M/S VINUTHNA SECURITIES PVT LTD ,MUMBAI V. INCOME TAX OFFICER WARD, 1(3)(4), MUMBAI

ITA 2705/MUM/2024

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Vinuthna Securities Pvt Ltd appealed against the order of the NFAC, which had upheld the levy of interest under section 234A following a rectification under section 154 due to an earlier miscalculation. The interest was charged for the period prior to the filing of the income tax return, which was a point of contention. The Tribunal noted that the charging of interest under section 234A is mandatory and dependent on the final determination of income in the quantum appeal, which is still pending. Therefore, the Tribunal allowed the appeal to be disposed of with directions to recompute the interest post the decision of the quantum appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 47179 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-04-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2008-2009
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: KAVITHA KAUSHIK
• Assessee Lawyers: PARAS JAIN
• Keywords: Rectification of order
• Section: 147; 148; 143(3); 250; 154

Judgement Text

" IN THE INCOME-TAX APPELLATE TRIBUNAL “F” BENCH, MUMBAI BEFORE SMT. BEENA PILLAI, JUDICIAL MEMBER & SMT. RENU JAUHRI, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.2705/MUM/2024 (निर्धारण वर्ा / Assessment Year :2008-09) Vinuthna Securities Pvt Ltd 227 Swastik Plaza, Pokhrna Road No. 1, Subhash Nagar, Thane 400601. v/s. बिधम Income Tax Officer Ward 1(3)(4), Mumbai Income Tax Officer Ward 1(3)(4), Mumbai, Aaykar Bhavan 400601 स्थायी लेखा सं./जीआइआर सं./PAN/GIR No: AABCV1025E Appellant/अपीलधर्थी .. Respondent/प्रनिवधदी निर्ााररती की ओर से /Assessee by: Shri. Paras Jain रधजस्व की ओर से /Revenue by: Ms. Kavitha Kaushik (SR DR) सुिवधई की िधरीख / Date of Hearing 03.04.2025 घोर्णध की िधरीख/Date of Pronouncement 07.04.2025 आदेश / O R D E R PER RENU JAUHRI [A.M.] :- This appeal is filed by the assessee against the order of the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as “CIT(A)”] dated 25/10/2017 passed u/s. 250 of the Income-tax Act, 1961 [hereinafter referred to as “Act”] for Assessment Year [A.Y.] 2008-09. 2. The assessee has raised the following grounds of appeal: “On facts, in the circumstance of the case and in law: Wrong jurisdiction under section 154 P a g e | 2 ITA No. 2705/Mum/2024 A.Y. 2008-09 M/s. Vinuthna Securities Pvt Ltd 1. The Commissioner of Income Tax (Appeals) NFAC (Henceforth the \"CIT (A)\") andthe Income Tax Officer, Ward 1(3)(4), Mumbai (Henceforth the \"ITO\") ((collectively referred to as the \"Authorities Below\" erredin holding that rectification proceedings under section 154 of the Income Tax Act, 1961 (\"The Act\") could be invoked in respect of matter entailing long drawn process reasoning as distinguished from mistakes apparent from the record viz levy of interest u/s 234A in reopened assessment in respect of period prior to filing of return of income u/s 147 of the Act. 2. The learned CIT (A) erred in passing the appeal order upholding the order by the ITO without providing effective opportunity to the appellant, of being heard and explains the case. 3. Without prejudice to the above, the \"Authorities Below\" erred in levying interest u/s 234A of the Act amountingto Rs 47, 44,783 in respect of period prior to filing of return of income tax. 4. The Appellant craves the leave to add, alter, modify or delete any one or more or all of the above grounds of appeal.” 3. Brief facts of the case are that, the assessee had not filed its return of income and therefore, a notice u/s. 148 was issued on 28/03/2015. Assessment was completed u/s. 147 r.w.s. 143(3) of the Act, vide order dated 31/03/2016 at an income of Rs. 77,67,080/-. Aggrieved with the order, assessee preferred an appeal before Ld. CIT(A) which is still pending as on date. Subsequently, Ld. AO noticed that interest u/s. 234A had not been correctly levied and therefore, he issued a notice u/s. 154 and later passed an order charging interest u/s. 234A of the Act. The assessee preferred an appeal against this rectification order dated 25/10/2017 before Ld. CIT(A). Ld. CIT(A), vide order dated 20/03/2024, has dismissed the appeal stating that the charging of interest u/s. 234A is mandatory and same will be increased and reduced when the income is finally P a g e | 3 ITA No. 2705/Mum/2024 A.Y. 2008-09 M/s. Vinuthna Securities Pvt Ltd determined. Aggrieved with the order of Ld. CIT(A), the assessee has filed an appeal before the ITAT. 4. At the outset, Ld. AR submitted that vide letter dated 06/02/2025, the assessee has made a request to either keep the appeal in abeyance till the disposal of the quantum appeal or to dispose of the appeal and grant leave to raise the issue as and when the quantum appeal is decided. 5. We have considered the rival submissions and perused the assessee’s application and other material on record. Since the charging of interest u/s. 234A is mandatory and the amount depends on the decision in the assessee’s quantum appeal which is pending before Ld. CIT(A), we allow the assessee’s request to dispose off the appeal made vide letter dated 06/02/2025. Accordingly, the appeal is dismissed with the directions to Ld. AO to recompute the interest u/s. 234A after the quantum appeal is decided. 6. In the result, appeal is dismissed. Order pronounced in the open court on 07.04.2025. Sd/- Sd/- BEENA PILLAI RENU JAUHRI (न्यधनयक सदस्य/JUDICIAL MEMBER) (लेखधकधर सदस्य/ACCOUNTANT MEMBER) Place: म ुंबई/Mumbai दिन ुंक /Date 07.04.2025 दिव्य रमेश न ुंिग वकर/ स्टेनो P a g e | 4 ITA No. 2705/Mum/2024 A.Y. 2008-09 M/s. Vinuthna Securities Pvt Ltd आदेश की प्रनतनलनि अग्रेनित/Copy of the Order forwarded to : 1. अपीलार्थी / The Appellant 2. प्रत्यर्थी / The Respondent. 3. आयकर आयुक्त / CIT 4. विभागीय प्रविविवि, आयकर अपीलीय अविकरण DR, ITAT, Mumbai 5. गार्ड फाईल / Guard file. सत्यानित प्रनत //True Copy// आदेशािुसार/ BY ORDER, सहायक िंजीकार (Asstt. Registrar) आयकर अिीलीय अनर्करण/ ITAT, Bench, Mumbai. "