NOVEL SUPPLIERS PVT. LTD.,KOLKATA vs. A.C.I.T., CIRCLE - 5(1), KOLKATA

The only issue pressed by the learned Authorized Representative (ld. AR) is against the order of Assessing Officer (In short, ‘the AO’) passed order u/s 154 r.w.s. 143(3) of the Income-tax Act, 1961 (In short, ‘the Act’) calculating interest at Rs.8,22,523/- u/s 234C of the Act as against the

Brief facts of the case are that the assessee is a non banking finance company and filed its return of income for A.Y. 2017-18 on 21.10.2017, declaring total income of Rs.9,06,31,770/-. The interest u/s 234C of the Act was automatically calculated at Rs.8,22,523/- when the compute tax button was pressed, whereas the correct and actual interest comes to Rs.7,82,999/-, but since there was no option to correct the mistake, the return has to be e- filed. The assessee had to pay a sum of Rs.8,22,523/- as interest u/s 234C of the Act. Thereafter, return was processed u/s 143(1) of the Act on 02.02.2018, wherein interest u/s 234C of the Act was rightly computed at Rs.7,28,999/- instead of system auto-calculated interest of Rs.8,22,523/-. Thereafter, the case was selected for scrutiny under CASS and assessment u/s 143(3) of the Act was framed vide order 21.12.2019 wherein again the interest was correctly computed u/s 234C of the at Rs.7,28,999/- as per the computation sheet annexed with the order. 4. Subsequently, the AO issued notice u/s 154 of the Act on 02.06.2023 on the ground that order u/s 143(3) of the Act was required to be amended as there is a mistake apparent from record in respect of computation of interest u/s 234C of the Act so far as the interest charged u/s 234C is concerned. According to the AO the interest u/s 234C would be at Rs.8,22,523/- and not Rs.7,28,999/- as levied in the assessment order. The assessee replied the said notice on 07.06.2023, submitting the correct computation of interest as per section 234C of the Act and further submitting therein that the order passed u/s 143(3) of the Act is correct and there is no prima facie mistake in the said order and thus mistake /defect in the

During the appellate proceedings, the ld. CIT(A) dismissed the appeal in limine without deciding the merits when the assessee did not respond to the various notices issued.

We have heard rival submissions and the perused the materials available on record including the computation of interest u/s 234C of the Act, which is placed at Page 26 of the paper book. We note that the correct interest as per the provisions of section 234C of the Act, works out to Rs.7,28,999/- as calculated by assessee in computation sheet. We also note that AO, CPC has correctly computed the interest at Rs.7,28,999/-. Similarly, the AO, while passing the order u/s 143(3) of the Act, correctly levied interest of Rs.7,28,999/-. We note that assessee had paid interest of Rs.8,22,523/- at the time of filing return of income as while pressing the button (Compute tax), the interest was automatically calculated at Rs.8,22,523/-. Therefore, considering the facts and circumstances of the case, we find that rectification order passed by the AO u/s 154/143(3) of the Act, dated 11.08.2023 is wrong and cannot be sustained as there is no mistake in the assessment order passed u/s 143(3) of the Act. In our opinion, the proceedings u/s 154 of the Act were invalidly and wrongly initiated by Assessing Officer. Consequently, we quash the rectification proceedings initiated by Ao u/s 154 of the Act, dated 11.08.2023 as well as the order passed u/s 154 r.w.s 143(3) of the Act.