interest of Rs.1,23,944/- had been levied u/s 234A of the Act. The facts and the circumstances of the case of the appellant are clearly different from the facts in case of Ranchi Club Ltd which Hon'ble Patna High court was dealing with, which were subsequently confirmed by Hon'ble Supreme Court. 5. U/s 234A of the Act, interest has to be charged for default / delay in furnishing of return and interest has to be determined at 1% for every month/part of month comprised for the period commencing on the date immediately following the due date and where no Income Tax Return is furnished, ending on the date of completion of assessment u/s 144 of the Act on amount of tax on the total income as determined u/s 143(1) of the Act and where regular assessment is made on amount of tax on the total income determined under regular assessment after allowing for the prepaid taxes and allowable credit. The Assessing Officer was therefore well within four corners of law to charge interest u/s 234A of the Act. As, due to oversight, the interest was not charged in the tax computation of order passed u/s 143(3) rws 147 dated 31.03.2016, rectification notice was issued intimating the assessee that interest u/s 234A is required to be levied. After giving due opportunity, the order u/s 154 of the Act was finally passed on 18.07.2018 wherein interest u/s 234A was levied at Rs.1,23,944/-. Admittedly, the assessee has not disputed the quantum of interest charged. The assessee has disputed the chargeability of the interest u/s 234A of the Act. In ITA Nos.2272, 2273 & 2274/Chny/2019 - 4 - view of the above discussions, in my considered opinion under the fact of the case, interest u/s 234A has been correctly charged. In view of the matter, all the grounds are dismissed and the order of the assessing officer is confirmed. Aggrieved, the assessee is in further appeal before us. Our findings and Adjudication 4. We find that Hon’ble Supreme Court in the case of CIT V/s Anjum M.H.Ghaswala (119 Taxman 352; 18.10.2001) has held that a perusal of Sections 234A, 234B and 234C would show that the interest for default in furnishing return of income, default in payment of advance-tax and interest for deferment of advance-tax are mandatory in nature and therefore, Income Tax Settlement Commission (ITSC) was not empowered to reduce or waive interest statutorily payable under Sections 234A, 234B and 234C except to the extent of granting relief under the Circulars issued by the Board under section 119. This being so, there would be no requirement for AO to levy the same specifically in the assessment order. For the same reason, another plea of Ld. AR that debatable issue could not be subject matter of rectification u/s 154, would have no legs to stand. 5. The Ld. AR has relied on the decision of Hon’ble High Court of Patna in Ranchi Club Ltd. V/s CIT (85 Taxman 201). However this decision has rightly been distinguished in the impugned order and we concur with the same. Upon perusal of this decision, we further find that this was the conclusion of Hon’ble Court in para-9 that there was no default in filing the return and payment of self-assessed / advance tax. It was further held that interest was leviable on the tax on the total income 'as declared in the return' and not on the total income as determined. Therefore, this case has no application. ITA Nos.2272, 2273 & 2274/Chny/2019 - 5 - 6. Another decision referred to is the decision of the same court in Uday Mistanna Bhandar & Complex V/s CIT (90 Taxman 500) to support the argument that in the absence of specific directions in the assessment order to levy interest u/s 234A, no such interest could be levied. We find that this case law is also not applicable since in the present case, interest was levied in the original Income Tax Computation Form, the quantum of which was rectified u/s 154 which could certainly be done. The case law of Hon’ble Delhi High Court in CIT V/s Inchcape India Pvt. Ltd. (124 Taxmann.com 744) is also on the same fact and hence, not applicable. 7. Finally, finding no reason to interfere in the impugned orders, we dismiss all the three appeals. 8. All the appeals stand dismissed. Order pronounced on 17 th August, 2022. Sd/- (MAHAVIR SINGH) उपा12 /VICE PRESIDENT Sd/- (MANOJ KUMAR AGGARWAL) लेखा सद9 / ACCOUNTANT MEMBER चे,ई / Chennai; िदनांक / Dated : 17-08-2022 EDN/- आदेश की Vितिलिप अ 6ेिषत/Copy of the Order forwarded to : 1. अपीलाथ /Appellant 2. यथ /Respondent 3. आयकर आयु (अपील)/CIT(A) 4. आयकर आयु /CIT 5. िवभागीय ितिनिध/DR 6. गाड फाईल/GF