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Income Tax Appellate Tribunal, ‘C’ BENCH, CHENNAI
Before: SHRI MAHAVIR SINGHAND SHRI MANOJ KUMAR AGGARWAL
आयकर अपीलीय अिधकरण, ‘सी’ �यायपीठ, चे�ई IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH, CHENNAI �ी महावीर �सह, उपा�य� एवं �ी मनोज कुमार अ�वाल, लेखा सद�य के सम� BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENTAND SHRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER
आयकर अपील सं./ITA No.: 2916/CHNY/2019 िनधा�रण वष� / Assessment Year: 2011-12 Shri K. Ramalingam, Vs The Income Tax Officer, No.135-F, Kennedy Nagar, Ward-1(3), Suramangalam, Salem – 7. Salem – 636 005. PAN: AEEPR 8256F (अपीलाथ�/Appellant) (��यथ�/Respondent) अपीलाथ� क� ओर से/Appellant by : Shri G. Baskar, Advocate ��यथ� क� ओर से/Respondent by : Shri P. Sajit Kumar, JCIT सुनवाई क� तार�ख/Date of Hearing : 14.12.2022 घोषणा क� तार�ख/Date of Pronouncement : 14.12.2022 आदेश /O R D E R PER MAHAVIR SINGH, VP: This appeal by the assessee is arising out of the order of Commissioner of Income Tax (Appeals), Salem in ITA No.109/18- 19, vide order dated 27.08.2019. The assessment was framed by the Income Tax Officer, Ward-1(3), Salem for the assessment year 2011-12 u/s.143(3) r.w.s. 147 of the Income Tax Act, 1961 (hereinafter the ‘Act’) vide order dated 26.10.2018.
2 ITA No. 2916/Chny/2019 2. The only issue in this appeal of assessee is against the order of CIT(A) confirming the action of AO in charging of interest u/s.234A, 234B and 234C of the Act. For this, assessee has raised various grounds, which are argumentative in nature and hence, need not be reproduced.
We have heard rival contentions and gone through facts and circumstances of the case. Brief facts are that the assessee filed his return of income for the assessment year 2011-12 on 30.12.2013 admitting total income of Rs.1,53,27,370/- and paid entire taxes thereon including interest u/s.234A, 234B and 234C of the Act, up to that date. Subsequently, notice u/s.148 of the Act dated 29.0.2018 was issued. In response to this notice, return of income was also filed on 24.04.2018 admitting the same income as originally returned by assessee. The reassessment order was passed u/s.143(3) r.w.s. 147 of the Act accepting the returned income. The AO charged interest u/s.234A, 234B and 234C of the Act on the ground that the return of income was not filed within due dates as stipulated u/s.139 of the Act and the original return filed was a belated return and which is non-est as per law. Therefore, the AO charged interest u/s.234A, 234B & 234C of the Act as under:-
3 ITA No. 2916/Chny/2019 Interest u/s Admitted by Fixed by AO – Difference – assessee – Rs. Rs. Rs. 234A 8,24,655 24,64,475 16,39,820 234B 9,49,455 19,10,165 9,60,710 234C 41,403 1,15,425 74,022 Total 18,15,513 44,90,065 26,74,552
Aggrieved, assessee preferred appeal before CIT(A) against charging / enhancing the interest under these provisions, but the CIT(A) confirming charging of interest. Aggrieved, now assessee is in appeal before the Tribunal.
Before us, the assessee contended that in levy of interest u/s.234A of the Act is compensatory in nature for delay in remittance of taxes, in the instant case the interest u/s.234A of the Act has been paid till the date of filing of return i.e., 30.12.2013, when the assessee filed original return of income. Hence, it was prayed that additional interest levied u/s.234A of the Act, over and above Rs.8,24,665/- (computed by assessee himself) i.e., Rs.16,39,820/- be deleted. For this, assessee relied on the decision of Chennai Bench of the Tribunal in the case of Roshanlal Kapoor vs. ACIT, [2008] 26 SOT 26. As regards to levy of interest u/s.234B of the Act, it was submitted that when there is a tax due, interest can be levied and levy is compensatory in nature. It was
4 ITA No. 2916/Chny/2019 contented that all the interest including interest u/s.234A, 234B & 234C of the Act having been paid till the date of filing of return of income i.e., original return on 30.12.2013, the AO cannot charge interest till the completion of reassessment as held by Hon’ble Supreme Court in the case of CIT vs. Pranoy Roy, [2009] 179 Taxman 53 (SC), wherein it is held as under:- “6. Since the tax due had already been paid which was not less than the tax payable on the returned income which was accepted, the question of levy of interest does not arise. Thus, we find no merit in this appeal and the same is dismissed.”
Similarly, assessee also argued that interest u/s.234C of the Act is always levied at the returned income and not assessed income and further, the due date for payment of advance tax is over and only one month interest is payable u/s.234C of the Act and as assessee has already paid interest u/s.234C of the Act at Rs.41,403/-, the additional levy of Rs.1,15,425/- is not in accordance with law. In view of these arguments, the ld.counsel for the assessee only argued that the AO has charged interest in mechanical way vide para 5 as under:- “5. In this case, the assessee did not file his return of income within the time allowed u/s 139 of the Act and the return of income was filed only on 30- 12-2013, which is a lodged return and non-est as per law. Accordingly, the interest u/s 234A, 234B and 234C are calculated in accordance with law.
5 ITA No. 2916/Chny/2019 Penalty proceedings u/s 271(1)(c) of the I.T. Act, 1961 is initiated separately, since the assessee did not file his return of income within the time allowed u/s 139 of the Act, even though he had taxable income for the instant year in view of Explanation 3 to that section. Demand Notice and tax computation sheet is enclosed.”
4.1 The ld.counsel further submitted that even the CIT(A) has not given any new finding on this and just simpliciter confirmed the action of AO. The ld.counsel only pleaded that let the AO examine the issue of chargeability of interest u/s.234A, 234B & 234C of the Act and thereafter, considering the legal position as enunciated by various decisions of High Courts and Supreme Court, the AO may decide the issue.
When these facts were confronted to ld.Senior DR, he only stated that the AO can consider the decision of Pranoy Roy, supra.
We, after hearing both the sides and going through the facts, set aside charging of interests u/s.234A, 234B & 234C of the Act back to the file of the AO with a direction to AO to decide in term of the provisions of Income-tax Act and legal position enunciated by various judgments, which the assessee will place before AO at the time of hearing. In term of the above, the orders of the lower
6 ITA No. 2916/Chny/2019 authorities are set aside and the matter is remanded back to the file of the AO.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the court on 14th December, 2022 at Chennai.
Sd/- Sd/- (महावीर �सह ) (मनोज कुमार अ�वाल) (MAHAVIR SINGH) (MANOJ KUMAR AGGARWAL) उपा�य� /VICE PRESIDENT लेखा सद�य/ACCOUNTANT MEMBER चे�ई/Chennai, �दनांक/Dated, the 14th December, 2022 RSR आदेश क� �ितिलिप अ�ेिषत/Copy to: 1. अपीलाथ�/Appellant 2. ��यथ�/Respondent 3. आयकर आयु� (अपील)/CIT(A) 4. आयकर आयु� /CIT 5. िवभागीय �ितिनिध/DR 6. गाड� फाईल/GF.