Income Tax Appellate Tribunal - Chandigarh
Ramesh Chander Aggarwal, Chandigarh vs Ito, Chandigarh on 15 November, 2017
1
IN THE INCOME TAX APPELLATE TRIBUNAL
CHANDIGARH BENCHES, 'B' CHANDIGARH
BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER &
MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER
ITA No. 521/Chd/2016
Assessment Year: 2004-05
Sh. Ramesh Chander Aggarwal, Vs. The ITO, Ward 2(1),
Prop Zorex India Industries, Chandigarh
Chandigarh
PAN No. AANPA6092P
(Appellant) (Respondent)
Appellant By : Sh. Jaspal Sharma
Respondent By : Sh. Manjit Singh
Date of hearing : 28.08.2017
Date of Pronouncement : 15.11.2017
ORDER
Per Sanjay Garg, Judicial Member:
The present appeal has been preferred by the assessee against the order dated 29.02.2016 of the Commissioner of Income Tax (Appeals) [hereinafter referred to as CIT(A)]-1, Chandigarh.
2. The assessee has taken following grounds of appeal:-
1. The impugned order is both against facts and erroneous in law.
2. On the facts and circumstances of the case the Ld. CIT (Appeals) has erred in having confirmed the order of the Ld. AO passed u/s 154 in charging interest u/s 234A and in enhancing interest u/s 234B of the Income Tax Act, the 2 issue being debatable, and therefore outside the purview of section 154.
3. On the facts and circumstances of the case the Ld. CIT (Appeals) has erred in having confirmed the order of the Ld. AO passed u/s 154 which is illegal and without jurisdiction.
4. On the facts and circumstances of the case the Ld. CIT (Appeals) has erred in having confirmed the order of the Ld. AO even though there was no any satisfaction or direction to charge interest u/s 234A in the assessment order.
5. On the facts and circumstances of the case the Ld. CIT (Appeals) has erred in having held that the assessment u/s 143(3)/147 made on 18.11.2010 was a regular assessment and therefore the appellant was liable to pay interest u/s 234B of the Income Tax Act from the first day of April next following such financial year i.e. 01.04.2004 to the date of passing of regular assessment made for the first time u/s 143(3)/147 on 18.11.2010.
3. The brief facts of the case are that return of income filed by assessee was originally processed u/s 143(1) of the Act. Thereafter, the assessment was reopened u/s 147 of the Act and was completed vide order dated 18.11.2010. Subsequent to the assessment order, a notice u/s 154 of the Income-tax Act, 1961 (in short 'the Act') was issued to the assessee calling for the objections of the assessee which reads as under:-
(i) The necessary rectification as per item (A) may kindly be made. The assessee has no objection to the same.
(ii) As regards charging of interest u/s 234B in the case of reassessment u/s 147 is concerned, your Honour kind 3 attention is invited to the provisions of section 234B (3) which clearly provides that interest u/s 234B can be charged from the date of the order u/s 143(1) till the date of reassessment u/s 147 on the additional demand created against the assessee.
(iii) As regards the non-charging of interest u/s 234A is concerned, no such direction has been provided in the order to charge such interest from the assessee. Unless and until as separate direction is given in the order to charge such interest, no such interest can be now charged u/s 154.
4. The assessee filed his no objection regarding rectification on rebate u/s 88. So far as the non-charging of interest u/s 234A was concerned, the assessee objected to the same stating that no such direction had been given in the assessment order by the ITO. Regarding wrong charging of interest u/s 234B of the Act, the assessee objected to the same stating that interest ought to chargeable u/s 234B should have been charged from the date when the return was processed u/s 143(1) and not from 1.4.2004 in view of Explanation 3 to section 234B (1) of the Act.
5. The Assessing officer, however, did not agree with the above contention of the assessee. He observed that the assessee was liable to pa y interest u/s 234A as he had filed the return late from the due date of filing of the return and the charging of interest u/s 234A was mandatory in this respect. So far as the charging of interest u/s 234B was concerned, the Assessing officer observed that the assessment in this case u/s 143(3) read with section 147 was done for the first time, hence, it was a regular assessment and not re-assessment, therefore, the interest was chargeable from 1.4.2004 till the date of assessment and not from 1.4.2005. Being 4 aggrieved by the above order of the Assessing officer, the assessee unsuccessfully contested the appeal before the Ld. CIT(A).
6. Before us, Ld. AR of the assessee has submitted that the issue regarding charging of interest u/s 234A and 234B was a debatable issue and that the Assessing officer was not entitled to rectify the order as the same cannot be said to be a mistake apparent on record. He otherwise has also relied upon the decision of the Hon'ble Karnataka High Court in the case of 'Sri Vijay Kumar Saboo (HUF) vs ACIT' [2011] 12 taxman.com 322 (Kar.), wherein the Hon'ble High Court has held that when assessment order is passed u/s 147 and that is made basis for levying of interest, if there was determination of tax u/s 143(1) or where regular assessment order passed u/s 143(3) of the Act, then order passed u/s 147 of the Act is treated as an order of reassessment or recomputation.
7. The Ld. DR, on the other hand, has relied upon the findings of the lower authorities.
8. We have heard the rival contentions. So far as the charging of interest u/s 234A is concerned, we agree with the findings of the lower authorities that the charging of interest u/s 234A was mandatory and no separate findings of the Assessing officer was required. The reliance in this respect is placed on the decision of the Hon'ble Supreme Court of India in the case of 'CIT Vs. Bhagat Construction Co. (P) Ltd.' [2015] 60 taxmann.com 334(SC). So far as the charging of interest u/s 234B is concerned, we find force in the contention of the Ld. AR. Even otherwise, the issue is debatable as the same does not constitute a mistake apparent on record. The Assessing officer was not supposed to amend the order in 5 respect of levy of interest u/s 234B of the Act under the garb of the provisions of section 154 of the Act. In view of this, the rectification of the order so far as the levy of interest u/s 234A is concerned, the issue is decided in favour of the Revenue and the findings of the lower authorities in this respect are upheld. So far as charging of interest u/s 234B is concerned, the issue is decided in favour of the assessee holding the same being a debatable issue, the rectification order in this respect is illegal, therefore, the order of the lower authorities on this issue is set aside.
9. In the result, the appeal of the assessee is treated as partly allowed.
Order pronounced in the Open Court on 15.11.2017 Sd/- Sd/-
( ANNAPURNA GUPTA) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated : 15 t h Nov., 2017 Rkk Copy to: 2. The Appellant 3. The Respondent 4. The CIT 5. The CIT(A) 6. The DR