M.Pranuthi, Salem V. ACIT, Salem

MA 104/CHNY/2022

AI Insights

The case involves Mrs. M. Pranuthi, the appellant, who filed Miscellaneous Applications against the order of the Income Tax Appellate Tribunal concerning the assessment years 1995-96 to 1997-98 & 1999-2000. The applications were filed under section 254(2) of the Income-tax Act, 1961, seeking rectification of the Tribunal's earlier order which allowed the charging of interest under section 234D for the mentioned assessment years. The appellant argued that the Tribunal's decision was contrary to the precedents set by the Madras High Court and other judicial pronouncements, which held that interest under section 234D could only be charged in a regular assessment and not in subsequent assessments or rectifications. The Tribunal, however, found no mistake in its earlier decision and dismissed the applications.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 134886 (ITAT-CHENNAI)
• Duration Of Justice: 10 month(s) 10 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 02-07-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 30-03-2023
• Assessment Year: 1999-2000
• Appeal Filed On: 22-08-2022
• Other Referred Cases: CIT Vs. United India Insurance Co. Ltd., P.S.Jagadish vs. DCIT
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Rectification of order
• Section: 154; 244A; 254(2)

Judgement Text

आयकर अपीलीय अिधकरण, ‘डी’ ᭠यायपीठ, चे᳖ई IN THE INCOME TAX APPELLATE TRIBUNAL ‘D’ BENCH, CHENNAI ᮰ी महावीर ᳲसह, उपा᭟यᭃ एवं एवं ᮰ी मंजुनाथ. जी, लेखा सद᭭य के समᭃ BEFORE SHRI MAHAVIR SINGH, HON’BLE VICE PRESIDENT AND SHRI MANJUNATHA. G, HON’BLE ACCOUNTANT MEMBER Misc. Application Nos. 101, 102, 103 & 104/Chny/2022 [In ITA Nos. 589, 590, 591 & 592/Chny/2017] (िनधाᭅरणवषᭅ / Assessment Years: 1995-96, 1996-97, 1997-98 & 1999-2000) Mrs. M. Pranuthi A-11, Sampurna-8, No. 63, 3 rd Cross, 4 th Main, Gavipuram Extension, Bangalore – 560 019. [PAN: AGMPP-9169-P] v. The Assistant Commissioner of Income Tax, Circle -1(1), No.3, Gandhi Road, Salem – 636 007. (ᮧाथᭅक /Petitioner) (ᮧ᭜यथᱮ/Respondent) ᮧाथᭅक कᳱ ओरसे/ Petitioner by : Shri. S. Sridhar, Advocate ᮧ᭜यथᱮ कᳱ ओर से/Respondent by : Shri. AR V Sreenivasan, Addl. CIT सुनवाई कᳱ तारीख/Date of Hearing : 31.03.2023 घोषणा कᳱ तारीख/Date of Pronouncement : 03.07.2023 आदेश /O R D E R PER MANJUNATHA. G, ACCOUNTANT MEMBER: The appellant has filed present Miscellaneous Applications u/s. 254(2) of the Income-tax Act, 1961 (hereinafter referred to as “the Act”) against order of the Tribunal in ITA Nos. 589 to 592/Chny/2017, dated 25.02.2022 for assessment years 1995-96 to 1997-98 & 1999-2000. :-2-: MA. Nos: 101 to 104/Chny/2022 2. The appellant has narrated facts of her case and mistakes stated to be apparent on record from the order of the tribunal dated 25.02.2022 and relevant contents of Miscellaneous Application filed by the assessee in MA No. 101/Chny/2022 are reproduced as under: (1) While disposing of the above appeals by a consolidated order dated 25-02-2022, the Hon'ble Tribunal by Para 9 thereof, was pleased to "direct the Assessing Officer to delete interest levied under section 234D of the Income Tax Act, 1961, for all the four years". (2) The Hon'ble Tribunal observed at Para 10 of the said order that "order giving effect to the orders of appellate authorities is continuation of assessment proceedings" and therefore provisions of Section 234D shall also apply, to assessment years commencing before 01-06-2003, if such proceedings are completed after the said date. (3) In Section 234D, however, the words "regular assessment Occur at three places and not the word "assessment alone. (4) Gist of written submissions dated 02-02-2022 submitted, during the course of the hearing before Honble Tribunal, a copy of Judgement of Hon'ble Madras High Court in the case of CIT Vs. United India Insurance Co. Ltd., (438 ITR 301), who held that interest under section 234D could be charged only in an assessment framed for the first time and not in a subsequent assessment. (5) The Hon'ble Madras High Court remarked in 417 ITR 679 also that the expression "regular assessment" occurs in three places in Section 234D and that an order under section 154 cannot to be the framing of a regular assessment. (6) The written submissions also referred to "regular assessment" at its Page No.1. (7) In a case of P.S.Jagadish vs. DCIT (211 DR 153), Hon'ble Chennai A' Bench of Hon'ble Tribunal has held on 24-01-2022 that commencing point for rectification under section 154 is the date of original order and not the date of any subsequent rectification; the rectification order under section 154 was held as barred by limitation, as it was passed beyond from years from the original order. This issue was contended by Para 2 of Page 3 of the said written submissions. (8) Last para of the Written Submissions submitted that such a debatable issue would not fall within the ambit of Section 154 of the Act as per ratio of the Supreme Court in the case reported in 82 ITR 50. :-3-: MA. Nos: 101 to 104/Chny/2022 (9) Grounds of Appeal No.6 filed before Hon'ble Tribunal contended, relying two 358 ITR 233 Bom and 103 DTR 359 Mum, that interest granted (under section 244A) ought not to have been withdrawn, that too, by an order passed under section 154 (233 ITR 370 Mad approved in 280 ITR 643 SC). (10) It is therefore humbly prayed that the Hon'ble Tribunal, may pass an order under section 254(2), in the interest of justice, holding that, (a) Para 10 of the order of 25-02-2022 passed by Hon ble Tribunal, would be deleted. (b) No interest is chargeable under section 234D if first Original assessment proceedings were made prior to 01- 06-2003. (c) Limitation for rectification under section 154 is four years from the date of original order and therefore order passed under section 154 in petitioner's case on 24-07- 2014 seeking to rectify order of 04-10-2005 were beyond the limitation of four years, as as orders dated 04-10-2015 grated interest under section 244A and not orders dated 05-05-2011. (d) Interest under section 234D cannot be charged in an order passed under section 154, as it is not a regular assessment in spite of amendment by Finance Act, 2012 (417 ITR 679 = 315 CTR 209 Mad and 358 ITR 371 SC). (e) Interest granted under section 244A ought not to have been withdrawn by an order under section 154 as held in 358 ITR 233 Bom and 284 CTR 97 Cal. (f) Pass such other order as the Hon'ble Tribunal deems fit and proper in the circumstances of the Case. 3. The Ld. Counsel for the assessee, referring to provisions of section 234D of the Act, in light of findings of the tribunal at Para 10 of its order submits that the observation of the tribunal with regard to charging interest u/s. 234D of the Act after 01.06.2003, if such proceedings are completed for earlier assessment years is contrary to the decision of Hon’ble High Court of Madras in the case of CIT vs United India Insurance Co. Ltd (2021) (438 ITR 301), where it has been held that the :-4-: MA. Nos: 101 to 104/Chny/2022 assessment referred to u/s. 234D of the Act is only regular assessment but not re-assessment/rectification of the appellant proceedings. He further submits that the ITAT Chennai Benches in the case of P.S. Jagadish vs DCIT (211 DR 153) observed that the starting point of rectification u/s. 254 is the date of original order and not the date of any subsequent rectification. Since, in the present case interest charged by the Assessing Officer u/s. 234D of the Act is on the basis of rectification order passed u/s. 154 of the Act on 24.07.2014 and thus, the question of charging interest does not arise. However, the tribunal although has allowed the appeals of the assessee but has taken up alternative arguments of the assessee and rendered decision, which is contrary to findings given in Para 9 of the order and thus, subsequent findings in Para 10 of the order constitutes mistake apparent on record which needs to be rectified u/s. 254(2) of the Act. 4. The ld. Sr. DR, AR V Sreenivasan, Addl. CIT, submits that the appellant fails to make out a case of prima facie mistake on record from the order of the tribunal dated 25.02.2022, but what is sought from the present Miscellaneous Applications is :-5-: MA. Nos: 101 to 104/Chny/2022 reviewing the decision rendered by the tribunal in the given facts and circumstances of the case and thus, the Miscellaneous Applications filed by the appellant should be dismissed. 5. We have heard both the parties and considered relevant contents of the Miscellaneous Applications filed by the appellant for all assessment years and after considering facts of the case, we find that the appellant fails to make out a case of prima facie mistake apparent on record from the order of the tribunal dated 25.02.2022, which can be rectified u/s. 254(2) of the Act. Further, the tribunal has decided the issue of interest chargeable u/s. 234D of the Act and by considering relevant facts of the case has directed the Assessing Officer to delete interest charged u/s. 234D of the Act, for all assessment years. However, in Para 10 of its order it has discussed the second argument raised by the Ld. Counsel for the assessee in light of provisions of section 234D of the Act, inserted to the statue w.e.f. 01.06.2003 and held that interest u/s. 234D of the Act is chargeable to assessment year commencing before first day of June, 2003, if proceedings in respect of such assessment year is completed after the said :-6-: MA. Nos: 101 to 104/Chny/2022 date. In our considered view, the observations of the tribunal in light of relevant provisions of the Act cannot be considered as mistake apparent on record which can be rectified u/s. 254(2) of the Act and thus, we are of the considered view that there is no merit in Miscellaneous Applications filed by the assessee in all four assessment years and thus, we reject Miscellaneous Applications filed by the assessee for assessment years 1995-96 to 1997-98 & 1999-2000. 6. In the result, Miscellaneous Applications filed by the assessee for assessment years 1995-96 to 1997-98 & 1999- 2000 are dismissed. Order pronounced in the court on 03 rd July, 2023 at Chennai. Sd/- (महावीर ᳲसह ) (MAHAVIR SINGH) उपा᭟यᭃ /Vice President Sd/- (मंजुनाथ. जी) (MANJUNATHA. G) लेखासद᭭य/Accountant Member चे᳖ई/Chennai, ᳰदनांक/Dated: 03 rd July, 2023 JPV आदेश कᳱ ᮧितिलिप अᮕेिषत/Copy to: 1. अपीलाथᱮ/Appellant 2. ᮧ᭜यथᱮ/Respondent 3. आयकर आयुᲦ/CIT 4. िवभागीय ᮧितिनिध/DR 5. गाडᭅ फाईल/GF