GOVINDASWAMY KANNAPPAN,UPPILIPALAYAM vs. ACIT, CORPORATE CRICLE 1, COIMBATORE, COIMBATORE

Brief facts of the case are as follows: The assessee is an individual. For the assessment year 2014-15, return of income was filed on 23.07.2014 declaring total income of Rs.93,54,120/-. Assessment was reopened by issuing notice u/s.148 of the Act dated 29.03.2021. The reassessment was completed u/s.147 r.w.s. 144B of the Act on 30.03.2022. In the said reassessment order, the AO did not levy any interest u/s.234A, 234B, 234C & 234D of the Act. The AO vide order dated 29.05.2023 passed u/s.154 r.w.s.147 of the Act, levied interest u/s.234A, 234B, 234C & 234D of the Act as follows:- i. Interest u/s.234A of the Act – Rs.24,719/- ii. Interest u/s.234B of the Act – Rs.18,38,245/- iii. Interest u/s.234C of the Act – Rs.8,174/- iv. Interest u/s.234D of the Act – Rs.1,00,528/-

Aggrieved by the rectification order dated 29.05.2023, assessee filed appeal before the FAA. Before the FAA, it was contended that the AO had committed an apparent mistake in the rectification order by treating the assessee as a company, whereas the assessee is an

The FAA rejected the submissions of the assessee. It was held by the FAA that provisions of section 207(2) of the Act will be applicable only to the individuals and not companies. It is further held that by FAA that assessee was having tax liability exceeding Rs.10,000/- and failure to pay advance tax automatically attracts interest u/s.234B and 234C of the Act. The FAA relied on the judgments of the Hon’ble Apex Court in the case of CIT vs. Anjum M.H. Ghaswala reported in 252 ITR 1 and CIT vs. Rolta India Ltd., reported in 330 ITR 470 (SC) for the proposition that levy of interest u/s.234A, 234B and 234C is mandatory and automatic.

The Ld.DR was duly heard.

We have heard rival submissions and perused the material on record. The solitary issue for consideration is whether the assessee is liable for interest u/s.234A, 234B, 234C & 234D of the Act. As regards interest u/s.234B & 234C of the Act is concerned, we notice that assessee is an individual and is a senior citizen. Copy of aadhaar card of the assessee is placed on record at page 84 of the paper-book filed by the assessee. Section 207(2) of the Act states that an individual resident assessee above age of sixty years and not having income chargeable to tax under the head ‘business or profession’ is not liable for payment of advance tax. Section 207(2) of the Act reads as follows:- 207. Liability for payment of advance tax.— ………. (2) The provisions of sub-section (1) shall not apply to an individual resident in India, who—

On perusal of the return of income and also the reassessment order that is completed, it is clear that for the relevant assessment year, assessee does not have any income chargeable under the head ‘profits and gains of business or profession’. On facts on record, it is clear that assessee is a senior citizen, aged 77 years. In light of the above provisions of section 207(2) of the Act, there is no liability on the assessee for payment of advance tax. Hence, levy of interest u/s.234B & 234C of the Act is uncalled for and we, delete the same.

As regards the interest levied u/s.234A of the Act is concerned, we notice that assessee has filed his return of income within the time prescribed in the notice issued u/s.148 of the Act. The notice u/s.148 of the Act is dated 29.03.2021. The said notice required the assessee to furnish the return of income within 30 days. The assessee has filed his return of income within 30 days i.e., on 28.04.2021. Copy of acknowledgment for filing of said return of income is on record at page 17 of the paper-book filed by the assessee. Since return of income has been furnished within the due

As regards the interest levied u/s.234D of the Act is concerned, the said amount is only consequential and is arising only on account of charging of interest u/s.234B & 234C of the Act. Since we have deleted the interest u/s.234B & 234C of the Act, the interest levied u/s.234D of the Act being consequential, is deleted.

In the result, the appeal filed by the assessee is allowed.