RADHIKA JEWELTECH LIMITED,RAJKOT vs. DCIT/ACIT,CIRCLE-2(1), RAJKOT

Grounds of appeal raised by the assessee are as follows: 1. The order passed by the Ld. CIT (Appeals)-11, Ahmedabad is bad & illegal to the extent that the rectification order is passed on a debatable issue and further after the order of Ld. A.O. u/s. 143 (1) dated 14.03.2019 levying interest u/s. 234C to the extent of Rs.9,39,226/- no further interest could be levied through an order u/s. 154. The appellant denies its liability for interest. The same is prayed for deletion. 2. The Order of the Ld. Assessing Officer u/s. 143 (1) & 143 (3) got merged with the order dated 18.04.2023 wherein interest u/s. 234C for Rs.9,39,226/-is already charged while granting refund of Rs.2,05,39,809/-. The rectification order u/s. 154 is prayed for deletion. 3. The Ld. CIT (A) has erred in confirming the quantum of 234C interest to the extent of Rs.11,89,121/-instead of Rs. 1,89,121/-. Revision of demand notice for Rs.61,50,44,530/-is prayed for. Appropriated relief is prayed for. 4. The appellant reserves its right to add, amend, alter or modify any of the grounds at or before the time of final hearing.

At the outset, Ld.Counsel for the assessee submitted that the Assessing Officer did not rectify the mistake properly u/s.154 of the Income Tax Act 1961. The Ld.CIT(A) has also not appreciated the fact mentioned by the assessee that the rectification order was passed on debatable issue and further after the order of the Assessing Officer u/s.143(1) dated 14.03.2019, levied interest u/s.234C of the Act to the extent of Rs.9,39,226/- was entirely wrong as no interest could be levied through an order u/s.154 of the Act. Therefore, suitable instruction may be given to the Assessing Officer to rectify the mistake u/s.154 of the Act. The Ld.Counsel also submitted that order of the Assessing Officer u/s.143(1)(1) and 143(3) of the Act got merged with the order on 18.04.2023, wherein interest u/s.234C for Rs.9,39,226/- was already charged while granting refund of Rs.2,05,39,809/-. Hence, the Ld.Counsel for the assessee submitted that the matter may be restored back to the file of the Assessing Officer to rectify the mistake.

On the other hand, the Ld. Sr.DR for the Revenue submitted that the matter may be restored back to the file of the Assessing Officer to rectify the mistake after getting the cogent reason and explanation of the assessee and if the mistake is apparent from the record, the Assessing Officer may rectify the mistake in accordance with law.

I have heard both the parties and perused the material available on record. I note that Ld.CIT(A) erred to the extent that the rectification order was passed on the debatable issue and further after the order of the Assessing Officer u/s.143(1) dated 14.03.2019, levying interest u/s.234C to the extent of Rs.9,39,226/-. Hence, as per the assessee, no further interest could be levied in the order u/s.154 of the Act. Therefore, the Assessing Officer should consider this issue after getting the explanation and cogent reason from the assessee and rectify the mistake in accordance with law.

I also note that the order of the Assessing Officer u/s.143(1) and 143(3) of the Act got merged with the order dated 18.04.2023, wherein interest u/s.234C of the Act for Rs.9,39,226/- had already charged while granting refund of Rs.2,05,39,809/-. Therefore, I direct the AO to rectify this mistake after considering the submission and explanation of the assessee.

The assessee has also raised issue regarding quantum interest u/s.234C to the extent of Rs.11,89,121/-, instead of Rs.1,89,121/-. Therefore, the Assessing Officer, after considering the assessee’s submission and explanation may adjudicate the issue as per the provisions of the Income tax Act.