Ramesh Chander Aggarwal, Chandigarh V. ITO, Chandigarh

ITA 521/CHANDI/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6658 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 6 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-11-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2004-2005
• Appeal Filed On: 06-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Keywords: Rectification of order
• Section: 143(3); 234B; 147; 154

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, B CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER & MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO. 521/CHD/2016 ASSESSMENT YEAR: 2004-05 SH. RAMESH CHANDER AGGARWAL, VS. THE ITO, WARD 2( 1), PROP ZOREX INDIA INDUSTRIES, CHANDIGARH CHANDIGARH PAN NO. AANPA6092P (APPELLANT) (RESPONDENT) APPELLANT BY : SH. JASPAL SHARMA RESPONDENT BY : SH. MANJIT SINGH DATE OF HEARING : 28.08.2017 DATE OF PRONOUNCEMENT : 15.11.2017 ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER DATED 29.02.2016 OF THE COMMISSIONER OF INCOM E TAX (APPEALS) [HEREINAFTER REFERRED TO AS CIT(A)]-1, CHANDIGARH. 2. THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF APPE AL:- 1. THE IMPUGNED ORDER IS BOTH AGAINST FACTS AND ERRONE OUS IN LAW. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT (APPEALS) HAS ERRED IN HAVING CONFIRMED THE ORDER O F THE LD. AO PASSED U/S 154 IN CHARGING INTEREST U/S 234A AND IN ENHANCING INTEREST U/S 234B OF THE INCOME TAX A CT, THE 2 ISSUE BEING DEBATABLE, AND THEREFORE OUTSIDE THE PU RVIEW OF SECTION 154. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT (APPEALS) HAS ERRED IN HAVING CONFIRMED THE ORDER O F THE LD. AO PASSED U/S 154 WHICH IS ILLEGAL AND WITHOUT JURISDICTION. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT (APPEALS) HAS ERRED IN HAVING CONFIRMED THE ORDER O F THE LD. AO EVEN THOUGH THERE WAS NO ANY SATISFACTION OR DIRECTION TO CHARGE INTEREST U/S 23 4A IN THE ASSESSMENT ORDER. 5. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT (APPEALS) HAS ERRED IN HAVING HELD THAT THE ASSESSM ENT U/S 143(3)/147 MADE ON 18.11.2010 WAS A REGULAR ASSESSM ENT AND THEREFORE THE APPELLANT WAS LIABLE TO PAY INTER EST U/S 234B OF THE INCOME TAX ACT FROM THE FIRST DAY OF AP RIL NEXT FOLLOWING SUCH FINANCIAL YEAR I.E. 01.04.2004 TO THE DATE OF PASSING OF REGULAR ASSESSMENT MADE FOR THE FIRST TIME U/S 143(3)/147 ON 18.11.2010. 3. THE BRIEF FACTS OF THE CASE ARE THAT RETURN OF I NCOME FILED BY ASSESSEE WAS ORIGINALLY PROCESSED U/S 143(1) OF THE ACT. TH EREAFTER, THE ASSESSMENT WAS REOPENED U/S 147 OF THE ACT AND WAS COMPLETED V IDE ORDER DATED 18.11.2010. SUBSEQUENT TO THE ASSESSMENT ORDER, A N OTICE U/S 154 OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT') WAS ISSU ED TO THE ASSESSEE CALLING FOR THE OBJECTIONS OF THE ASSESSEE WHICH READS AS U NDER:- (I) THE NECESSARY RECTIFICATION AS PER ITEM (A) MAY KINDLY BE MADE. THE ASSESSEE HAS NO OBJECTION TO THE SAME. (II) AS REGARDS CHARGING OF INTEREST U/S 234B IN TH E CASE OF REASSESSMENT U/S 147 IS CONCERNED, YOUR HONOUR KIND 3 ATTENTION IS INVITED TO THE PROVISIONS OF SECTION 2 34B (3) WHICH CLEARLY PROVIDES THAT INTEREST U/S 234B CAN B E CHARGED FROM THE DATE OF THE ORDER U/S 143(1) TILL THE DATE OF REASSESSMENT U/S 147 ON THE ADDITIONAL DEMAND CR EATED AGAINST THE ASSESSEE. (III) AS REGARDS THE NON-CHARGING OF INTEREST U/S 2 34A IS CONCERNED, NO SUCH DIRECTION HAS BEEN PROVIDED IN T HE ORDER TO CHARGE SUCH INTEREST FROM THE ASSESSEE. UN LESS AND UNTIL AS SEPARATE DIRECTION IS GIVEN IN THE ORD ER TO CHARGE SUCH INTEREST, NO SUCH INTEREST CAN BE NOW C HARGED U/S 154. 4. THE ASSESSEE FILED HIS NO OBJECTION REGARDING RE CTIFICATION ON REBATE U/S 88. SO FAR AS THE NON-CHARGING OF INTEREST U/S 234A WAS CONCERNED, THE ASSESSEE OBJECTED TO THE SAME STATING THAT NO SUCH DIRECTION HAD BEEN GIVEN IN THE ASSESSMENT ORDER BY THE ITO. REGARDING WRONG CHARGING OF INTEREST U/S 234B OF THE ACT, THE ASSESSEE OBJECTED TO THE S AME STATING THAT INTEREST OUGHT TO CHARGEABLE U/S 234B SHOULD HAVE BEEN CHARG ED FROM THE DATE WHEN THE RETURN WAS PROCESSED U/S 143(1) AND NOT FROM 1. 4.2004 IN VIEW OF EXPLANATION 3 TO SECTION 234B (1) OF THE ACT. 5. THE ASSESSING OFFICER, HOWEVER, DID NOT AGREE WI TH THE ABOVE CONTENTION OF THE ASSESSEE. HE OBSERVED THAT THE AS SESSEE WAS LIABLE TO PAY INTEREST U/S 234A AS HE HAD FILED THE RETURN LATE F ROM THE DUE DATE OF FILING OF THE RETURN AND THE CHARGING OF INTEREST U/S 234A WAS MANDATORY IN THIS RESPECT. SO FAR AS THE CHARGING OF INTEREST U/S 234 B WAS CONCERNED, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSMENT IN T HIS CASE U/S 143(3) READ WITH SECTION 147 WAS DONE FOR THE FIRST TIME, HENCE , IT WAS A REGULAR ASSESSMENT AND NOT RE-ASSESSMENT, THEREFORE, THE IN TEREST WAS CHARGEABLE FROM 1.4.2004 TILL THE DATE OF ASSESSMENT AND NOT F ROM 1.4.2005. BEING 4 AGGRIEVED BY THE ABOVE ORDER OF THE ASSESSING OFFIC ER, THE ASSESSEE UNSUCCESSFULLY CONTESTED THE APPEAL BEFORE THE LD. CIT(A). 6. BEFORE US, LD. AR OF THE ASSESSEE HAS SUBMITTED THAT THE ISSUE REGARDING CHARGING OF INTEREST U/S 234A AND 234B WA S A DEBATABLE ISSUE AND THAT THE ASSESSING OFFICER WAS NOT ENTITLED TO RECTIFY THE ORDER AS THE SAME CANNOT BE SAID TO BE A MISTAKE APPARENT ON REC ORD. HE OTHERWISE HAS ALSO RELIED UPON THE DECISION OF THE HON'BLE KARN ATAKA HIGH COURT IN THE CASE OF SRI VIJAY KUMAR SABOO (HUF) VS ACIT [2011 ] 12 TAXMAN.COM 322 (KAR.), WHEREIN THE HON'BLE HIGH COURT HAS HEL D THAT WHEN ASSESSMENT ORDER IS PASSED U/S 147 AND THAT IS MADE BASIS FOR LEVYING OF INTEREST, IF THERE WAS DETERMINATION OF TAX U/S 143(1) OR WHERE REGULAR ASSESSMENT ORDER PASSED U/S 143(3) OF THE ACT, THEN ORDER PASS ED U/S 147 OF THE ACT IS TREATED AS AN ORDER OF REASSESSMENT OR RECOMPUTATIO N. 7. THE LD. DR, ON THE OTHER HAND, HAS RELIED UPON T HE FINDINGS OF THE LOWER AUTHORITIES. 8. WE HAVE HEARD THE RIVAL CONTENTIONS. SO FAR AS T HE CHARGING OF INTEREST U/S 234A IS CONCERNED, WE AGREE WITH THE F INDINGS OF THE LOWER AUTHORITIES THAT THE CHARGING OF INTEREST U/S 234A WAS MANDATORY AND NO SEPARATE FINDINGS OF THE ASSESSING OFFICER WAS REQU IRED. THE RELIANCE IN THIS RESPECT IS PLACED ON THE DECISION OF THE HON'B LE SUPREME COURT OF INDIA IN THE CASE OF CIT VS. BHAGAT CONSTRUCTION C O. (P) LTD. [2015] 60 TAXMANN.COM 334(SC). SO FAR AS THE CHARGING OF INT EREST U/S 234B IS CONCERNED, WE FIND FORCE IN THE CONTENTION OF THE L D. AR. EVEN OTHERWISE, THE ISSUE IS DEBATABLE AS THE SAME DOES NOT CONSTIT UTE A MISTAKE APPARENT ON RECORD. THE ASSESSING OFFICER WAS NOT SUPPOSED TO A MEND THE ORDER IN 5 RESPECT OF LEVY OF INTEREST U/S 234B OF THE ACT UND ER THE GARB OF THE PROVISIONS OF SECTION 154 OF THE ACT. IN VIEW OF T HIS, THE RECTIFICATION OF THE ORDER SO FAR AS THE LEVY OF INTEREST U/S 234A I S CONCERNED, THE ISSUE IS DECIDED IN FAVOUR OF THE REVENUE AND THE FINDINGS O F THE LOWER AUTHORITIES IN THIS RESPECT ARE UPHELD. SO FAR AS CHARGING OF I NTEREST U/S 234B IS CONCERNED, THE ISSUE IS DECIDED IN FAVOUR OF THE AS SESSEE HOLDING THE SAME BEING A DEBATABLE ISSUE, THE RECTIFICATION ORDER IN THIS RESPECT IS ILLEGAL, THEREFORE, THE ORDER OF THE LOWER AUTHORITIES ON TH IS ISSUE IS SET ASIDE. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TRE ATED AS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 15.11.2017 SD/- SD/- ( ANNAPURNA GUPTA) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 15 TH NOV., 2017 RKK COPY TO: 2. THE APPELLANT 3. THE RESPONDENT 4. THE CIT 5. THE CIT(A) 6. THE DR