JACOB THOMAS,KOZHENCHERRY V. ACIT, THIRUVALLA RANGE, THIRUVALLA

ITA 132/COCH/2024

AI Insights

Jacob Thomas, the appellant, contested the levy of interest under section 234B of the Income Tax Act, 1961, following an assessment for the year 2016-17 where significant additions were made to his declared income. The AO initially did not charge interest in the original assessment but later issued a notice under section 154 to levy interest, which was contested by the appellant on grounds that it was a debatable issue and he was exempt from advance tax as a senior citizen. The CIT(A) upheld the AO's decision, leading to the current appeal. The Tribunal dismissed the appeal, agreeing with the AO that the levy of interest was automatic and mandatory, thus constituting a mistake apparent from the record.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 316003 (ITAT-COCHIN)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-05-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2017-2018
• Other Referred Cases: CIT v. Anjum MH Ghaswala [2001] 119 Taxman 352
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SANJIT KUMAR DAS
• Assessee Lawyers: RAJAKANNAN
• Section: 143(3); 154; 68; 234B; 37(1); 243B

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH BEFORE SHRI INTURI RAMA RAO, AM AND SHRI SOUNDARARAJAN K., JM ITA No. 132/Coch/2024 Assessment Year: 2016-17 Jacob Thomas .......... Appellant 1, Mulamoottil, Kozhencherry 689641 [PAN: ACKPT3269L] vs. ACIT, Ward-1 & TPS, Thiruvalla .......... Respondent Appellant by: Shri Rajakannan, Advocate Respondent by: Shri Sanjit Kumar Das, CIT-DR Date of Hearing: 20.03.2025 Date of Pronouncement: 14.05.2025 O R D E R Per: Inturi Rama Rao, AM This appeal filed by the assessee is directed against the order of the National Faceless Appeal Centre, Delhi [CIT(A)], dated 27.12.2023 for Assessment Year (AY) 2016-17. 2. Brief facts of the case are that the appellant is an individual. The return of income for AY 2016-17 was filed on 17.10.2016 declaring income of Rs. 37,97,390/-. Against the said return of income, the assessment was completed by the ACIT, Ward -1, Thriuvalla (hereinafter called \"the AO\") vide order dated 21.12.2018 2 ITA No. 132/Coch/2024 Jacob Thomas passed u/s. 143(3) of the Income Tax Act, 1961 (the Act) at a total income of Rs. 5,42,39,544/-. While doing so, the AO made disallowance of Rs. 5,04,42,154/- u/s. 37 and 68 of the Act. While completing the assessment the AO had not charged interest u/s. 234B of the Act and determined the tax liability. Therefore, the AO issued notice u/s. 154 of the Act dated 26.08.2019 proposing to levy interest u/s. 234B of the Act. In response to the notice u/s. 154 the appellant submitted that the disparity between the declared income and assessed income was on account of addition made u/s. 37(1) of the Act which are subject matter of appeal before the CIT(A). It is submitted that since senior citizens are exempt from payment of advance tax, therefore no liability to pay advance tax in terms of provisions of section 207(2) of the Act. On due consideration of the above submissions, the AO held that since he is having income from business or profession, additions to the returned income were made under the head ‘profits and gains of business’ the appellant is liable to pay interest u/s. 243B of the Act. Accordingly rejected the submissions and charged interest of Rs. 45,74,262/- u/s. 234B of the Act vide order dated 29.06.2021 passed u/s. 154 r.w.s. 143(3) of the Act. 3. Being aggrieved, an appeal was filed before the CIT(A), who vide the impugned order confirmed the action of the AO. 4. Being aggrieved, the appellant is in appeal before us in the present appeal. 3 ITA No. 132/Coch/2024 Jacob Thomas 5. It is submitted that the AO ought not have exercised jurisdiction u/s. 154 of the Act to levy interest u/s. 234B of the Act, since levy of interest u/s. 234B is a debatable issue. 6. On the other hand, the learned CIT-DR submits that levy of interest u/s. 234B is consequential in nature and levy of interest u/s. 234B does constitute a mistake apparent from record and, therefore, no interference is called for. 7. We have heard the rival contentions and perused the material available on record. The only issue that arises for our determination is whether the AO was justified in charging interest u/s. 234B of the Act by resorting to the jurisdiction vested with him under the provisions of section 154 of the Act. Admittedly, the AO had not charged interest u/s. 234B of the Act in the original assessment. There is no dispute that the appellant is liable to pay advance tax in terms of provisions of section 207 of the Act on the assessed income. The disparity between the returned income and assessed income had arisen on account of the additions made by the AO u/s. 37(1) and 68 of the Act, which are subject matter of appeal before the CIT(A), which is still pending disposal. The levy of interest u/s. 234B is automatic and mandatory at the rate stipulated therein as held by the Hon'ble Supreme Court in the case of CIT v. Anjum MH Ghaswala [2001] 119 Taxman 352. Therefore, the failure of the AO to charge interest u/s. 234E in the original assessment order, does give rise to a mistake apparent from record, which is capable of 4 ITA No. 132/Coch/2024 Jacob Thomas being rectified under the provisions of section 154 of the Act, therefore, the AO was justified in levying interest u/s. 234B of the Act by resorting to the provisions of section 154 of the Act. Thus, we do not find merit in the present appeal filed by the assessee. 8. In the result, appeal filed by the assessee stands dismissed. Order pronounced in the open court on 14th May, 2025. Sd/- Sd/- (SOUNDARARAJAN K.) JUDICIAL MEMBER (INTURI RAMA RAO) ACCOUNTANT MEMBER Cochin, Dated: 14th May, 2025 n.p. Copy to: 1. The Appellant 2. The Respondent 3. The Pr. CIT concerned 4. The Sr. DR, ITAT, Cochin 5. Guard File By Order Assistant Registrar ITAT, Cochin "