Satish Katoch, Palampur V. ITO, Palampur

ITA 298/CHANDI/2017

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 0687 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 9 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-11-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Next Hearing Date: 30-08-2018
• Assessment Year: 2000-2001
• Appeal Filed On: 13-02-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Assessee Lawyers: NONEWRITTEN SUBMISSION
• Keywords: Unexplained investment; Search and seizure; Revised return; Reassessment proceedings
• Section: 143(3); 153A; 234B; 147; 148; 154

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH B, CHANDIGARH , !'# $' % & , '( BEFORE: SHRI SANJAY GARG, JM & SMT.ANNAPURNA GUPTA, AM ./ ITA NO.298/CHD/2017 / ASSESSMENT YEAR : 2000-01 SH.SATISH KATOCH, VILL. BHAWARNA, TEH. PALAMPUR. THE INCOME TAX OFFICER, PALAMPUR. ./PAN NO: AHUPK5215C /APPELLANT /RESPONDENT /ASSESSEE BY : NONE(WRITTEN SUBMISSION) ! / REVENUE BY : SHRI MANJIT SINGH, SR.DR '# $ /DATE OF HEARING : 30.08.2018 %&'(# /DATE OF PRONOUNCEMENT: 26.11.2018 ') /ORDER PER ANNAPURNA GUPTA, AM : THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-1, AMRITSAR CAMP AT PALAMPUR (IN SHORT CI T(A) DATED 3.11.2016 PASSED U/S 250 (6) OF THE INCOME TA X ACT, 1961 (IN SHORT REFERRED TO AS ACT). 2. THE SOLE ISSUE IN THE PRESENT APPEAL RELATES TO CHARGING OF INTEREST U/S 234B OF THE ACT FOR NON PA YMENT OF ADVANCE TAX. 3. BRIEF FACTS RELATING TO THE CASE ARE THAT THE AS SESSEE HAD FILED ITS RETURN OF INCOME DECLARING AN INCOME OF RS.1,48,150/- WHICH WAS PROCESSED U/S 143(1) OF THE ACT ITA NO.132/CHD/2016 A.Y.2007-08 2 AND NO INTEREST U/S 234B WAS CHARGED. LATER ON THE CASE OF THE ASSESSEE WAS REOPENED U/S 148 OF THE ACT MAKING ADDITION TO THE RETURNED INCOME OF THE ASSESSEE OF RS.4 LACS AND THUS ASSESSING THE TAXABLE INCOME AT RS.5,48,15 0/-. CONSEQUENTLY INTEREST U/S 234B OF THE ACT AMOUNTING TO RS.92,937/- FOR NON PAYMENT OF ADVANCE TAX WAS CHAR GED VIDE THE ASSESSMENT ORDER DATED 27.3.2006. THE ASSE SSEE FILED A PETITION BEFORE THE A.O. U/S 154 OF THE ACT AGAINST THE CHARGING OF INTEREST U/S 234B OF THE ACT, WHICH WAS DISMISSED BY THE A.O. VIDE ORDER DATED 30.7.2009. A GGRIEVED BY THE SAME THE ASSESSEE WENT IN APPEAL BEFORE THE CIT (A) WHO UPHELD THE ORDER OF THE ASSESSING OFFICER STATI NG THAT THE INTEREST HAS BEEN CHARGED CORRECTLY AS PER THE PROVISIONS OF LAW. THE FINDINGS OF THE CIT (A) AT PARA 6 OF HI S ORDER ARE AS UNDER: 6. I HAVE GONE THROUGH THE ORDER OF THE AO, THE GRO UNDS OF APPEAL AND THE SUBMISSION. THE APPEAL HAS BEEN FILED AGAINST THE ORDER PASSED BY THE AO U/S 154 FOR THE A.Y. 2000-01. ASSESSE E'S CONTENTION IS THAT THE AO HAS WRONGLY CHARGED THE IN TEREST U/S 234B OF THE INCOME TAX ACT AT THE TIME OF ASSESSMENT ORDER FRAMED U/S 143(3)/147 VIDE ORDER DATED 27.03.2006 AN D THEREFORE NO INTEREST IS CHARGEABLE U/S 234B IN REASSESSMENT PROCEEDINGS AS NO INTEREST WAS CHARGED IN THE ASSESSMENT FRAMED U/S 143(1) FOR THE SAID YEAR. SECTION 234B SAYS AS UNDER; (1) SUBJECT TO THE OTHER PROVISIONS OF THIS SECTION WHERE, IN ANY FINANCIAL YEAR, AN ASSESSEE WHO IS LIABLE TO PAY ADVAN CE TAX UNDER SECTION 208 HAS FAILED TO PAY SUCH TAX OR, WH ERE THE ADVANCE TAX PAID BY SUCH ASSESSEE UNDER THE PROVISIONS OF SECTION 210 IS LESS THAN NINETY PER CENT OF THE ASSESS ED TAX, THE ASSESSEE SHAL1 BE LIABLE TO PAY SIMPLE INTEREST AT THE RATE OF [ONE] PER CENT FOR EVERY MONTH OR PART OF A MONTH C OMPRISED IN THE PERIOD FROM THE 1ST DAY OF APRIL NEXT FOLLOWING SUCH FINANCIAL YEAR &L[TO THE DATE OF DETERMINATION OF TOTAL INCOM E UNDER SUB- SECTION (1) OF SECTION 143 [AND WHERE A REGULAR ASS ESSMENT IS MADE, TO THE DATE OF SUCH REGULAR ASSESSMENT, ON AN A MOUNT]] EQUAL TO THE ASSESSED TAX OR, AS THE CASE MAY BE, O N THE ITA NO.132/CHD/2016 A.Y.2007-08 3 AMOUNT BY WHICH THE ADVANCE TAX PAID AS AFORESAID FA LLS SHORT OF THE ASSESSED TAX. EXPLANATION 2.WHERE, IN RELATION TO AN ASSESSMENT YEAR, AN ASSESSMENT IS MADE FOR THE FIRST TIME UNDER SECTI ON 147 /OR SECTION 153A], THE ASSESSMENT SO MADE SHALL BE REGARDED AS A REGULAR ASSESSMENT FOR THE PURPOSES O F THIS SECTION. (2) WHERE, BEFORE THE DATE OF & [DETERMINATION OF TOT AL INCOME UNDER SUB-SECTION (1) OF SECTION 143 OR] COMP LETION OF A REGULAR ASSESSMENT, TAX IS PAID BY THE ASSESSEE U NDER SECTION 140A OR OTHERWISE, (I) INTEREST SHALL BE CALCULATED IN ACCORDANCE WITH THE FOREGOING PROVISIONS OF THIS SECTION UP TO THE DATE ON WHICH THE TAX IS SO PAID, AND REDUCED BY THE INTEREST, IF ANY, PAID UNDER SECTION 140A TOWARDS THE INTEREST CHARGEABLE 'UNDER THIS SECTION; (II) THEREAFTER, INTEREST SHALL BE CALCULATED AT THE RATE AFORESAID ON THE AMOUNT BY WHICH THE TAX SO PAID TOGETHER WIT H THE ADVANCE TAX PAID FALLS SHORT OF THE ASSESSED TAX.. [EXPLANATION 3.IN EXPLANATION 1 AND IN, SUB-SECTION ( 3) 'TAX. ON THE TOTAL INCOME DETERMINED UNDER SUB-SECTI ON (1) OF SECTION 143' SHALL NOT INCLUDE THE ADDITIONAL INCOME-TAX , IF ANY, PAYABLE UNDER SECTION 143.] (3) WHERE, AS A RESULT OF AN ORDER OF R EASSESSMENT OR RECOMPUTATION UNDER SECTION 147 OR SECTION 153A THE AMOUNT ON WHICH INTEREST WAS PAYABLE UNDER SECTION (1) IS INCREASED, THE ASSESSEE SHALL BE LIABLE TO PAY S IMPLE INTEREST AT THE RATE OF [ONE] PER CENT FOR EVERY MO NTH OR PART OF A MONTH COMPRISED IN THE PERIOD COMMENCING ON THE DAY FOLLOWING THE DATE OF DETERMINATION OF TOTAL INCOME U NDER SUB- SECTION (1) OF SECTION 143 [AND WHERE A REGULAR ASS ESSMENT IS MADE AS IS REFERRED TO IN SUB-SECTION (1) FOLLOWING T HE DATE OF SUCH REGULAR ASSESSMENT]] AND ENDING ON THE DATE OF THE REASSESSMENT OR RECOMPUTATION UNDER SECTION 147 [OR SECTION 153A], ON THE AMOUNT BY WHICH THE TAX ON THE TOTAL I NCOME DETERMINED ON THE BASIS OF THE REASSESSMENT' OR RECOMPUTATION EXCEEDS THE TAX ON THE TOTAL INCOME DETERMINED [UNDER SUB-SECTION (1) OF SECTION 143 OR] ON THE BASIS OF THE REGULAR ASSESSMENT AFORESAID.' A PLAIN READING OF THIS SECTION CLEARLY SHOWS THAT INTEREST U/S 234B HAS TO BE CHARGED ON THE INCREASED TAX LIAB ILITY TO THE DATED OF REASSESSMENT. ASSESSEE'S CONTENTION THAT IF NO' INTEREST HAS BEEN CHARGED U/S 143(1) OR REGULAR ASSESSMENT, THAN INTE REST CANNOT BE CHARGED U/S 234B IS NOT CORRECT AND HENCE REJECTED. EXPLANATION 2 TO SECTION 234B(1J CLEARLY SAYS THAT 'WHERE IN RELATION TO AN ASSESSMENT YEAR, AN ASSESSMENT IS MADE FOR ITA NO.132/CHD/2016 A.Y.2007-08 4 THE 1 ST TIME UNDER SECTION 147, THE ASSESSMENT SO MADE SHALL BE REPORTED AS REGULAR ASSESSMENT FOR THE PUR POSE OF THIS SECTION' THE CASE LAW QUOTED BY THE ASSESSEE IS NOT APPLICABL E AS FACTS ARE DIFFERENT IN THIS CASE, SO THE AO HAS RIG HTLY REJECTED IT. 5. AGGRIEVED BY THE SAME, THE ASSESSEE HAS COME UP IN APPEAL BEFORE US RAISING FOLLOWING GROUNDS: 1. THE ORDER OF THE LEARNED CLT (A) IS AGAINST LA W & FACT. 2. THAT THE LEARNED CIT (A) WRONGLY REJECTED THE APPE AL OF APPELLANT AND IGNORED THE FACT THAT NO INTEREST UNDER SECTION 234B CAN BE CHARGED UNDER SECTION 147 AFTER THE ASSESSMENT FRAMED UNDER SECTION 143(L)(A), 143(3) OR 144 OF THE ACT. 3. THAT THE LEARNED ITO WAS NOT JUSTIFIED IN NOT FOLLOWING THE JUDGMENT OF THE HONORABLE ITAT CHANDIGARH REPORTED AS M/S KANGRA BAJRI COMPANY AND ANOTHER VS ASSISTANT CIT PALAMPUR (2003}2Q ST REPOR T 368 (ITAT CHANDIGARH) ON THE ISSUE INVOLVED. 4. THAT IT IS BRAD THAT THE ORDER OF THE LEARNED CIT APPEAL MAY BE QUASHED AND INTEREST CHARGED UNDER SECTION 234B AMOUNTING TO RS.92937/- MAY BE REMITTED AND REFUNDED TO THE APPELLANT. 6. DURING THE COURSE OF HEARING BEFORE US NONE APPE ARED ON BEHALF OF THE ASSESSEE, BUT IT WAS NOTED THAT TH E ASSESSEE HAD FILED SUBMISSIONS IN WRITING ALONGWITH PAPER BO OK ON 24-10-17 AND HAD REQUESTED THAT THE APPEAL BE DISPO SED OFF ON THE BASIS OF THE SAME, VIDE AN APPLICATION DATED 01/04/18 .IN VIEW OF THE SAME THE HEARING OF THE A PPEAL WAS PROCEEDED WITH. 7. ON GOING THROUGH THE SUBMISIONS, WE FIND THAT TH E SOLE CONTENTION RAISED BY THE ASSESSEE WAS THAT INTEREST IN THE PRESENT CASE WAS LEVIABLE AS PER THE PROVISIONS OF SECTION 234B (3) OF THE ACT SINCE THE SAID SUB SECTION AUT HORIZED MODIFICATION OF INTEREST IF MADE IN AN ASSESSMENT FRAMED ITA NO.132/CHD/2016 A.Y.2007-08 5 U/S 147 OF THE ACT, WHICH IS THE FACT IN THE PRESEN T CASE. IT WAS CONTENDED THAT AS PER THE SAID SUB SECTION, IN CASE OF RE-ASSESSMENT MADE UNDER SECTION 147 OF THE ACT, IN TEREST UNDER SECTION 234B WAS IMPOSABLE ONLY IF THE AMOUNT ON WHICH INTEREST WAS PAYABLE UNDER SECTION 234B(1), W AS INCREASED. IN OTHER WORDS, IT WAS CONTENDED, IF NO INTEREST WAS PAYABLE UNDER SECTION 234B(1) AT ALL, ANY INTER EST LEVIABLE THEREAFTER COULD NOT BE TERMED AS INCREAS E AND NO INTEREST. THUS, COULD BE IMPOSED UNDER SECTION 234B (3). THE CONTENTION OF THE ASSESSEE WAS THAT SINCE IN THE PR ESENT CASE NO INTEREST WAS PAYABLE AS PER INTIMATION MADE UNDE R SECTION 143(1) OF THE ACT, NO INTEREST, THEREFORE, WAS LEVIABLE AS PER SECTION 234B(3) OF THE ACT. THE ASSESSEE REL IED UPON THE DECISION OF THE MUMBAI BENCH OF THE I.T.A.T. IN THE CASE OF DATAMATICS LTD. VS. ACIT REPORTED IN 111 TTJ (MU M) 55. A COPY OF THE ORDER WAS PLACED BEFORE US. 8. THE LD. D.R., ON THE OTHER HAND, RELIED UPON HEA VILY ON THE ORDERS OF THE AUTHORITIES BELOW STATING THAT TH E PROVISIONS OF SECTION 234B WERE CLEAR AND EVEN AS P ER SECTION 234B(3) INTEREST HAD TO BE CHARGED ON THE I NCREASED TAX LIABILITY UPTO THE DATE OF RE-ASSESSMENT. 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE ORDERS OF AUTHORITIES BELOW AND ALSO GONE THROUGH T HE CASE LAW CITED BEFORE US. THE ISSUE BEFORE US RELATES TO LEVY OF INTEREST FOR DEFAULT/SHORTFALL IN PAYMENT OF ADVANC E TAX AS PER THE PROVISIONS OF SECTION 234B OF THE ACT. THE FACTS NECESSARY FOR ADJUDICATING THE ISSUE AND WHICH ARE NOT ITA NO.132/CHD/2016 A.Y.2007-08 6 DISPUTED ALSO ARE THAT INITIALLY AN INTIMATION UNDE R SECTION 143(1) HAD BEEN MADE IN THE PRESENT CASE, ACCEPTING THE RETURNED INCOME OF THE ASSESSEE OF RS.1,48,150/- AN D CHARGING NO INTEREST UNDER SECTION 234B OF THE ACT. LATER ON ASSESSMENT UNDER SECTION 147/148 OF THE ACT WAS MAD E MAKING ADDITION TO THE INCOME OF THE ASSESSEE OF RS .4 LACS ON ACCOUNT OF UNEXPLAINED INVESTMENT AS PARTNER IN M/S TRILOK SINGH & COMPANY. AS A CONSEQUENCE THEREOF, T HERE RESULTED A LIABILITY FOR PAYMENT OF ADVANCE TAX, WH ICH HAVING NOT BEEN PAID, INTEREST UNDER SECTION 234B WAS LEV IED IN THE ORDER PASSED UNDER SECTION 148. THERE IS NO DISPUTE REGARDING THE ABOVE FACTS. 10. FOR ADJUDICATING THE ISSUE IT IS NECESSARY TO R EPRODUCE SECTION 234B AS APPLICABLE FOR THE IMPUGNED YEAR; 234B(1): SUBJECT TO THE OTHER PROVISIONS OF THIS SEC TION WHERE, IN ANY FINANCIAL YEAR, AN ASSESSEE WHO IS LIABLE TO PAY ADVANCE TAX UNDER SECTION 208 HAS FAILED TO PAY SUC H TAX OR, WHERE THE ADVANCE TAX PAID BY SUCH ASSESSEE UNDER TH E PROVISIONS OF SECTION 210 IS LESS THAN NINETY PER CENT OF THE ASSESSED TAX, THE ASSESSEE SHAL1 BE LIABLE TO PAY S IMPLE INTEREST AT THE RATE OF [ONE] PER CENT FOR EVERY MONTH OR PART OF A MONTH COMPRISED IN THE PERIOD FROM THE 1ST DAY OF APRIL NEXT FOLLOWING SUCH FINANCIAL YEAR &L[TO THE DATE OF DET ERMINATION OF TOTAL INCOME UNDER SUB-SECTION (1) OF SECTION 143 [AN D WHERE A REGULAR ASSESSMENT IS MADE, TO THE DATE OF SUCH REGU LAR ASSESSMENT, ON AN AMOUNT]] EQUAL TO THE ASSESSED TA X OR, AS THE CASE MAY BE, ON THE AMOUNT BY WHICH THE ADVANCE TAX PAID AS AFORESAID FALLS SHORT OF THE ASSESSED TAX. EXPLANATION 1 : IN THIS SECTION, 'ASSESSED TAX' MEANS THE TAX ON THE TOTAL INCOME DETERMINED UNDER SUBSECTION (1) O F SECTION 143 OR ON REGULAR ASSESSMENT AS REDUCED BY THE AMOU NT OF TAX DEDUCTED OR COLLECTED AT SOURCE IN ACCORDANCE WITH THE PROVISIONS OF CHAPTER XVII ON ANY INCOME WHICH IS S UBJECT TO SUCH DEDUCTION OR COLLECTION AND WHICH IS TAKEN INTO AC COUNT IN COMPUTING SUCH TOTAL INCOME. EXPLANATION 2.WHERE, IN RELATION TO AN ASSESSMENT YEAR, AN ASSESSMENT IS MADE FOR THE FIRST TIME UNDER SECTI ON 147 /OR SECTION 153A], THE ASSESSMENT SO MADE SHALL BE ITA NO.132/CHD/2016 A.Y.2007-08 7 REGARDED AS A REGULAR ASSESSMENT FOR THE PURPOSES O F THIS SECTION. (2) WHERE, BEFORE THE DATE OF & [DETERMINATION OF TOT AL INCOME UNDER SUB-SECTION (1) OF SECTION 143 OR] COMP LETION OF A REGULAR ASSESSMENT, TAX IS PAID BY THE ASSESSEE U NDER SECTION 140A OR OTHERWISE, (I) INTEREST SHALL BE CALCULATED IN ACCORDANCE WITH THE FOREGOING PROVISIONS OF THIS SECTION UP TO THE DATE ON WHICH THE TAX IS SO PAID, AND REDUCED BY THE INTEREST, IF ANY, PAID UNDER SECTION 140A TOWARDS THE INTEREST CHARGEABLE 'UNDER THIS SECTION; (II) THEREAFTER, INTEREST SHALL BE CALCULATED AT THE RATE AFORESAID ON THE AMOUNT BY WHICH THE TAX SO PAID TOGETHER WIT H THE ADVANCE TAX PAID FALLS SHORT OF THE ASSESSED TAX.. [EXPLANATION 3.IN EXPLANATION 1 AND IN, SUB-SECTION ( 3) 'TAX. ON THE TOTAL INCOME DETERMINED UNDER SUB-SECTI ON (1) OF SECTION 143' SHALL NOT INCLUDE THE ADDITIONAL INCOME-TAX , IF ANY, PAYABLE UNDER SECTION 143.] (3) WHERE, AS A RESULT OF AN ORDER OF R EASSESSMENT OR RECOMPUTATION UNDER SECTION 147 OR SECTION 153A THE AMOUNT ON WHICH INTEREST WAS PAYABLE UNDER SECTION (1) IS INCREASED, THE ASSESSEE SHALL BE LIABLE TO PAY S IMPLE INTEREST AT THE RATE OF [ONE] PER CENT FOR EVERY MO NTH OR PART OF A MONTH COMPRISED IN THE PERIOD COMMENCING ON THE DAY FOLLOWING THE DATE OF DETERMINATION OF TOTAL INCOME U NDER SUB- SECTION (1) OF SECTION 143 [AND WHERE A REGULAR ASS ESSMENT IS MADE AS IS REFERRED TO IN SUB-SECTION (1) FOLLOWING T HE DATE OF SUCH REGULAR ASSESSMENT]] AND ENDING ON THE DATE OF THE REASSESSMENT OR RECOMPUTATION UNDER SECTION 147 [OR SECTION 153A], ON THE AMOUNT BY WHICH THE TAX ON THE TOTAL I NCOME DETERMINED ON THE BASIS OF THE REASSESSMENT' OR RECOMPUTATION EXCEEDS THE TAX ON THE TOTAL INCOME DETERMINED [UNDER SUB-SECTION (1) OF SECTION 143 OR] ON THE BASIS OF THE REGULAR ASSESSMENT AFORESAID.' 11. ON GOING THROUGH THE ABOVE, WE FIND THAT AS P ER THE PROVISIONS OF SECTION 234B(1) READ WITH EXPLANATION -2, WHERE AN ASSESSEE WHO IS LIABLE TO PAY ADVANCE TAX BUT HA S NOT PAID THE SAME OR THE AMOUNT SO PAID IS LESS THAN 90 % OF THE ASSESSED TAX, HE SHALL BE LIABLE TO PAY INTEREST ON THE SHORTFALL AT THE PRESCRIBED RATE, FOR THE PERIOD BE GINNING FROM FIRST DAY OF APRIL FOLLOWING THE FINANCIAL YE AR TO WHICH THE INCOME RELATES UP TO THE DAY OF DETERMINATION O F INCOME ITA NO.132/CHD/2016 A.Y.2007-08 8 UNDER SECTION 143(1) OF THE ACT AND WHERE A REGULAR ASSESSMENT IS MADE TO THE DATE OF SUCH REGULAR ASSE SSMENT. FURTHER WHERE AN ASSESSMENT IS MADE FOR THE FIRST T IME UNDER SECTION 147 OF THE ACT IT SHALL BE REGARDED A S REGULAR ASSESSMENT FOR THE PURPOSE OF THIS SECTION. 12. IN THE PRESENT CASE, THE LIABILITY TO PAY INTER EST AROSE ON ACCOUNT OF ADDITION MADE U/S 147 OF THE ACT ,BUT SINCE INTIMATION UNDER SECTION 143(1) HAD BEEN MADE INITI ALLY, THE REASSESSMENT IN THE PRESENT CASE CANNOT BE TREATED AS ASSESSMENT MADE FOR THE FIRST TIME FOR THE PURPOSES OF TREATING IT A REGULAR ASSESSMENT AS PER EXPLANATION 2 TO SECTION 234B(1) .THEREFORE, IN THE PRESENT CASE INT EREST IS NOT LEVIABLE UNDER SECTION 234B(1) OF THE ACT READ WITH EXPLANATION-2. 13. COMING TO SUB-SECTION 3 OF SECTION 234B, WE FIN D THAT THE SAID SECTION DEALS WITH CASES WHERE INITIALLY E ITHER INTIMATION HAS BEEN MADE U/S 143(1) OR REGULAR ASSE SSMENT DONE AND THEREAFTER IN REASSESSMENT THE INTEREST L IABILITY IS INCREASED ON ACCOUNT OF ADDITIONS MADE TO THE INCOM E OF ASSESSES. IN SUCH CIRCUMSTANCES ,THE SUB SECTION ST ATES, THAT THE PERIOD FOR LEVY OF INTEREST WOULD BE FROM THE DATE OF INTIMATION INITIALLY MADE UNDER SECTION 143(1) OF T HE ACT OR PASSING OF INITIAL REGULAR ASSESSMENT ORDER, TO THE DATE OF RE- ASSESSMENT FRAMED, ON THE ADDITIONAL/INCREASED ADV ANCE TAX PAYABLE ON ACCOUNT OF THE ADDITIONAL INCOME S O ASSESSED. ITA NO.132/CHD/2016 A.Y.2007-08 9 14. IN THE PRESENT CASE, SINCE THE ASSESSEES INCOM E HAD BEEN INITIALLY DETERMINED UNDER SECTION 143(1), THE LEVY OF INTEREST UNDER SECTION 234B WAS TO BE DETERMINED AS PER PROVISIONS OF SECTION 234B(3) ON ACCOUNT OF ADDITIO N MADE TO THE INCOME OF THE ASSESSEE ON RE-ASSESSMENT OF INCO ME UNDER SECTION 147 OF THE ACT. AND SINCE ON ACCOUNT OF THE RE- ASSESSMENT THE ASSESSEE WAS, UNDISPUTEDLY, LIABLE T O PAY ADVANCE TAX AS PER THE RELEVANT PROVISIONS, WHICH W AS NOT PAID BY THE ASSESSEE, THE LIABILITY TO PAY THE SAME STOOD INCREASED AND INTEREST UNDER SECTION 234B HAD TO BE MANDATORILY PAID. IT MAY BE POINTED OUT THAT PAYMEN T OF INTEREST U/S 234B ,IS MANDATORY ONCE THE DEFAULT OC CURS .SUB-SECTION (1) AND (3) ONLY LAY DOWN THE MANNER O F CALCULATING THE QUANTUM OF INTEREST PAYABLE. IN SUB SECTION (1) , THE SAME IS PAYABLE ON THE SHORTFALL OF THE A DVANCE TAX FOR THE PERIOD AS BEGINNING FROM THE END OF THE FIN ANCIAL YEAR TO THE DATE OF INTIMATION U/S 143(1) OR REGULAR ASS ESSMENT .AND IN CASE OF REASSESSMENT ,UNDER SUB SECTION 3,O N THE EXCESS ADVANCE TAX PAYABLE ON ACCOUNT OF REASSESSME NT, FROM THE DATE OF INTIMATION US 143(1) OR REGULAR AS SESSMENT TO THE DATE OF ORDER PASSED U/S 147. THE WORDS USED IN SUB SECTION 3 TO SECTION 234B THE AMOUNT ON WHICH INTE REST WAS PAYABLE IN RESPECT OF SHORTFALL IN PAYMENT OF ADVAN CE IS INCREASED CANNOT BE READ TO MEAN THAT ONLY IF INIT IALLY THERE WAS A LIABILITY TO PAY ADVANCE TAX, THERE SHALL BE TREATED TO BE AN INCREASE ON ACCOUNT OF ADDITION MADE ON REASSESSMENT U/S 147. THERE NEED NOT BE AN INITIA L LIABILITY TO PAY OF INTEREST UNDER SECTION 234B OF THE ACT, F OR THERE TO ITA NO.132/CHD/2016 A.Y.2007-08 10 BE AN INCREASE IN THE SAID LIABILITY AND THE INTERE ST LIABILITY CAN BE SAID TO HAVE INCREASED EVEN IF INITIALLY THE RE IS NO LIABILITY TO PAY INTEREST AS PER DETERMINATION OF I NCOME UNDER SECTION 143(1) AND ON REGULAR ASSESSMENT AND THE LI ABILITY AROSE ON ACCOUNT OF THE DETERMINATION OF INCOME IN THE RE- ASSESSMENT PROCEEDINGS. AT THE COST OF REPETITION I T IS STATED THAT THE CHARGE OF INTEREST U/S 234B IS MANDATORY O NCE THE DEFAULT OCCURS AND THERE IS NO ESCAPE FROM THE SAME . LOGICALLY ALSO IT MAKES NO SENSE WHY INTEREST SHOUL D BE LEVIED ONLY IF INITIALLY THERE EXISTED A LIABILITY TO PAY WHICH STOOD INCREASED ON ACCOUNT OF ADDITIONS MADE ON REASSESSMENT,WHEN OTHERWISE THE ASSESSEE IS LIABLE TO PAY THE SAME AND WOULD HAVE BEEN LIABLE IN CASE THE INC OME WAS ADDED IN REGULAR ASSESSMENT ,AS PER SECTION 234B(1) ,OR WOULD HAVE BEEN LIABLE TO PAY IF INITIALLY THERE EX ISTED A LIABILITY. THERE APPEARS NO REASON TO EXCLUDE CASES WHERE INITIALLY THERE EXISTED NO LIABILITY TO PAY ADVANCE TAX ,FROM CHARGING THE SAME IN REASSESSMENT PROCEEDINGS. AND SUCH AN INTERPRETATION WOULD ONLY LEAD TO AN ABSURDITY. THE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE TO THIS EFFECT IS THEREFORE DISMISSED AS TOTALLY DEVOID OF ANY ME RITS. THE RELIANCE PLACED BY THE ASSESSEE ON THE JUDGMENT OF THE I.T.A.T. MUMBAI BENCH IN THE CASE OF DATAMATICS LTD . (SUPRA) IS, WE FIND MISPLACED SINCE IT WAS RENDERED ON DIFFERENT SET OF FACTS. IN THE FACTS OF THAT CASE, THE ASSESSEE HAD INITIALLY PAID SURPLUS TAX WHICH WAS REFUNDED I N THE INTIMATION MADE UNDER SECTION 143(1)(A) OF THE ACT, AND NO INTEREST WAS THEREFORE PAYABLE UNDER SECTION 234B IN TERMS ITA NO.132/CHD/2016 A.Y.2007-08 11 OF THE INTIMATION UNDER SECTION 143(1) OF THE ACT. IT WAS ONLY SUBSEQUENTLY WHEN ADDITION WAS MADE ON REASSESSMENT MADE U/S 147, THAT INTEREST WAS CHARGED U/S 234B OF THE ACT. IN THE BACKGROUND OF THESE FACTS THE I.T.A.T. HELD THAT WHEN THE ASSESSEE HAD INITIALLY PAID HUGE AMOUNT OF TAXES, GENERATING REFUND, IT COULD NOT BE SAID THAT THE AS SESSEE HAD DEFAULTED IN PAYMENT OF ADVANCE TAX LATER ON, ON AS SESSMENT. THE HON'BLE BENCH RELIED UPON THE JUDGMENT OF THE H ON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. K.K. MARKET ING IN THIS REGARD. THE ITAT ALSO FOUND THAT THE ADDITION MADE COULD NOT HAVE POSSIBLY BEEN ANTICIPATED BY THE ASS ESSEE FOR THE PURPOSES OF CALCULATING ADVANCE TAX, SINCE IT W AS A DISPUTED ISSUE WITH DIFFERENT VIEWS BEING TAKEN BY DIFFERENT COURTS AND THE ASSESSEE THEREFORE COULD NOT BE HELD TO BE A DEFAULTER FOR PAYMENT OF ADVANCE TAX. THE I.T.A.T. HELD THAT CHARGING OF INTEREST UNDER SECTION 234B IS MANDATOR Y ONLY WHEN CONDITIONS ARE FULFILLED OF THE ASSESSEE HAVIN G DEFAULTED IN THE PAYMENT OF ADVANCE TAX, FOR WHICH PURPOSE THE ASSESSEE HAS TO ESTIMATE HIS CURRENT INCOME AND IF A BONAFIDE DISPUTE IS PENDING WHICH IS CLARIFIED LATE R ON BY THE LEGISLATURE WHICH THE ASSESSEE COULD NOT HAVE ANTI CIPATED AND ON ACCOUNT OF WHICH THE ADDITION IS MADE TO HIS INCOME ON REOPENING, IT IS DIFFICULT TO HOLD SUCH AN ASSES SEE AS A DEFAULTER. THE I.T.A.T. HELD THAT IF THE ASSESSEE TAKES DUE DILIGENCE AND CARE AND MAKES THE PAYMENT AND THE SA ME IS ACCEPTED BY THE REVENUE SUCH AN ASSESSEE CANNOT BE HELD AS A DEFAULTER ONLY BECAUSE SUBSEQUENTLY THE ASSESSEE S INCOME HAS BEEN ENHANCED AND THE IMPOSITION OF INTEREST UN DER ITA NO.132/CHD/2016 A.Y.2007-08 12 SUCH CIRCUMSTANCES WAS HELD NOT JUSTIFIED THE RELEV ANT FINDINGS OF THE I.T.A.T. IN THIS REGARD ARE AS UNDE R: 47. IN THE CASE OF CIT V. K.K. MARKETING, THE HON' BLE DELHI HIGH COURT HELD THAT IN A CASE WHERE THE REVE NUE ACCEPTED THE RETURN FILED BY THE ASSESSEE AND IN FA CT IT WAS FOUND THAT THEY WERE ENTITLED TO A REFUND, WHIC H WAS MORE THAN THE AMOUNT OF CASH THAT WAS SEIZED, THERE IS NO JUSTIFICATION IN CHARGING INTEREST UNDER SECTION S 234B AND 234C AND IT WOULD BE APPROPRIATE NOT TO CHARGE INTEREST FROM THE ASSESSEE. THIS WAS A CASE, WHEREI N THERE WAS A SEARCH AND SEIZURE ACTION IN THE PREMIS ES OF THE ASSESSEE AND DURING THE SEARCH ACTION HUGE AMOU NT OF CASH WAS RECOVERED AND SO, WHEN THE PAYMENT OF ADVANCE TAX BECAME DUE IN SEPTEMBER, 1993, THE ASSESSEE REQUESTED THE DEPARTMENT TO ADJUST THE CAS H SEIZED TOWARDS ADVANCE TAX. WHILE PASSING THE ASSESSMENT ORDER UNDER SECTION 143(L)(A),IT WAS HEL D THAT THE ASSESSEE WAS ENTITLED TO A REFUND. AO, HOWEVER, CHARGED INTEREST FROM THE ASSESSEE UNDER SECTIONS 2 34B AND 234C. THE HON'BLE DELHI HIGH COURT HELD THAT TH ERE WAS NO JUSTIFICATION. 48. COMING TO THE INSTANT CASE OF THE ASSESSEE, IT IS NOT DISPUTED THAT THE ASSESSEE RECEIVED A HUGE REFU ND AS A RESULT OF PROCESSING OF THE RETURN UNDER SECTI ON 143(L)(A). SUBSEQUENTLY, THE TAX COMPONENT WAS ENHA NCED AS A RESULT OF THE REASSESSMENT DONE UNDER SECTION 143(3) R/W SECTION 147.ASSUCH,THEDECISION OF THE HO N'BLE DELHI HIGH COURT IN THE CASE OF CIT V. K.K. MARKETI NG (SUPRA)IS APPLICABLE ON FACTS. 49. IN THE CASE OF BALAKRISHNA BREEDING FARMS (P) LT D. V. CHIEF CIT, THE HON'BLE KARNATAKA HIGH COURT, IN THE FOLLOWING CIRCUMSTANCES, HELD THAT INTEREST CANNOT BE CHARGED UNDER SECTION 234B: ASSESSEE, ENGAGED IN THE BUSINESS OF HATCHERY, CLAI MED DEDUCTION UNDER SECTIONS 80HHA AND 80-1 FOR THE ASST. YRS. 1993-94 TO 1995-96 AND 1997-98. THE CLAIM WAS BASED O N THE DECISION OF THE JURISDICTIONAL HIGH COURT. SUBS EQUENTLY, THE HON'BLE SUPREME COURT REVERSED THE JUDGMENT OF THE JURISDICTIONAL HIGH COURT, WHEREIN IT WAS HELD THAT UNITS ENGAGED IN POULTRY FARMING OR HATCHERIES DID NOT MAN UFACTURE ANY ARTICLE OR THING AND THEY WERE NOT ENTITLED TO DEDUCTION UNDER SECTIONS 80HHA AND 80-1. AO ISSUED NOTICE UND ER SECTION 148. ON RECEIPT OF THE NOTICE, ASSESSEE DEP OSITED ALL THE TAX PAYABLE. ASSESSMENT WAS COMPLETED AND INTEREST WAS CHARGED UNDER SECTION 234B. ASSESSEE APPROACHED THE C HIEF CIT WITH WAIVER PETITION AND THE CHIEF CIT WAIVED T HE INTEREST PARTLY. ON APPEAL, THEIR LORDSHIPS OF THE HON'BLE KA RNATAKA HIGH COURT HELD 'THAT THERE IS NO PROVISION IN THE A CT REQUIRING THE ASSESSEE TO FILE A REVISED RETURN OF INCOME IN REGARD TO THE RELEVANT ASSESSMENT YEARS AFTER THE SUPREME COURT H AD ITA NO.132/CHD/2016 A.Y.2007-08 13 REVERSED THE JUDGMENT OF THE HIGH COURT. IT WAS FOR THE AO TO ISSUE A NOTICE UNDER SECTION 148 TO ASSESS THE ESCA PED INCOME. NOTICE UNDER SECTION 148 WAS ISSUED TO THE ASSESSEE ONLY ON 27TH DEC, 2000, AND THE ASSESSEE FILED ITS REVISED RETURNS WITHIN THE TIME ALLOWED BY THAT NOTICE AND THE ASSESSMENTS WERE COMPLETED. THE TAX THAT BECAME DUE IN TERMS OF THE REVISED RETURNS HAD ALSO BEEN PAID WITHIN TIME AND THUS NO DELAY COULD BE ATTRIBUTED TO THE ASSESSEE. THE CHIEF CIT SHOULD HAVE WAIVED THE ENTIRE INTEREST THAT WAS LEVIED BY THE AO. THE ORDER OF THE SINGLE JUDGE AFFIRMING THAT OF THE CHIEF CIT COULD NOT BE SUSTAINED. THUS, THE INTEREST LEVIED ON THE ASSESSE E UNDER SECTION 234B WAS WAIVED. 50. COMING TO THE INSTANT CASE, THERE IS NO DEFAULT ON THE PART OF THE ASSESSEE IN PAYING THE ADVANCE TAX. FOR THE FIRST TIME THE DISPUTE AROSE CONSEQUENT TO THE REASSESSMENT DONE U NDER SECTION 143(3) R/W SECTION 147. THE STAND OF THE REV ENUE IS THAT CHARGING OF INTEREST UNDER SECTION 234B IS MAN DATORY. MANDATORY DOES NOT MEAN THAT IT IS MANDATORY UNDER A LL CIRCUMSTANCES,. IT IS MANDATORY WHEN THE CONDITIONS ARE FULFILLED. THE CONDITION IS THAT THE ASSESSEE SHOUL D HAVE DEFAULTED. IF THE ASSESSEE HAS NOT ANTICIPATED REOP ENING OR THE ASSESSEE HAS NOT ANTICIPATED A SUPERIOR COURT DECIS ION, WHICH GOES AGAINST THE ASSESSEE, IT IS DIFFICULT TO HOLD THAT SUCH AN ASSESSEE IS A DEFAULTER. IF THE ASSESSEE TAKES DUE DILIGENCE AND CARE AND MAKES THE PAYMENT AND IF IT IS ACCEPTED BY THE REVENUE, SUCH AN ASSESSEE CANNOT BE HELD AS A DEFAULTER ONLY BECAUSE SUBSEQUENTLY THE ASSESS EE'S INCOME HAS BEEN ENHANCED. 51. IN THE CASE OF CIT V. SEDCO FOREX INTERNATIONA L DRILLING CO. LTD. (UTTARANCHAL), THE HON'BLE U'TTARANCHAL HIGH COURT H ELD THAT WHERE THERE EXIST A BONA FIDE DISPUTE, IMPOSITION O F INTEREST UNDER SECTION 234B WAS NOT JUSTIFIED WITHOUT A HEAR ING AND WITHOUT REASONS. IN OTHER WORDS, IF THERE ARE CONFLICT ING VIEWS ON A POINT, BY VIRTUE OF DECISION OF THE TRIBUNAL, HIG H COURT OR SUPREME COURT, IMPOSITION OF INTEREST UNDER SECTION 234B COULD NOT BE JUSTIFIED WITHOUT AFFORDING A HEARING. THE F INDING OF THE HON'BLE HIGH COURT READS AS UNDER: THAT AT THE RELEVANT TIME THERE WERE CONFLICTING DE CISIONS OF THE TRIBUNAL AS TO THE INTERPRETATION OF CONTRACTS REGA RDING ON-PERIOD AND OFF PERIOD SALARY. A BONA FIDE DISPUTE WAS PEND ING. THE ASSESSEE HAD TO ESTIMATE HIS CURRENT INCOME. THE WO RDS USED UNDER SECTION 209(1 )(A) MADE THE ASSESSEE ESTIMATE HIS CURRENT INCOME AND SINCE A BONA FIDE DISPUTE WAS PENDING WH ICH, WAS CLARIFIED BY THE LEGISLATURE BY THE FINANCE ACT, 19 99, IMPOSITION OF INTEREST UNDER SECTION 234B WAS NOT JUSTIFIED WI THOUT A HEARING AND WITHOUT REASONS. 52. THE SAME PRINCIPLE, WE ARE OF THE VIEW, IS APPLICAB LE IN THE INSTANT CASE OF THE ASSESSEE. WHEN THE RETURN W AS PROCESSED UNDER SECTION 143(L)(A), ASSESSEE WAS ENT ITLED FOR REFUND OF FAIRLY LARGE AMOUNT. SUBSEQUENTLY THE ASSE SSMENT WAS REOPENED AND THE LIABILITY OF THE ASSESSEE INCREASE D AS A CONSEQUENCE OF THIS. THE CASE OF THE ASSESSEE IS TH AT, TO CHARGE ITA NO.132/CHD/2016 A.Y.2007-08 14 INTEREST, FIRST OF ALL THERE SHOULD BE A LIABILITY ON THE PART OF THE ASSESSEE AND ASSESSEE SHOULD BE IN DEFAULT. 53. SECTION 234B READS AS UNDER: 234B(1): SUBJECT TO THE OTHER PROVISIONS OF THIS SECTION , WHERE, IN ANY FINANCIAL YEAR, AN ASSESSEE WHO IS LIABLE TO PAY ADVANCE TAX UNDER SECTION 208 HAS FAILED TO PAY SUCH TAX OR , WHERE THE ADVANCE TAX PAID BY SUCH ASSESSEE UNDER THE PROVISI ONS OF SECTION 210 IS LESS THAN NINETY PER CENT OF .THE AS SESSED TAX, THE ASSESSEE SHALL BE LIABLE TO PAY SIMPLE INTEREST AT THE R ATE OF ONE PER CENT FOR EVERY MONTH OR PART OF A MONTH COMPRIS ED IN THE PERIOD FROM THE 1 ST DAY OF APRIL NEXT FOLLOWING SUCH FINANCIAL YEAR TO THE DATE OF DETERMINATION OF TOTAL INCOME U NDER SUB- SECTION (1) OF SECTION 143 AND WHERE A REGULAR ASSE SSMENT IS MADE, TO THE DATE OF SUCH REGULAR ASSESSMENT, ON AN A MOUNT EQUAL TO THE ASSESSED TAX OR, AS THE CASE MAY BE, ON T HE AMOUNT BY WHICH THE ADVANCE TAX PAID AS AFORESAID FA LLS SHORT OF THE ASSESSED TAX. EXPLANATION 1 : IN THIS SECTION, 'ASSESSED TAX' MEANS THE TAX ON THE TOTAL INCOME DETERMINED UNDER SUBSECTION (1) O F SECTION 143 OR ON REGULAR ASSESSMENT AS REDUCED BY THE AMOU NT OF TAX DEDUCTED OR COLLECTED AT SOURCE IN ACCORDANCE WITH THE PROVISIONS OF CHAPTER XVII ON ANY INCOME WHICH IS S UBJECT TO SUCH DEDUCTION OR COLLECTION AND WHICH IS TAKEN INTO AC COUNT IN COMPUTING SUCH TOTAL INCOME. EXPLANATION 2 : WHERE, IN RELATION TO AN ASSESSMENT YEA R, AN ASSESSMENT IS MADE FOR THE FIRST TIME UNDER SECTION 147 OR SECTION 153A, THE ASSESSMENT SO MADE SHALL BE REGARDED AS A REGULAR ASSESSMENT FOR THE PURPOSES OF THIS SECTION. (2)... (3) WHERE, AS A RESULT OF AN ORDER OF REASSESSMENT OR RECOMPUTATION UNDER SECTION 147 OR SECTION 153A, THE AMOUNT ON WHICH INTEREST WAS PAYABLE UNDER SUB-SECTIO N (1) IS INCREASED, THE ASSESSEE SHALL BE LIABLE TO PAY SIMPLE INTEREST AT THE RATE OF ONE PER CENT FOR, EVERY MONT H OR PART OF A MONTH COMPRISED IN THE PERIOD COMMENCING ON THE DAY FOLLOWING THE DATE OF DETERMINATION OF TOTAL INCOME UN DER SUB- SECTION (1) OF SECTION 143 AND WHERE A REGULAR ASSES SMENT IS MADE AS IS REFERRED TO IN SUB-SECTION (1) FOLLOWING T HE DATE OF SUCH REGULAR ASSESSMENT AND ENDING ON THE DATE OF TH E REASSESSMENT OR RECOMPUTATION UNDER SECTION 147 OR SECTION 153A, ON THE AMOUNT BY WHICH THE TAX ON THE TOTAL INC OME DETERMINED ON THE BASIS OF THE REASSESSMENT OR RECOMPUTATION EXCEEDS THE TAX ON THE TOTAL INCOME D ETERMINED UNDER SUB-SECTION (1) OF SECTION 143 OR ON THE BASIS OF THE REGULAR ASSESSMENT AFORESAID.' (4)... 54. PERUSAL OF EXPLN. 2 TO SECTION 234B(1) MAKES IT CLE AR THAT IF AN ASSESSMENT IS MADE UNDER SECTION 147 OR UNDER SECTION ITA NO.132/CHD/2016 A.Y.2007-08 15 153A FOR THE FIRST TIME, THEN THE ASSESSMENT SO MADE SHALL BE REGARDED AS A REGULAR ASSESSMENT FOR THE PURPOSE OF SECTION 234B. IN OTHER WORDS, IN CASE OF AN ASSESSEE WHERE THE ASSESSMENT HAS ALREADY BEEN COMPLETED AND THE R EFUND HAS ALREADY BEEN DONE AS FAR AS THE EXCESS PAYMENT CONCERNED, THE REASSESSMENT DONE SUBSEQUENTLY UNDER SECTION 147 OR SECTION 153A, INTEREST CANNOT BE CHAR GED FOR THE FIRST TIME IF THE ASSESSEE COULD, NOT HAVE ANTICI PATED THE ENHANCEMENT OF INCOME, EVEN IF THE ASSESSEE HAD TAK EN DUE CARE AND DILIGENCE. THIS IS CLEAR FROM THE DECISIONS CITED SUPRA IN THE CASE REPORTED IN (2000) 69 TTJ (DEL)(TM) 859 : (2000) 75 ITD 155 (DEL)(TM) (SUPRA); (SUPRA); (SUPRA) AND CIT V. HYUNDAI HEAVY INDUSTRIES CO. LTD. (UTTARANCHAL). IF T HE CIRCUMSTANCES WERE SUCH THAT IF THE ASSESSEE HAD TA KEN DUE CARE AND DILIGENCE, ASSESSEE WOULD NOT HAVE DEFAULTED IN MAKING ADVANCE TAX UNDER SECTION 206 OR THE PAYMENT OF ADVANCE TAX WOULD NOT HAVE FALLEN 90 PER CENT OF THE ASSES SED TAX AS CONTEMPLATED UNDER SECTION 210, THEN THE ASS ESSEE BECOMES A DEFAULTER. THE DECISIONS CITED SUPRA MAKES IT CLEAR THAT IF THE ASSESSEE COULD NOT HAVE CONTEMPLATED SUC H A SITUATION, CHARGING OF INTEREST UNDER SECTION 234B C ANNOT BE JUSTIFIED. 56. READING OF SECTION 234B(3) MAKES IT CLEAR THAT W HERE, AS A RESULT OF AN ORDER OF REASSESSMENT OR RECOMPUT ATION UNDER SECTION 147 OR SECTION 153A, THE AMOUNT ON WHIC H INTEREST WAS PAYABLE UNDER SUB-SECTION (1) IS INCREA SED, THE ASSESSEE SHALL BE LIABLE TO PAY SIMPLE INTEREST AT T HE RATE OF ONE PER CENT.... THE READING OF THE SECTION FURTHER MAK ES IT CLEAR THAT FIRST OF ALL THERE SHOULD BE A DEFAULT ON T HE PART OF THE ASSESSEE IN THE REGULAR ASSESSMENT AND THE ASSES SEE SHOULD HAVE BEEN HELD LIABLE TO PAY INTEREST UNDER SECTION 234B. IN THAT CASE, IF THERE IS REASSESSMENT OR RECOM PUTATION UNDER SECTION 147 OR SECTION 153 A, THE LIABILITY O F THE ASSESSEE IS INCREASED AND NOT OTHERWISE. 15. IN THE PRESENT CASE,NO TAXES HAD BEEN PAID INIT IALLY BY THE ASSESSEE AND THE ADDITION MADE U/S 147 OF THE A CT WAS ON ACCOUNT OF UNEXPLAINED INVESTMENT MADE BY THE AS SESSEE IN PARTNERSHIP FIRM. THE SAID ADDITION CANNOT BE SA ID TO BE ON ACCOUNT OF AN ISSUE ON WHICH THERE EXISTED A BON AFIDE DISPUTE. THE ASSESSEE THEREFORE WAS LIABLE TO INCLU DE THE SAME WHILE ESTIMATING HIS INCOME FOR PAYMENT OF ADV ANCE TAX AND HAVING NOT DONE SO THE ASSESSEE HAD DEFAULTED I NITIALLY IN THE PAYMENT OF ADVANCE TAX AND WAS THUS LIABLE T O PAY ITA NO.132/CHD/2016 A.Y.2007-08 16 INTEREST WHEN THE SAID AMOUNT WAS ADDED TO HIS INCO ME IN REASSESSMENT PROCEEDINGS AS PER SECTION 234B(3) OF THE ACT. THE ORDER PASSED BY THE LD.CIT (A) IS, THEREFORE, UPHELD. 16. IN EFFECT, THE APPEAL OF THE ASSESSEE IS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- # $' % & (SANJAY GARG ) (ANNAPURNA GUPTA) / JUDICIAL MEMBER '( / ACCOUNTANT MEMBER *# /DATED: 26 TH NOVEMBER, 2018 * ' * &) *+,+ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. - $ / CIT 4. - $ ( )/ THE CIT(A)P 5. +./ 0 , #0 , 123/4 / DR, ITAT, CHANDIGARH 6. /35' / GUARD FILE &) $ / BY ORDER, 6 ! / ASSISTANT REGISTRAR