MS ANANT ROOP PVT. LTD,NEW DELHI V. INCOME TAX OFFICER, WARD 2(4), DELHI, C.R. BUILDING , IP ESTATE

ITA 4557/DEL/2024

AI Insights

The case involves Anant Roop (Delhi) Private Limited, which did not file its income tax return for the assessment year 2011-12 as mandated. The Assessing Officer (AO) initiated reassessment proceedings upon discovering that the company had purchased immovable property worth Rs. 2,68,61,000 and had not filed the required return. Initially, the AO charged interest under section 234A for one month due to late filing, which was later rectified to cover the actual delay of 80 months, resulting in a significantly higher interest charge. The company appealed against the rectification order, arguing that the interest charged was excessive and not in accordance with the law. However, the Tribunal upheld the AO's decision, agreeing that the interest was correctly calculated based on the delay period.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 23552 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ASHISH TRIPATHI
• Assessee Lawyers: ADITYA SARIN
• Keywords: Reassessment proceedings; Rectification of order; Initiation of penalty proceedings; Tangible material
• Section: 148; 143(3); 142(1); 143(2); 54; 271(1)(c); 139(1); 69; 90; 139; 234B

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘A’: NEW DELHI BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENT AND SHRI MANISH AGARWAL, ACCOUNTANT MEMBER ITA No.4557/Del/2024 (ASSESSMENT YEAR 2011-12) Anant Roop (Delhi) Private Limited, 12, Central Lane, First Floor, Bengali Market, New Delhi-110001. PAN-AAECA4991K Vs. Income Tax Officer, Ward-2(4), Delhi (Appellant) (Respondent) Assessee by Shri Aditya Sarin, Advocate Department by Shri Ashish Tripathi, Sr. DR Date of Hearing 18/02/2025 Date of Pronouncement 28/02/2025 O R D E R PER MANISH AGARWAL, AM: This is the appeal filed by the assessee against the order of CIT(A) NFAC, Delhi dt. 31.07.2024 in appeal No. NFAC/2010- 11/10157297 for AY 2011-12. 2. Brief facts of the case are that appellant is a Pvt. Ltd Company and had not filed the return of income for A.Y. 2011-12 though it is mandatorily required to file return of income in case of a company. AO had information that the appellant had purchased immovable property of Rs. 2,68,61,000/- and since no return was filed, AO 2 ITA No.4557 /Del/2024 Anant Roop Pvt. Ltd. vs. ITO initiated reassessment proceedings by issue of notice u/s. 148 on 30.03.2018. In response the appellant filed the return on 10.5.2018 declaring total income at Rs. 17,559/-. AS the assessee has not complied with the statutory notices, the AO passed the order u/s. 144 r.w.s. 147 and made an addition of Rs. 2,68,61,000/- u/s. 69 of the Act. Thereafter it was come to the notice of the AO that interest u/s. 234A(3) levied at Rs. 89,167/- was short as it was charged for one month as against for 80 months, a notice for the rectification u/s. 154 was issued which also remained uncompiled. Thus, the AO passed an order u/s. 154 dt. 17.3.2020 wherein the interest u/s. 234A is increased from Rs. 89,167/- to Rs. 71,33,375/- . Aggrieved to this, the appellant is in appeal before us by taking following grounds of appeals: “1. That the order passed by the Ld. CIT(A) u/s 250(6) of the Income Tax Act, 1961 (herein referred as ‘the Act’) is incorrect, bad in law, misconceived and have been passed without appreciating the submissions made in the facts and circumstances of the present case. 2. That the Ld. CIT (A) has grossly erred while upholding the assessment order passed by Ld. Assessing Officer (‘AOQ’) u/s 154 r.w.s 147 r.w.s of 144 of the Income Tax, 1961 which is incorrect, bad in law and have been passed without considering the submission of the Assessee. 3. That the initiation of reassessment proceeding in the present case by way of issuance of notice w/s 148 of the Act without serving upon the notice, reasons to believe and the sanction of specified authority is void ab initio as it is bad in law and also without jurisdiction. 4. That the Ld. Assessing Officer has erred while issuing notice u/s 148 without recording reasons by independent application of mind, without creating the live link/nexus between the tangible material & formation of belief and merely initiated the proceeding on the basis of borrowed satisfaction/information received from NMS/AIMS. 3 ITA No.4557 /Del/2024 Anant Roop Pvt. Ltd. vs. ITO 5. That the Ld. CIT (A) has grossly erred in upholding the addition of 32,68,61,000/- made by Ld. Assessing officer on account of unexplained investment u/s 69 of the Act wherein the Assessee herein has duly declared the source of investment in the financial statements filed along with ITR. 6. That the Ld. CIT (A) has grossly erred while upholding the charging of interest by the Ld. Assessing Officer against the returned income declaring loss of Rs. 17,559/-. 7. That the Ld. CIT (A) has grossly erred in upholding the initiation of penalty proceedings by Ld. Assessing Officer u/s 271(1)(c) of the Act. 8. That the Ld. CIT (A) has grossly erred in upholding the charging of interest by Ld. Assessing Officer u/s 234A, 234B, 234C & 234D of the Act. 9. 9. The appellant craves leave to add, alter, amend or vary any of the above grounds during the pendency of the appeal.” 3. At the outset it is seen that the present appeal emanates from the rectification order passed u/s 154 dt. 17.3.2020 wherein the AO has made rectification and corrected the amount of interest charged u/s 234A of the Act which was charged less in the order passed u/s 143(3). However, from the perusal of the grounds of appeal, it is seen that the assessee has not taken any specific ground with regard to the rectification in charging the interest u/s 234A and effective grounds taken from S.N. 1 to 6 are in relation to the merits of the issues which are not born out from the impugned order passed u/s 154 of the Act. Further Ground of appeal No. 7 relates to the initiation of penalty proceedings u/s 271(1)(c) and Ground of appeal No. 8 relates to the charging of interest u/s 234A, 234B and 234C. Last ground is general in nature. However, no specific ground is taken against the increase in the amount of interest charged u/s 234A vide impugned order passed u/s 154 of the Act. 4 ITA No.4557 /Del/2024 Anant Roop Pvt. Ltd. vs. ITO 4. From the perusal of the order of ld. CIT(A), we observed that the ld. CIT(A) has considered this aspect in detail and decided the appeal of the assessee, relevant findings are as under: 6.1. Ground of Appeal No. 1: 6.1.1. This ground includes four sub grounds. All these grounds pertain to the addition made by the Ld.AO vide his order u/s. 144 r.w.s 147 in his order dated 27.12.2018. As the present appeal is against order u/s. 154 dated 17.3.2020, hence the above grounds do not pertain to the order appealed against. In view of the above facts and circumstances of the case Ground No. 1 along with 4 sub-grounds are dismissed. 6.2. Ground of Appeal No. 2: 6.2.1. Ground no. 2 has 6 sub-grounds. Out of the above, ground no. 2(5), ground no. 2(8), ground no. 2(9) and ground no. 2(10) are general in nature and hence dismissed. 6.2.2. With regard to Ground no. 2(7), since it pertains to initiating of penalty u/s. 271(1)(c), which is initiated in order passed u./s. 144 rws 147 dated 27.12.2018 which is not the order appealed against presently in this appeal, hence this ground is also dismissed. 6.2.3. With regard to ground no 2(6), the appellant had submitted that Ld.AO has erred in levy of interest u/s. 234A and 234B of the Act without appreciating the fact that there is no liability on the appellant to pay advance tax for the year under consideration. Since, the order appealed against deals with the levy of interest u/s. 234A only, hence this issue is dealt in detail under this ground. Since 234B is not levied in rectification order, which is the matter of present appeal hence the same is not discussed here. 6.2.4. Since the issue is regarding interest u/s. 234A, hence the section is quoted for ready reference- “Where the return of income for any assessment year under sub- section (1) or sub-section (4) or sub-section (8A) of section 139, or in response to a notice under sub-section (1) of section 142, is furnished after the due date, or is not furnished, the assessee shall be liable to pay simple interest at the rate of [one per cent.] [ Substituted by Act 54 of 2003, Section 12, for \" one and one-fourth per cent.\" (w.r.e.f. 8.9.2003).] for every month or part of a month comprised in the period commencing on the date immediately following the due date, and,- 5 ITA No.4557 /Del/2024 Anant Roop Pvt. Ltd. vs. ITO (a)where the return is furnished after the due date, ending on the date of furnishing of the return; or (b)where no return has been furnished, ending on the date of completion of the assessment under section 144, [on the amount of the tax on the total income as determined under sub-section (1) of section 143, and where a regular assessment is made, on the amount of the tax on the total income determined under regular assessment, as reduced by the amount of,- [ Substituted by Act 21 of 2006, Section 48, for \" on the amount of the tax on the total income as determined under sub-section (1) of section 143 or on regular assessment as reduced by the advance tax, if any, paid and any tax deducted or collected at source\" (w.e.f. 1.4.2007).] (i)advance tax, if any, paid; (ii)any tax deducted or collected at source; (iii)any relief of tax allowed under section 90 on account of tax paid in a country outside India; (iv)any relief of tax allowed under section 90-A on account of tax paid in a specified territory outside India referred to in that section; (v)any deduction, from the Indian income-tax payable, allowed under section 91, on account of tax paid in a country outside India; and (vi)any tax credit allowed to be set off in accordance with the provisions of section 115-JAA.] Explanation 1. - In this section, \"due date\" means the date specified in subsection (1) of section 139 as applicable in the case of the assessee……….” 6.2.5. As per the facts of the case, the appellant is a Pvt Ltd Company and hence has to mandatorily file the return of income for A.Y. 2011-12 by September, 2011. But the appellant failed to file the return of income as per sub-section (1) of Section 139. As per information available with Ld.AO through NMS/AIMS data, the appellant had purchased immovable property of Rs. 2,68,61,000/-. The appellant being an company was mandatorily required to file return of income, however the same was not filed for A.Y. 2011-12. Hence, notice was issued by the Ld.AO u/s. 148 6 ITA No.4557 /Del/2024 Anant Roop Pvt. Ltd. vs. ITO to which the appellant filed return of income on 10.5.2018. Later on notices u/s. 143(2) and 142(1) were issued but no compliance was made. Hence, show cause notice dated 19.12.2018 was served on the appellant by affixture. This notice also remained uncomplied. In view of the fact that no submissions / documents /clarification etc was submitted by the appellant hence Ld.AO passed an order u/s. 144 rws 147 and made an addition of Rs. 2,68,61,000/- u/s. 69 of Income Tax Act, 1961. Later on it was realized that interest u/s. 234A(3) was charged erroneously for one month whereas it should have been charged for 80 months. Rectification notice u/s. 154 was issued to the appellant which remained uncomplied, hence order u/s. 154 was passed on 17.3.2020 charging interest u/s. 234A at Rs. 71,33,375/-. 6.2.6. As per the order u/s. 154 while passing the original assessment, interest u/s. 234A(3) was erroneously charged for one month at Rs. 89,167/- while the correct interest should have been charged from October, 2011 to May 2018 [when the appellant filed e-return in response to notice u/s. 148 on 10.5.2018]. Thus the interest u/s. 234A was increased from Rs. 89,167/- to Rs. 70,44,208/-. As per Section 234A, the Ld.AO has charged the interest at 1% for every month or part of the month comprising in the period commencing on the date immediately following the due date and ending on the date where return of income was filed by the appellant. As the action taken by the Ld.AO is as per the law and procedure, hence I do not find any reason to interfere in the rectification order passed by the Ld.AO. 6.2.7. In view of the above facts and circumstances of the case ground no. 2(6) is dismissed. 5. Before us, ld. AR failed to controvert the findings of ld. CIT(A) and argued that notice u/s 148 was issued on 30.3.2018 and assessee had filed the return of income in response to such notice on 10.05.2018 thus there was a delay of one month only for which the interest u/s 234A was already charged in the order passed u/s 143(3) of the Act. He, therefore, requested for deletion of excess interest charged u/s 234A through impugned order. 7 ITA No.4557 /Del/2024 Anant Roop Pvt. Ltd. vs. ITO On the other hand, the ld. Sr. DR supported the order of the lower authorities and submits that charging of interest u/s 234A is mandatory. As the assessee has not filed the return of income u/s 139 which was finally filed on 10.05.2018 thus as per section 234(1) interest is chargeable for the period starting from the due date of filing of return u/s 139(1) till the return of income finally filed by the assessee. He thus argued that the AO has correctly charged the interest u/s 234A and the rectification order so passed rectifying the amount of interest u/s 234A be upheld. 6. After considering the facts we find that the grounds No. 1 to 6 are not borne out form the impugned order passed u/s 154 and before us the ld.AR has failed to controvert the findings of ld. CIT(A) while dismissing the grounds taken on merits. Only effective issue remained is with regard to the correct amount of the interest u/s 234A. 7. As per clause (a) of sub-section 1 to section 234A, interest is to be charged for every month or part of a month comprised in the period commencing on the date immediately following the due date till the ending on the date of furnishing of the return. Due date for filing of return of income in the case of assessee was 30th September 2011. Undisputedly assessee had filed the return of income for the first time in response to notice u/s 148 on 10.5.2018 and no return was filed u/s 139 of the Ac, thus assessee is liable for interest u/s 234A as provided in section 8 ITA No.4557 /Del/2024 Anant Roop Pvt. Ltd. vs. ITO 234A(1)(a) of the Act. Since the AO vide rectification order has corrected the period of default in filing the return by the assessee from one month to eighty months which is in accordance with the provisions of section 234(1)(a) thus, there is no error in such order. In view of these facts we are not inclined to interfere in the orders of the lower authorities which is hereby upheld. Accordingly, all the grounds taken by the assessee are dismissed. 8. As a result, appeal of the assessee is dismissed. Order is pronounced on 28th February, 2025. Sd/- Sd/- (MAHAVIR SINGH) (MANISH AGARWAL) VICE PRESIDENT ACCOUNTANT MEMBER Dated: 28/02/2025 PK/Ps Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI "