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Income Tax Appellate Tribunal, ‘A’ BENCH : BANGALORE
Before: SMT. BEENA PILLAI & SHRI LAXMI PRASAD SAHU
ORDER PER BEENA PILLAI, JUDICIAL MEMBER Present appeal is filed by the assessee against order dated 21/06/2022 by the Ld.CIT(A)-11, Bangalore for A.Y. 2011-12 on following grounds of appeal:
1. The order of the learned Commissioner of Income Tax (Appeals) is opposed to the facts of the case and law applicable to it.
The learned Commissioner of Income Tax (Appeals) erred in dismissing the grounds on levy of interest U/s.234D of the act of Rs.87,89,415/- for the alleged reason that. the interest was levied in the order U/s.143(3) r.w.s. 147 of the act. dated 28.06.2019 and not in the order U/s.154 of the act, dated 26.11.2021 which was the subject matter of the appeal.
The learned Commissioner of Income Tax (Appeals) erred in ignoring the fact that, the order U/s.154 of the act is consequent to a notice issued U/s.154 of the act dated 19.07.2021 and in the reply to the said notice the issue of levy of interest U/s.234D of the act was taken up and hence it could not have been held that, the issue did not emanate from the order U/s.154 of the act. 4. The learned Commissioner of Income Tax (Appeals) erred in dismissing the grounds on the issue of levy of interest U/s.234D of the act on technical reasons ignoring the fact that, under law no such interest could have been levied in the case of the appellant and hence on the merits of the position of law the relief should have been allowed. 5. The learned Commissioner of Income Tax (Appeals) erred in ignoring the position of law that. once an order U/s.154 of the act was passed on 29.07.2021 it takes the place of the original order U/s.143(3) r.w.s 147 of the act. dated 28.06.2019 and if there are any mistakes in the original order which continue to exist in the order U/s.154 of the act, it is the order U/s.154 of the act which is to be rectified for remedying the mistake. 6. The learned Commissioner of Income Tax (Appeals) erred in holding that. the provisions of section 234B(3) of the act as amended by Finance Act 2015 w.e.f 01 06.2015 is to be applied retrospectively for all the reassessments and re-computations made after 01.06.2015. 7. The learned Commissioner of Income Tax (Appeals) erred in ignoring the fact that, the subject matter of the appeal in regard to the levy of interest U/s.234B of the act is with reference to the assessment year 2011-12 and the provisions of section 234B(3) of the act, introduced by Finance Act 2015 w.e.f 01.06.2015 could not have been applied to the said year. 8. The learned Commissioner of Income Tax (Appeals) erred in relying on the ratios laid down by Delhi High Court in the case of Orchid Infrastructure Developers (P)
Page 3 of Ltd V. Union of India (2019) 102 Taxmann.com 289 (Delhi) and the High Court of Gujarat in the case of Devdip Malls Developers (P) Ltd V. Secretary (2017) 85 Taxmann.corn 47 (Gujarat) to hold that, the provisions of section 234B(3) of the act should be applied retrospectively ignoring the fact that. the said decisions are in the context of the provisions of section 234B(2A) of the act and not the provisions of section 234B(3) of the act. PRAYER The appellant prays that the Hon'ble Tribunal to kindly delete (i) The interest levied U/s.234D of the act of Rs.87,89,415/- (ii) The interest excess levied U/s.234B of the act of Rs.2,22,22,178/-“ 2. Brief facts of the case are as under: 2.1 The assessee filed a return of income for the A.Y.2011-12 on 27.09.2011 declaring Nil income. An order U/s.143(3) of the act was passed on 18.03.2014 accepting the returned income. Subsequently a notice U/s.148 of the act, was issued on 29.03.2018. An order U/s.143(3) r.w.s 147 was passed on 28.06.2019, wherein an addition of Rs.16,05,86,054/- was made under the provisions of section 14A of the act r.w. Rules 8D of the Rules. Considering this addition the book profit for the purpose of the provisions of section 115JB of the act was also varied 2.2 Against this order the assessee has filed an appeal before the Commissioner of Income Tax (Appeals) which is pending. In the order U/s.143(3) r.w.s 147 of the act, the Assessing Officer has levied interest of Rs.87,89.415/- under the provisions of 234D of the act.
Page 4 of 2.3 The Assessing Officer then issued a notice U/s.154 of the act. dated 19.07.2021 proposing recompute the interest U/s.234B(3) of the act, at Rs.3,16,85,548/- 2.4 In response to proposal U/s.154 of the act issued by the Assessing Officer the assessee filed an objection vide letter dated 22.07.2021 for the enhancement of interest U/s.234B(3) of the act. Apart from this the assessee requested for rectification of interest levied U/s.234D of the act and also disallowance under the provisions of section 14A of the act. The Assessing Officer without considering the objection filed has passed an order U/s.154 of the act stating that, "however, the assessee chose not to file any objection on or before the specified date. In view of the above, it is presumed that the assessee has no objection to the said proposal”. Accordingly the order U/s.143(3) r.w.s 153D dated 28.06.2019 was rectified. 2.5 Against the order u/s. 154, the assessee filed an appeal before the CIT(A), on 25.12.2021 the CIT(A) vide his order dated 21.06.2022 dismissed the appeal filed by the assessee. Against the CIT(A)’s order, the assessee is before this Tribunal against the quantum of interest levied U/s.234B(3) and also deletion U/s.234D of the act. The Ld.AR at the outset submitted that the original quantum addition made by the Ld.AO u/s. 143(3) order is pending before the Ld.CIT(A). He submitted that in the meanwhile by way of the 154 order, the Ld.AO has enhanced the addition. He prayed that this appeal may also be remanded to the Ld.CIT(A) to be considered together.
Page 5 of The Ld.DR did not object for the issue to be remanded to the Ld.CIT(A). Accordingly, we remand this issue back to the Ld.CIT(A). It is directed that the Ld.CIT(A) is directed to consider the claim raised by assessee in this appeal along with the quantum appeal which is said to be pending adjudication. Accordingly, grounds raised by assessee stands allowed for statistical purposes. In the result, the appeal filed by assessee stands allowed for statistical purposes. Order pronounced in the open court on 30th August, 2022.