ANAND CHARITABLE SANSTHA,BEED vs. THE DCIT EXEMPTION CIRCLE, AURANGABAD

PDF · subscribers
ITA 2197/PUN/2025Status: DisposedITAT Pune25 May 2026AY 2016-179 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the levy of interest under section 234B is mandatory and automatic. The assessee's argument that it was not specifically mentioned in the assessment order does not constitute a mistake apparent from the record, especially when supported by various judicial precedents.

What were the facts?

The assessee trust received donations and offered a portion as anonymous donation. The Assessing Officer (AO) levied interest under sections 234A and 234B in the computation sheet. The AO later rectified the assessment order to include surcharge, and the assessee requested to withdraw the interest under section 234B, arguing it was not specifically mentioned in the assessment order.

What were the issues?

Whether the omission to specifically mention the levy of interest under section 234B in the assessment order constitutes a 'mistake apparent from record' rectifiable under section 154. Whether interest under section 234B is mandatory.

Which sections of the Income-tax Act were involved?

Section 154,Section 234B,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE BENCH “A”, PUNE

Before: MS. ASTHA CHANDRA & SHRI Dr. DIPAK P. RIPOTE

For Appellant: Shri Prateek Jha
For Respondent: Shri Bharat Andhale, Addl.CIT

आदेश /ORDER

PER Dr. DIPAK P. RIPOTE, A.M :

This is an appeal filed by the assessee against the order of the Learned ADDL/JCIT(A)-3, Bengaluru (herein after referred as ‘First Appellate Authority’), passed u/s. 250 of the Income Tax Act, 1961 (‘the Act’) for AY 2016-17 on 26-08-2025, emanating from the Rectification Order u/s 154 of the Act, dated 25-11-2021.

2.

The assessee has filed the following grounds of appeal:

ITA No. 2197/PUN/2025

Ld.AR submitted that assessee is not pressing Ground No. 3.

ITA No. 2197/PUN/2025

2.

BRIEF FACTS OF THE CASE: Assessee-trust had filed return of income for AY. 2016-17 on 04-11- 2016, declaring total income at NIL. Assessee’s case was selected for scrutiny and accordingly, notice u/s. 143(2), dt. 03-07-2017 was duly served. During the scrutiny proceedings, AO observed that assessee had received donations totaling to Rs. 9,43,34,829/-. AO issued notices u/s. 133(6) of the Act to some of the entities. During the scrutiny proceedings, assessee filed a letter dt. 11-12-2018 before the AO, which has been reproduced in the assessment order. In the said letter, assessee submitted that it was not possible for the assessee to submit confirmations from all the donors and, therefore, assessee suo motu offered Rs. 2,83,00,449/- for taxation as anonymous donation u/s. 115BCC of the Act. Accordingly, the AO assessed the income at Rs. 2,35,83,710/-. AO issued computation and notice u/s. 156 which is demand notice along with assessment order. In the computation sheet enclosed with the assessment order, AO calculated the interest u/s. 234A and 234B of the Act. Copy of the computation sheet has been reproduced by the Ld. First Appellate Authority.

2.1. Subsequently, the AO realized that he has not levied surcharge which was applicable for the year under consideration. Accordingly, AO issued notice u/s. 154 of the Act. Assessee filed a reply dt. 30-08-2021, wherein assessee agreed for levy of surcharge. However, vide letter dt. 30- 08-2021, assessee submitted that interest u/s. 234B has not been specifically mentioned in the assessment order therefore, assessee requested AO to withdraw charging of interest u/s. 234B of Rs. 23,96,922/-. Assessee made an elaborate submission on the issue. However, the AO rejected the contention of the assessee following the decision of the Hon’ble Supreme Court in the case of DIT vs. M/s. Mitsubishi Corporation in Civil Appeal No. 1262 of 2016.

2.2. Aggrieved by the order u/s. 154 of the Act, assessee filed an appeal before the Ld. First Appellate Authority. The Ld. First Appellate Authority discussed the issue at length and upheld the order u/s. 154 of the Act. Ld. First Appellate Authority relied on the decision of the Hon’ble Supreme Court in the case of CIT vs. Anjum Ghaswala 252 ITR 1, decision of the Hon’ble Jharkhand High Court in ITA No. 55 of 2019 in the case of Manoj Kumar, 16-08-2023.

ITA No. 2197/PUN/2025

2.3. Aggrieved by the order of the Ld. First Appellate Authority, the assessee filed an appeal before this Tribunal.

3.

Submission of Ld.AR: The Ld.AR filed a paper book and relied on the following decisions: i. ACIT vs. M/s. Uranium Corporation of India Ltd., in ITA No. 62/Ran/2017, dt. 19-11-2018; ii. Ajay Prakash Verma vs. ITO, in T.A.No. 38 of 2010, , dt. 25- 07-2012 (Hon’ble Jharkhand High Court); iii. Smt. Tej Kumari vs. CIT [2001] 114 Taxman 404 (Patna)(FB); iv. Bajrang lal Naredi vs. ITO in ITA No. 327/Ran/2018, dt. 20- 01-2020 v. PCIT vs. Manoj Kapoor [2023] 156 taxmann.com 205 (Jharkhand);

4.

Submission of Ld.DR: The Ld.DR relied on the order of the AO as well as on the order of the Ld. First Appellate Authority. Ld.DR further submitted that assessee had made a request u/s. 154 to withdraw the interest charged u/s. 234B of the Act. Only mistakes apparent from record can be considered u/s. u/s. 154 of the Act. The present issue of section 234B of the Act as pleaded by the Ld.AR is a debatable issue and hence, outside the purview of section 154 of the Act. Ld.DR relied on the order of the Hon’ble Supreme Court in the case of CIT vs. Anjum H.M. Ghaswala [2001] 119 Taxman 352 (SC).

5.

Findings and analysis: We have heard both the parties and perused the records. In this case, assessment order was passed u/s. 143(3) of the Act on 22-12-2018. In the assessment order addition of Rs. 2,35,83,708/- was made on account of anonymous donations, which has been accepted by the assessee.

5.1. The AO issued computation sheet and demand notice along with the assessment order. In the computation sheet enclosed with the assessment

ITA No. 2197/PUN/2025

order, AO calculated interest u/s. 234A and 234B of the Act. We have verified the computation sheet and noted these facts.

5.2. The AO issued notice u/s. 154 of the Act on account of surcharge being not charged. The assessee vide letter dt. 30-08-2021 accepted the fact and agreed for rectification. However, assessee simultaneously made a request to the AO that charging of interest u/s. 234B of the Act is erroneous as specific mention in the assessment order is not there for charging interest u/s. 234B of the Act. Therefore, vide letter dt. 30-08- 2021, the assessee requested the AO to rectify the mistake of charging interest u/s. 234B of the Act.

5.3. Thus, in this case, request has been made by the assessee to drop interest u/s. 234B of the Act which was levied by the AO in the computation sheet, which was enclosed with assessment order.

5.4. The Ld. First Appellate Authority confirmed the rectification order, rejecting assessee’s claim.

5.5. Aggrieved by the order u/s. 250 of the Act, assessee has filed appeal before this Tribunal.

5.6. Ld.AR submitted that it is mandatory to invoke provisions of section 234B of the Act in the assessment order before charging interest u/s. 234B of the Act.

5.7. In this case, as mentioned above, the assessee has made a request to the AO to drop the interest u/s. 234B u/s. 154 of the Act. Thus, rectification request was made by the assessee qua 234B. The assessee’s submission in this context was that AO has not specifically charged interest u/s. 234B in the assessment order. Therefore, the question before us is, can this be a mistake apparent on record for the purpose of section 154 of the Act. Section 154 of the Act permits the AO to rectify the mistakes apparent from record. Mistake apparent from record has been explained by various judicial pronouncements that a mistake which is easily detectable and does not need elaborate submission or elaborate reliance on case laws. In the case of the assessee, assessee has relied on

ITA No. 2197/PUN/2025

various case laws to explain non-charging of interest u/s. 234B of the Act. The assessee’s diving into the ocean of case laws to prove his case itself explains that it’s a debatable issue and not a mistake apparent from record. Therefore, it is not a mistake apparent from record. Therefore, in these facts and circumstances, we are of the considered opinion that AO was right in rejecting assessee’s claim to withdraw interest levied u/s. 234B of the Act.

5.8. Even otherwise, this issue is no more res integra. The Hon’ble Supreme Court’s Constitution Bench consisting of 5 Hon’ble Judges, in the case of CIT vs. Anjum H.M. Ghaswala (supra), held that the interest u/s. 234A, 234B and 234C are obligatory in nature. The relevant paragraph of the Hon’ble Supreme Court order is as under: Quote “….17. If the scheme of levy of interest is, thus, to be analysed on the anvil of the provisions referred to hereinabove, it shows that the interest contemplated under sections 234A, 234B and 234C is mandatory in nature…………………..” Unquote 5.9. Hon’ble Supreme Court in the case of Mansarovar Commercial (P.) Ltd. vs. CIT [2023] 149 taxmann.com 178 (SC) has held as under: Quote “12. Insofar as the submission on behalf of the respective assessees regarding levy of interest and the submission on behalf of the assessees that in absence of any specific order passed in the assessment order tolevy interest, the interest could not have been levied, is concerned, the said issue as such is concluded against the assessees in view of the Constitution Bench decision of this Court in the case of Anjum M.H. Ghaswala(supra) as well as the subsequent decision in the case of Karanvir Singh Gossal (supra). The ITAT relied upon the decision of the Patna High Court in the case of Ranchi Club Ltd. (supra), however, the decision of the Patna High Court in the case of Ranchi Club Ltd. (supra) is held to be not good law, in view of the Constitution Bench decision of this Court in the case of Anjum M.H. Ghaswala (supra). 12.1 In the case of Anjum M.H. Ghaswala (supra), while dealing with the interest under the provisions of Sections 234A, 234B and 234C of the Income-tax Act, 1961, it is observed and held that the interest contemplated under the said provisions is mandatory in nature and the power of waiver or reduction has not been expressly conferred on the Commission. The same indicates that insofar as the payment of statutory interest is concerned, the same is outside the purview of the settlement contemplated in Chapter XIX-A of the Act. In the present case also, the levy of interest under section 234A for default in furnishing the return of income is mandatory and automatic. Section 234A of the Act provides that where the return of income for any assessment year is furnished after the due date or is not furnished, the assessee shall be liable to pay simple interest. Thus, interest under section 234A is statutory interest leviable and payable and therefore the decision of this Court in the case of Anjum M.H. Ghaswala (supra) shall be applicable with full force. Therefore, when the interest is levied as per the workings mentioned in ITNS 150 which is forming part of the assessment order, it is rightly held to be sufficient and good enough to charging interest. (See

ITA No. 2197/PUN/2025

decision of this Court in the case of Bhagat Construction Co. (P.) Ltd. (supra)).” Unquote

Thus, the Hon’ble Supreme Court has explained the law that interest u/s. 234A and 234B are mandatory in nature and mere mentioning the interest in the computation is sufficient.

6.

The Ld.AR has relied on the decision of the Hon’ble High Court of Patna in the case of Smt. Tej Kumari vs. CIT (supra), however, it is observed that the Hon’ble Patna High Court has not considered the Constitutional Bench decision of Hon’ble Supreme Court in the case of CIT vs. Anjum H.M. Ghaswala (supra). Therefore, the said decision is distinguishable. All other case laws relied by the Ld.AR are distinguishable on facts and law.

7.

The Hon’ble Jharkhand High Court in the case of Manoj Kumar (supra), vide order dt. 16-08-2023 has held as under: Quote “16. Thus, from bare perusal of section 234B of the Act it is crystal clear that the interest has to be charged on an amount equal to the assessed tax or, as the case may be, on the amount by which the advance tax paid as aforesaid falls short of the assessed tax. The term “assessed tax” has been defined in Explanation-1 of section 234B(1). As per said Explanation-1 “assessed tax” means the tax on the total income determined under sub- section (1) of section 143 and where a regular assessment is made, the tax on the total income determined under such regular assessment as reduced by the amount provided in Explanation-1 to section 234B. Therefore, the interest under section 234B has to be charged on the assessed income and not on the returned income of an Assessee.” Unquote 8. Recently, ITAT, Pune in the case of Shetkari Shikshan Prasarak Mandal vs. DCIT (Exemption), in ITA No. 2177/PUN/2024, dt. 22-07-2025, which was pleaded by the same Ld.AR, Shri Prateek Jha, has held as under: Quote “Gr.No.2. On the facts and circumstance previeling in the case, the Honorable CIT Appeal (NFAC) has erred in confirming the order passed u/s 154 rws 143(3) of the Income Tax Act dated 21.10.2021 passed by Dy.CIT Exemption Aurangabad on 21.10.2021 in as much as he did not consider facts that the JAO has charged interest u/s 234A and 234B without assuming the Jurisdiction even though, the mistake was not apparent from record to be rectified u/s 154 of the Income Tax Act.” ………………………. ………………………. “9. We find recently Hon’ble Supreme Court in the case of Mansarovar Commercial (P.) Ltd. v. Commissioner of Income-tax [2023] 149 taxmann.com

ITA No. 2197/PUN/2025

178 (SC) order dated 10-04-2023, under identical facts dismissed the appeal filed by the assessee by observing as under :- “12. Insofar as the submission on behalf of the respective assessees regarding levy of interest and the submission on behalf of the assessees that in absence of any specific order passed in the assessment order to levy interest, the interest could not have been levied, is concerned, the said issue as such is concluded against the assessees in view of the Constitution Bench decision of this Court in the case of Anjum M.H. Ghaswala (supra) as well as the subsequent decision in the case of Karanvir Singh Gossal (supra). The ITAT relied upon the decision of the Patna High Court in the case of Ranchi Club Ltd. (supra), however, the decision of the Patna High Court in the case of Ranchi Club Ltd. (supra) is held to be not good law, in view of the Constitution Bench decision of this Court in the case of Anjum M.H. Ghaswala (supra). 12.1 In the case of Anjum M.H. Ghaswala (supra), while dealing with the interest under the provisions of Sections 234A, 234B and 234C of the Income-tax Act, 1961, it is observed and held that the interest contemplated under the said provisions is mandatory in nature and the power of waiver or reduction has not been expressly conferred on the Commission. The same indicates that insofar as the payment of statutory interest is concerned, the same is outside the purview of the settlement contemplated in Chapter XIX-A of the Act. In the present case also, the levy of interest under section 234A for default in furnishing the return of income is mandatory and automatic. Section 234A of the Act provides that where the return of income for any assessment year is furnished after the due date or is not furnished, the assessee shall be liable to pay simple interest. Thus, interest under section 234A is statutory interest leviable and payable and therefore the decision of this Court in the case of Anjum M.H. Ghaswala (supra) shall be applicable with full force. Therefore, when the interest is levied as per the workings mentioned in ITNS 150 which is forming part of the assessment order, it is rightly held to be sufficient and good enough to charging interest. (See decision of this Court in the case of Bhagat Construction Co. (P.) Ltd. (supra)).” 11. From the perusal of above order, it becomes crystal clear that the judgement of CIT versus Ranchi Club Ltd.,(supra) was held not to be a good law in view of constitutional bench judgement passed in the case of Anjum MH Ghaswala supra and accordingly respectfully following the judgement passed in the case of Mansarovar Commercial (P.) Ltd. v. Commissioner of Income-tax [2023] 149 taxmann.com 178 (SC) order dated 10-04-2023, we hold that there is no infirmity in the order passed by learned CIT(Appeal)[NFAC] wherein he dismissed the appeal filed by the assessee as per the intent of Hon’ble Supreme Court expressed in the case of Anjum MH Ghaswala(supra) that the levy of interest u/s 234 A & 234 B is mandatory in nature & therefore there is no error in passing rectification order by the AO. Accordingly, all the grounds raised by the assessee fails and the appeal filed by the assessee is dismissed.” Unquote

9.

In these facts and circumstances of the case, respectfully following the judicial precedents (supra), we do not find any infirmity in the order of the Ld. First Appellate Authority and the AO. Accordingly Ground No. 1 & 2 raised by the assessee are dismissed.

ITA No. 2197/PUN/2025

10.

Ground No.3 was not pressed. Hence, the same is dismissed. Ground No. 4 is general in nature, does not require any adjudication. Accordingly the same is dismissed.

11.

In the result, the appeal of the assessee is dismissed.

Order pronounced in the open Court on 25th May, 2026

Sd/- Sd/- (MS. ASTHA CHANDRA) (Dr. DIPAK P. RIPOTE) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे/Pune; दिन ांक/Dated : 25-05-2026 TNMM

आदेश की प्रतितिति अग्रेतिि/Copy of the Order is forwarded to: अपील र्थी / The Appellant 1. प्रत्यर्थी / The Respondent 2. 3. The concerned Pr.CIT, Pune 4. DR, ITAT, ‘A’ Bench, Pune 5. ग र्ड फ ईल / Guard file. आदेशानुसार/ BY ORDER, // True Copy // Assistant Registrar आयकर अपीलीय अदिकरण ,पुणे / ITAT, Pune

More judgments on Section 154

All 8,676 judgments and leading authorities on Section 154 →

Recent GST High Court judgments

Search GST case law →