Business Park Builders Pvt. Ltd., New Delhi V. ACIT, New Delhi

ITA 5510/DEL/2013

• Counselvise Citation: 551020114 RSA 2013
• Duration Of Justice: 1 year(s) 1 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-11-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 08-09-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 09-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A MISRA
• Assessee Lawyers: V S RASTOGI
• Keywords: Rectification of order; Revised return
• Section: 143(3); 153A; 234B; 147; 148; 54; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: A NEW DELHI BEFORE SMT DIVA SINGH, JUDICIAL MEMBER AND SH. T.S.KAPOOR, ACCOUNTANT MEMBER I.T.A .NO. - 5510/ DEL/201 3 (ASSESSMENT YEAR - 2007 - 08 ) BUSINESS PARK BUILDERS PVT. LTD. M - 11, MIDDLE CIRCLE, CONNAUGHT CIRCUS, NEW DELHI - 110001. PAN - AABCB8672P (APPELLANT) VS ACIT, CENTRAL CIRCLE - 23, NEW DELHI (RESPONDENT) APPELLANT BY V.S.RASTOGI, CA RESPONDENT BY SMT. A.MISRA, CIT DR ORDER PER DIVA SINGH, JM TH IS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 07 . 0 6 .201 3 OF THE CIT(A) - XX XI II, NEW DELHI PERTAINING TO 200 7 - 08 ASSESSMENT YEAR ON THE FOLLOWING GROUNDS: - 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE CIT(A) ERRED IN SUSTAINING THE ORDER PASSED BY ASSESSING OFFICER WHEREBY INTEREST CHARGED U/S 234B WAS INCREASED BY INVOKING THE PROVISIONS OF SECTION 154 OF THE INCOME TAX ACT. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN REJECTING THE APPELLANT S CONTENTION THAT THERE WAS NO MISTAKE IN CHARGING THE INTEREST BY THE AO U/S 234B WHICH WAS APPARENT FROM RECORD AND WHICH COULD BE RECTIFIED U/S 154 OF THE INCOME TAX ACT. 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A ERRED IN MISR EADING AND MISCONSTRUING THE JUDGEMENT OF THE HON BLE KARNATAKA HIGH COURT IN THE CASE OF VIJAY KUMAR SABOO (HUF) AND ANOTHER VS. ACIT, BANGLORE DECIDED ON 18.07.2011 IN ITA NO. - 65 & 66 OF 2005 CITED BEFORE HIM, WHICH WAS SQUARELY APPLICABLE IN FAVOUR OF T HE APPELLANT. 4. THAT THE ORDERS PASSED BY THE ASSESSING OFFICER AND CIT(A) ARE BAD IN LAW AND VOID AB - INITIO. 5. THE APPELLANT CRAVES PERMISSION TO ADD, AMEND, ALTER OR VARY ALL OR ANY GROUNDS OF APPEAL ON OR BEFORE THE DATE OF HEARING OF THE APPEAL. 2 I.T.A .NO. - 5510 /DE L/201 3 2. THE S HORT ISSUE IN THE PRESENT APPEAL IS WHETHER THE IMPUGNED ORDER UPHOLDING THE RECTIFICATION ORDER DATED 23.03.2012 IS AN ORDER WHICH IS TO BE UPHELD ON FACTS AND LAW OR NOT. FOR THE SAID PURPOSE WE EXTRACT THE RELEVANT FACTS AND CIRCUMSTANCES OF THE CASE A S ARE EM A NAT I N G FROM THE RECTIFICATION ORDER ITSELF AS UNDER: - 1. ASSESSMENT IN THIS CASE WAS COMPLETED U/S 153A/143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED THE ACT) ON 29.12.2009. SUBSEQUENTLY, ON PERUSAL OF THE RECORDS, IT WAS NOTICED THAT U/S 234B HAS BEEN SHORT CHARGED. AS PER SECTION 234B(1) OF THE ACT, INTEREST U/S 234B IS TO BE CHARGED FROM 1 ST DAY OF ASSESSMENT YEAR (I.E 1 - 4 - 2007 IN THE PRESENT CASE) TO THE DATE OF ASSESSMENT U/S 153A (I.E 29.12.2009 IN THE PRESENT CASE) OF THE ACT, WHEREAS INTEREST HAD NOT BEEN CHARGED FOR THIS ENTIRE PERIOD IN THE CASE OF ASSESSEE. 2. THEREFORE, TO RECTIFY THIS MISTAKE WHICH WAS APPARENT FROM RECORD A NOTICE U/S 154/155 WAS ISSUED TO THE ASSESSEE ON 21.02.2012, THEREBY GIVING IT IN OPPORTUNITY TO FILE ITS SUBMISSIONS/OBJECTIONS, IF ANY, ON 27/02/2012 AT 11.30 AM, IN RESPECT OF THE PROPOSED RECTIFICATION OF MISTAKE APPARENT FROM RECORD, ON ACCOUNT OF SHORT CHARGE OF INTEREST U/S 234B OF THE ACT IN ITS CASE. 2.1 . IN RESPONSE THERETO THE ASSESSEE IS TO FOUND TO HAVE MADE THE FOLLOWING WRITTEN SUBMISSIONS: - 1. THIS IS WITH REFERENCE TO NOTICE U/S 154/155 OF INCOME TAX ACT, 1961 DATED 21.2.2012, REGARDING THE REVISION OF INTEREST SHORT CHARGED UNDER SECTION 234B(1) OF INCOME TAX ACT, 1961 FOR 29 MONTHS AS AG AINST CHARGEABLE FOR 45 MONTHS. 1.1 .AS PER PROVISIONS OF LAW IN CASE OF REASSESSMENT OR RE - COMPUTATION U/S 147 OR U/S 153 - A, THE INTEREST U/S 234 - B IS TO BE CHARGED FOLLOWING THE DATE OF DETERMINATION OF TOTAL INCOME UNDER SECTION 143(1) OR 143(3) TO THE DATE OF DETERMINATION OF INCOME UNDER SECTION 147 OR 153A OF INCOME TAX ACT, 1961. AS IN THE CASE OF ASSESSEE, INCOME WAS FIRST DETERMINED UNDER SECTION 143(1) AND AGAIN ASSESSMENT IS COMPLETED IN DECEMBER 2009 UNDER SECTION 153 - A OF INCOME TAX ACT, 1961 AND RE - COMPUTATION IS DONE, THE PROVISIONS OF SECTION 234 - B(3) ARE APPLICABLE IN INSTANT CASE. ACCORDINGLY, AS PER PROVISIONS OF LAW AS CONTAINED IN 234 - B(3), THE INTEREST IS CORRECTLY LEVIED BY THE ASSESSING OFFICER FROM THE DATE OF EARLIER DETERMIN ATION OF INCOME U/S 143(1) ON 21.10.2008 (WHICH IS ALSO SPECIFICALLY MENTIONED IN THE ITNS 150 ATTACHED WITH ASSESSMENT ORDER) TO TILL DECEMBER 2009 I.E. THE DATE OF DETERMINATION OF INCOME U/S 153A OF INCOME TAX ACT, 1961. 3 I.T.A .NO. - 5510 /DE L/201 3 1.2. ACCORDINGLY, THERE IS NO M ISTAKE IN CHARGING INTEREST UNDER SECTION 234 - B OF INCOME TAX ACT, 1961. 2.2 . HOWEVER THE ABOVE EXPLANATION WAS NOT ACCEPTED BY THE ASSESSING OFFICER WHO HELD AS UNDER: - 5.1. ON PERUSAL OF ABOVE PROVISIONS IT IS SEEN THAT AS PER SUBSECTION (1) OF SECTION 234B OF THE ACT IN CASE OF DEFAULT IN PAYMENT OF ADVANCE TAX DURING ANY FINANCIAL YEAR, INTEREST IS TO BE CALCULATED FOR THE PERIOD STARTING FROM 1 ST DAY OF APRIL NEST FOLLOWI NG SUCH FINANCIAL YEAR TO THE DATE OF DETERMINATION OF TOTAL INCOME U/S 143(1) AND WHERE A REGULAR ASSESSMENT IS MADE TO THE DATE OF SUCH ASSESSMENT. THUS IN THE CASES WHERE REGULAR ASSESSMENT IS MADE UNDER SECTION 143(3) OF THE ACT, THEN IN CASE OF DEFAU LT IN PAYMENT OF ADVANCE TAX DURING ANY FINANCIAL YEAR, IN SUCH CASES INTEREST UNDER SECTION 234B OF THE ACT, IS TO BE CALCULATED FOR THE PERIOD STARTING FROM 1 ST DAY OF APRIL NEXT FOLLOWING SUCH FINANCIAL YEAR TO THE DATE OF SUCH REGULAR ASSESSMENT U/S 14 3(3) OF THE ACT. 5.2. FURTHER EXPLANATION 2 TO SUBSECTION (1) OF SECTION 234B OF THE ACT DEFINES THE SCOPE OF REGULAR ASSESSMENT. AS PER THIS EXPLANATION WHERE AN ASSESSMENT IS MADE FOR THE 1 ST TIME U/S 147 OR SECTION 153A OF THE ACT, THEN THE ASSESSMENT SO M ADE SHALL BE REGARDED AS REGULAR ASSESSMENT FOR THE PURPOSE OF THIS SECTION I.E. SECTION 234B. THUS ON THE SAME COROLLARY, IN THE CASES WHERE AN ASSESSMENT IS MADE FOR THE 1 ST TIME U/S 147 OR SECTION 153A OF THE ACT, INTEREST UNDER SECTION 234B IS TO BE C ALCULATED IN THE SAME WAY AS IT IS DONE IN THE CASES IN WHICH REGULAR ASSESSMENT U/S 143(3) OF THE ACT IS DONE. 5.3. IN THE PRESENT CASE, THE ASSESSMENT FOR HT EAY 2007 - 08 WAS MADE FOR THE 1 ST TIME UNDER SECTION 153A OF THE ACT ON 29/12/2009, THEREFORE IN THE CASE OF THE ASSESSEE, THE ASSESSMENT MADE ON 29/12/2009 U/S 153A OF THE ACT FOR THE AY 2007 - 08, IS THE REGULAR ASSESSMENT FOR THE PURPOSE OF SECTION 234B OF THE ACT AND INTEREST PAYABLE ON ACCOUNT OF SHORT FALL IN PAYMENT OF ADVANCE TAX AS PER THE ASSESSED TAX, IN THE CASE OF THE ASSESSEE FOR THE AY 2007 - 08, IS TO BE CALCULATED AS PER THE PROVISIONS OF SECTION 234B(1) OF THE ACT. 5.4. AS FAR AS SUBSECTION (3) OF SECTION 234B IS CONCERNED IT PRO VIDES FOR COMPUTATION OF INTEREST U/S 234B IN THE CASES WHERE AS A RESULT OF AN ORDER OF REASSESSMENT OR RECOMPUTATION U/S 147 OR SECTION 153A OF THE ACT, THE INTEREST LIABILITY OF THE ASSESSEE PAYABLE UNDER SUBSECTION (1) IS INCREASED AND IN SUCH CASES TH E INTEREST IS TO BE CALCULATED FOR THE PERIOD STARTING FORM THE DATE OF SUCH REGULAR ASSESSMENT AND ENDING ON THE DATE OF COMPLETION OF REASSESSMENT OR RECOMPUTATION U/S 147 OR SECTION 153A OF THE ACT I.E. THE INTEREST UNDER SECTION 234B(3) OF THE ACT IS L EVIED ON THE DIFFERENTIAL AMOUNT OF SHORTFALL OF ADVANCE TAX WITH 4 I.T.A .NO. - 5510 /DE L/201 3 REFERENCE TO THE ADVANCE TAX FOUND TO HAVE BEEN PAID IN THE ORIGINAL ASSESSMENT. THEREFORE, THIS SECTION 234B(3) CONTEMPLATES LEVY OF INTEREST IN STAGES AND INTEREST UNDER THIS SECTION COUL D BE LEVIED IN ALL THE CASES OF REASSESSMENTS OR RECOMPILATIONS COMPLETED U/S 147 OR SECTION 153A OF THE ACT AND CLEARLY THE PRESENT CASE DOES NOT FALL WITHIN THE AMBIT OF SUBSECTION (3) OF SECTION 234B OF THE ACT. 5.5. SUBJECT TO DISCUSSION ABOVE, THE INTERES T UNDER SECTION 234B OF THE ACT IN THE CASE OF THE ASSESSEE FOR THE AY 2007 - 08 IS TO BE COMPUTED FOR THE PERIOD STARTING FROM 01/04.2007 AND ENDING ON THE DATE OF REGULAR ASSESSMENT MADE IN THE CASE OF ASSESSEE FOR THE 1 ST TIME U/S 143(3)/153A OF THE ACT O N 29/12/2009, AS PER THE PROVISIONS OF SUBSECTION (1) OF SECTION 234B OF THE ACT. THE REVISED COMPUTATION OF TAX AND INTEREST THEREON IS AS PER THE ITNS 150 ENCLOSED. 3 . AGGRIEVED BY THIS THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A). BEFORE THE CIT(A) , RELIANCE WAS PLACED UPON THE DECISION OF THE KARNATAKA HIGH COURT IN THE CASE OF SHRI VIJAY KUMAR SABOO (HUF) AND OTHERS VS ACIT, BANGLORE SO AS TO CONTEND THAT RECTIFICATION ORDER WAS NOT MAINTAINABLE UNDER LAW. HOWEVER THE CIT(A) REJECTED THE APPEAL H OLDING AS UNDER : - 3.6. FINDINGS : - I HAVE CONSIDERED THE IMPUGNED ORDER PASSED U/S 154, WRITTEN SUBMISSION AND ORAL ARGUMENTS OF LD. AR. I HAVE PERUSED THE SECTION 234B(REPRODUCED IN PARA 3.2 OF THE ORDER). AS PER THE PROVISIONS OF SECTION 234B(1), INTEREST IS CHARGEABLE FROM 1 ST DAY OF APRIL NEXT FOLLOWING SUCH FINANCIAL YEAR TO THE DATE OF DETERMINATION OF TOTAL INCOME UNDER SUB - SECTION (1) OF SECTION 143 AND WHERE REGULAR ASSESSMENT IS MADE, TO THE DATE OF SUCH REGULAR ASSESSMENT. EXPLANATION 2 BE LOW SUBSECTION (1) OF SECTION 234B STATES THAT WHERE, IN RELATION TO AN ASSESSMENT YEAR, 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 PURPOSE OF THIS SE CTION. THEREFORE, BY VIRTUE THIS EXPLANATION, IT IS ABUNDANTLY CLEAR THAT REASSESSMENT U/S 147 FOR THE FIRST TIME OR ASSESSMENT U/S 153A IS REGULAR ASSESSMENT FOR THE PURPOSE OF SUBSECTION (1) OF SECTION 234B. ONCE REASSESSMENT U/S 147 FOR THE FIRST TIME OR ASSESSMENT U/S 153A IS REGARDED AS REGULAR ASSESSMENT, IF SUBSECTION (3) OF SECTION 234 IS READ, IT IS CLEAR THAT THE SAID SUBSECTION (3) IS APPLICABLE FOR REASSESSMENT U/S 147 OR 153A MADE FOR SECOND TIME AND ONWARDS AND NOT FOR THE FIRST TIME, AS FIRS T TIME RE - ASSESSMENT U/S 147 OR ASSESSMENT U/S 153A IS COVERED BY EXPLANATION (2) OF SECTION 234B(1) AS REGULAR ASSESSMENT. I HAVE PERUSED THE ORDER OF HON BLE HIGH COURT OF KARNATAKA CITED SUPRA. IN FACT, THIS VIEW HAS BEEN ACCEPTED BY HON BLE HIGH COURT ALSO 5 I.T.A .NO. - 5510 /DE L/201 3 IN PARA 9 & 10 OF THE ASSESSMENT ORDER. THE SAME IS REPRODUCED AS UNDER: - 9. THAT IS WHAT IS PROVIDED IN SUB - SECTION (3) OF SECTION 234B. IT READS AS UNDER: - WHERE AS A RESULT OF AN ORDER OF REASSESSMENT OR RE - COMPUTATION UNDER SECTION1 47 OR SECTION 153A, THE AMOUNT ON WHICH INTEREST WAS PAYABLE UNDER SUB - SECTION (1) IS INCREASED, 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 COMPRISED IN THE PERIOD COMMENCING ON THE DAY FOLLOWING THE DATE OF DETERMINATION OF TOTAL INCOME UNDER SUB - SECTION (1) OF SECTION 143 AND WHERE A REGULAR ASSESSMENT IS MADE AS IN REFERRED TO IN SUB - SECTION (1) FOLLOWING THE DATE OF SUCH REGULAR ASSESSMENT AND ENDING ON THE DATE OF REASSESSMENT OR RE - COMPUTATION UNDER SECTION1 47 OR SECTION1 53A, ON THE AMOUNT BY WHICH THE TAX ON THE TOTAL INCOME DETERMINED ON THE BASIS OF THE REASSESSMENT OR RE - COMPUTATION EXCEEDS THE TA X ON THE TOTAL INCOME DETERMINED UNDER SUB - SECTION (1) OF SECTION 143 OR ON THE BASIS OF THE REGULAR ASSESSMENT AFORESAID. 10. IF AN ORDER PASSED UNDER SECITON1 47, IS NOT MADE FOR THE FIRST TIME, THE ASSESSMENT IS TREATED AS RE - ASSESSMENT OR RE - COMPUTATI ON MADE UNDER SECTION 147. THEN , THE ASSESSEE SHALL BE LIABLE TO PAY SIMPLE INTEREST AT THE RATE OF 1% FOR EVERY MONTH FROM THE PERIOD COMMENCING ON THE FOLLOWING THE DATE OF DETERMINATION OF TOTAL INCOME UNDER SUB - SECTION (1) OF SECTION 143 AND WHERE A REGULAR ASSESSMENT IS MADE AS REFERRED TO IN SUB SECTION (1) FOLLOWING THE DATE OF SUCH REGULAR ASSESSMENT TILL THE DATE OF RE - ASSESSMENT OR RE - COMPUTATION UNDER SECTION 147, ON THE AMOUNT BY WHICH THE TAX ON THE TOTAL INCOME DETERMINED ON THE BASIS OF RE - ASSESSMENT OR RE - COMPUTATION EXCEEDS THE TAX ON TOTAL INCOME DETERMINED UNDER SUB - SECTION (1) OF SECTION 143 OR ON THE BASIS OF REGULAR ASSESSMENT AFORESAID. CONSIDERING THE ABOVE OBSERVATION OF THE HON BLE HIGH COURT, IT APPEARS THAT HON BLE HIGH COURT HAS NOT GIVEN ANY VERDICT ON EXPLANATION 2 OF SECTION 234B(1) REGARDING ASSESSMENT MADE FOR THE FIRST TIME U/S 153A/153C AS NOT FRESH ASSESSMENT. THEREFORE, IN MY VIEW, TILL EXPLANATION 2 OF SECTION 234B(1) IS ON STATUTE, VIEW CAN NOT BE TAKEN FOR THE FIR ST TIME THAT RE - ASSESSMENT U/S 147 OR ASSESSMENT U/S 153A IS NOT REGULAR ASSESSMENT AND HENCE SECTION 234B(1) IS APPLICABLE. IN VIEW OF THE ABOVE POSITION OF FACTS AND LAW, I DO NOT THINK TWO OPINIONS ARE POSSIBLE. HENCE, THE ACTION FOR INVOKING SECTION 1 54 BEING APPARENT MISTAKE IS HEREBY CONFIRMED. AS A RESULT, THIS GROUND OF APPEAL IS DISMISSED. 6 I.T.A .NO. - 5510 /DE L/201 3 4 . AGGRIEVED BY THIS THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 5 . AT THE TIME OF HEARING THE LD. AR REITERATED THE SUBMISSIONS ADVANCED B EFORE THE AUTHORITIES BELOW. IT WAS SUBMITTED THAT ORDER UNDER SECTION 143(1) WAS ISSUED ON 21.10.2008 AND SECTION 153A IS A RE - ASSESSMENT. REFERRING TO THE IMPUGNED ORDER, IT WAS SUBMITTED THAT WHEN THE ENTIRE DECISION OF THE KARNATAKA HIGH COURT IS R EAD IT WOULD SHOW THAT THE LD. CIT(A) HAS MISDIRECT ED HIMSELF BY WRONGLY QUOTING PARAS 9 AND 10 IN HIS DECISION INSTEAD OF THE RELEVANT PARAS 11 & 12 WHICH OUGHT TO HAVE BEEN CONSIDERED. REFERRING TO THIS IT WAS SUBMITTED THAT THESE PARAS FULLY ADDRESS THE CO NTROVERSY . A S FAR AS THE RECTIFICATION ORDER WAS CONCERNED IT WAS SUBMITTED THAT RECTIFICATION UNDER LAW WAS NOT WARRANTED AS THERE WAS NO APPARENT MISTAKE ON RECORD AND SECONDLY IF AT ALL THE ISSUE ON THIS COUNT IS DECIDED AGAINST THE ASSESSEE THEN ALSO THE IMPUGNED ORDER IS NOT M AINTAINABLE IN THE FACE OF A CONTRARY DECISION OF THE HON BLE HIGH COURT ON THE ISSUE WHICH MAKES THE ISSUE DEBATABLE . THUS EVEN THEN IT TAKES THE ORDER OUT OF WHAT IS PERMISSIBLE UNDER LAW. IT WAS ALSO HIS STAND THAT HE WOULD NOT WANT TO SPECIFICALLY REFER TO THE DECISIONS WHICH ADDRESS THE WELL - SETTLED JUDICIAL PRECEDENT THAT THE SOLE DECISION OF A HIGH COURT IS NECESSARILY BINDING ON THE REVENUE AS WELL AS ON THE TRIBUNAL AND THE COPY OF THESE DECISIONS IT WAS SUBMITTED HAVE BEEN PLACED ON RECORD ON EARLIER OCCASION. HE ALSO RELIED AT THE TIME OF HEARING ON THE WRITTEN SUBMISSIONS FILED ON RECORD AND READ COPIOUSLY THEREFROM. 6 . LD. CIT DR. HEAVILY RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 7 . WE HAVE HEARD THE RIVAL SU BMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS SEEN THAT THE AO VIDE HIS ORDER DATED 29.12.2009 PASSED U/S 143(3)/153(A) CHARGED INTEREST U/S 234B FOR 14 MONTHS INITIALLY. THEREAFTER, THE SAID ORDER WAS RECTIFIED U/S 154 VIDE ORDER DATED 2 3.03.2012 AFTER SHOW - CAUSING THE ASSESSEE. AS A RESULT THEREOF INTEREST WAS CHARGED U/S 234B FOR 33 MONTHS. THE ASSESSEE IS FOUND TO HAVE OBJECTED BEFORE THE AO (LETTER DATED 5 TH MARCH 2012 ON 7 I.T.A .NO. - 5510 /DE L/201 3 RECORD) RELYING UPON THE DECISION OF THE KARNATAKA HIGH COURT IN THE CASE OF SHRI VIJAY KUMAR SABOO (HUF) AND OTHERS VS ACIT, BANGLORE (CITED SUPRA) HOWEVER BOTH THE AO AND THE CIT(A) REJECTED THE ARGUMENTS OF THE ASSESSEE. BEFORE US IT HAS BEEN CANVASSED BY THE LD. AR THAT FIRSTLY THE IMPUGNED ORDER IS NOT MAINTAINABLE AS THE RECTIFICATION IS NOT ON THE BASIS OF ANY MISTAKE APPARENT ON THE FACE OF THE RECORD AND SECONDLY THE AO ERRED IN NOT CONSIDERING THE SAID JUDGEMENT AND THE CIT(A) HA S CONCURRED WITH THE AO S FINDING RELYING UPON PARAS 9 & 10 OF THE SAID JUDGEMENT INSTEAD OF PARAS 11 & 12 WHICH WERE DIRECTLY APPLICABLE. THESE PARAS READ AS UNDER : - 11. A HARMONIOUS READING OF THE ENTIRE PROVISION MAKES IT CLEAR THAT IF NO ADVANCE TAX IS PAID OR WHAT IS PAID IS LESS THAN 90% OF THE ASSESSED TAX THE ASSESSEE IS LIABLE TO PAY INTEREST ON THE DIFFERENCE IN THE TAX. FOR THE PURPOSE OF LEVYING TAX IT IS COMPUTED FROM FIRST DAY OF APRIL NEXT FOL L OWING, TILL THE DATE OF DETERMINATION OF TAX UNDER SUBS ECTION (1) OF SECTION 143 OR FROM THAT DAY TILL THE DATE OF REGULAR ASSESSMENT. IF IN A GIVEN CASE, THERE IS NO DETERMINATION OF TAX UNDER SUBSECTION (1) OF SECTION 143 OR REGULAR ASSESSMENT AND THE ASSESSMENT IS MADE FOR THE FIRST TIME UNDER SECTION 1 47, SUCH ASSESSMENT IS ALSO TREATED AS A REGULAR ASSESSMENT AND INTEREST IS PAYABLE FROM THE FIRST DAY OF APRIL NEXT FOL L OWING TILL THE DATE OF ASSESSMENT ORDER. BUT IF PROCEEDINGS UNDER SECTION 147 IS INITIATED IN A CASE WHERE THERE IS DETERMINATION OF TAX UNDER SUBSECTION (1) OF SECTION 143 OR WHERE A REGULAR ASSESSMENT ORDER IS PASSED UNDER SUBSECTION (3) OF SECTION 143, THEN, THE ORDER PASSED UNDER SECTION 147 IS TREATED AS AN ORDER OF REASSESSMENT OR RECOMPUTATION. IN THE CASE OF ORDER OF REASSESSMENT OR RECOMPUTATION, THE INTEREST IS LEVIABLE NOT FROM T HE FIRST DAY OF APRIL NEXT FOLL OWING, BUT FROM THE DATE OF DETERMINATION OF TAX UNDER SUBSECTION (1) OF SECTION 148 OR ORDER OF REGULAR ASSESSMENT UNDER SECTION 143(8). THEREFOR E WHEN THE ASSESSMENT ORDER IS PASSED UNDER SECTION 147 AND THAT IS MADE THE BASIS FOR LEVYING INTEREST, THE ASSESSING AUTHORITY HAS TO FIND OUT WHETHER IT IS AN ORDER MADE FOR THE FIRST TIME UNDER SECTION 147 OR IS IT A EASE OF REASSESSMENT OR RECOMPU TATION UNDER SECTION 147. DEPENDING ON THAT FINDING, THE INTEREST IS TO BE CALCULATED EITHER FROM THE DATE OF FIRST DAY OF APRIL NEXT FOLL OWING SUCH FINANCIAL YEAR OR FROM THE DATE OF DETERMINATION OF TAX UNDER SUBSECTION (1) OF SECTION 143 OR REGULAR ASSESSMENT UNDER SECTION 143(3). 12. IN THE INSTANT CASE, THERE WAS A DETERMI NATION OF TAX UNDER SECTION 143(1)(A) AND RETURN FILED BY THE ASSESSEE DECLARING HIS INCOME AS RS. 30,590 WAS ACCEPTED BY THE DEPARTMENT BY ITS ORDER DATED 24 - 6 - 1991. IT IS THEREAFTER, PROCEEDINGS WERE INITIATED UNDER SECTION 147 OF 8 I.T.A .NO. - 5510 /DE L/201 3 THE ACT. IN PURSUANCE OF THE NOTICE ISSUED, REVISED RETURN WAS FILED ON 30 - 12 - 1993 DECLARING THE INCOME OF RS.1,50,590. IT IS ON THAT RETURN, THE ORDER CAME TO BE PASSED UNDER SECTI ON 143(3) ON 28 - 1 - 1994, THEREFORE, IT IS NOT A CASE OF ASSESSMENT MADE FOR THE FIRST TIME. IT IS A CASE OF ORDER OF REASSESSMENT OR RECOMPUTATION UNDER SECTION 147. THEREFORE, THE INTEREST IS TO BE CALCULATED FROM 24.6.1991, THE DATE ON WHICH DETERMINATI ON OF TAX WAS MADE UNDER SECTION 143(1)(A) OF THE ACT. TO THAT EXTENT, THE ORDER PASSED BY THE AUTHORITIES IS ILLEGAL AND REQUIRES TO BE SET ASIDE. HENCE THE SUBSTANTIAL QUESTIONS OF LAW (2) AND (4) ARE ANSWERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE R EVENUE. APPEALS ARE PARTLY ALLOWED. 7.1 . IT HAS ALSO BEEN ARGUED THAT IN THE MATTER WHERE TWO VIEWS ARE POSSIBLE, ONE AD VANCED BY THE AO AND THE OTHER A S CONSIDERED BY THE HON BLE KARANATAKA HIGH COURT. TH IS FACT MAKES THE ISSUE DEBATABLE AND IN SUCH C IRCUMSTANCES ALSO AS PER JUDICIAL PRECEDENT RECTIFICATION U/S 154 HAS WRONGLY BEEN CARRIED OUT. CONSIDERING THE MATERIAL AVAILABLE ON RECORD IN THE LIGHT OF THE ABOVE ARGUMENTS AND THE DECISION REFERRED TO BEFORE US FOR OUR CONSIDERATION, WE ARE OF THE VIEW THAT IN THE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE, THE IMPUGNED ORDER IS NOT CORRECT AND THE RECTIFICATION UPHELD THEREBY IS NOT MAINTAINABLE AS THE SAME IS BEYOND THE PURVIEW OF WHAT CAN BE RECTIFIED U/S 154 OF THE ACT. BEING SATISFIED BY THE EXPLANATION OFFERED THE GROUNDS RAISED BY THE ASSESSEE IS ALLOWED. 8 . IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED . THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 1 4 T H OF NOVEMBER 2014. S D / - S D / - ( T.S.KAPOOR ) (DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 1 4 / 1 1 /2014 *AMIT KUMAR * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI