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Income Tax Appellate Tribunal, “G” BENCH, MUMBAI
Before: HON’BLE SHRI VIKAS AWASTHY, JM & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM
आयकर अपीलीय अधिकरण “ज़ी” न्यायपीठ म ुंबई में। IN THE INCOME TAX APPELLATE TRIBUNAL “G” BENCH, MUMBAI माननीय श्री विकास अिस्थी, न्यावयक सदस्य एवं माननीय श्री मनोज कुमार अग्रवाल ,लेखा सदस्य के समक्ष। BEFORE HON’BLE SHRI VIKAS AWASTHY, JM AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM (Hearing through Video Conferencing Mode) आयकरअपील सं./ (धििाारण वर्ा / Assessment Year: 2005-06) GTL Ltd. DCIT(LTU)-2 29th floor, Centre-1 412, Janmabhoomi Chambers, बिाम/ Vs. 29 Walchand Hirachand Marg, World Trade Centre, Ballard Estate, Mumbai-400 038 Mumbai-400 005 स्थायीलेखासं./ जीआइआरसं./ PAN/GIR No. AAACG-3742-L (अपीलाथी/Appellant) (प्रत्यथी / Respondent) : Assessee by : Shri Manish Shah– Ld. AR Revenue by : Shri T. S. Khalsa– Ld. Sr. DR सुनवाई की तारीख/ : 16/08/2021 Date of Hearing घोषणा की तारीख / : 15/09/2021 Date of Pronouncement आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member)
Aforesaid appeal by assessee for Assessment Year 2005-06 arises out of the order of learned Commissioner of Income-Tax (Appeals)-1, Mumbai [CIT(A)], dated 06/06/2019 in the matter of rectification order passed by Ld. AO u/s 154 on 05/06/2018.The ground read as under: - GROUND I: RECTIFICATION OF ASSESSMENT U/S 154 OF THE ACT IS VOID AB-INITIO : 1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in upholding the rectification order passed by the AO u/s 154 of the Act dated June 5, 2016.
2. The CIT(A) failed to appreciate and ought to have held that, rectification of assessment after a period of 4 years from the end of the financial year in which the order sought to be amended was passed, is ab-initio void.
3. The Appellant prays that it be held that rectification of assessment under section 154 of the Act is void ab-initio and/or otherwise bad-in-law. GROUND II: VIOLATION OF THE PRINCIPLES OF NATURAL JUSTICE:
1. 1. On the facts and circumstances of the case and in law, the CIT(A) erred in holding that the rectification made without giving an opportunity of being heard to the Appellant is valid.
2. The Appellant prays that it be held that rectification of assessment under section 154 of the Act is void ab-initio and/or otherwise bad-in-law. WITHOUT PREJUDICE TO GROUND NO. I AND II, GROUND III: WRONG COMPUTATION OF INTEREST U/S 234D: 1. On the facts and circumstances of the case in law, the Ld. CIT (A) erred in directing the Ld. AO to verify the facts and charge interest u/s 234D of the Act as per law instead of deleting the levy of interest u/s 234D of the Act.
2. The CIT(A) failed to appreciate and ought to have held that interest u/s 234D of the Act is not leviable since refund was never granted to the Appellant under section 143(1) of the Act.
3. The Appellant prays that interest under section 234D of the Act be deleted. GROUND IV: GENERAL The Appellant craves leave to add to, alter and / or amend all or any of the foregoing grounds of appeal.
The material facts are that an assessment was framed against the assessee for the year u/s 143(3) on 31/12/2008. Thereafter, a notice u/s 153A was issued on 27/06/2011 against which a return was filed by the assessee. However, the assessee filed application before Hon’ble Income Tax Settlement Commission (ITSC). The effect of order of Hon’ble ITSC was given on 31/12/2013 wherein the income was determined at Rs.15.94 Crores under normal provisions and at Rs.46.92 Crores u/s 115JB of the Act. The assessee pointed out that while passing this order, interest u/s 234D was wrongly charged and interest u/s 244A was not allowed to the assessee although the same was already allowed by the department while issuing refund previously. Accordingly, the assessment was rectified u/s 154 on 11/06/2014 and refund was issued to the assessee.
However, Ld. AO made another rectification since it was seen that interest u/s 244A was granted in excess to the extent of Rs.1.39 Lacs. It was also noted that interest u/s 234D was wrongly charged. Accordingly, the assessment was again rectified vide order dated 05/06/2018 wherein correct computations were made and a demand of Rs.3.50 Lacs was raised against the assessee. The computations have been given in para- 6 of rectification order dated 05/06/2018. Aggrieved, the assessee preferred further appeal before Ld. CIT(A).
During appellate proceedings, the assessee submitted that since order giving effect to Hon’ble ITSC order was passed on 31/12/2013, the rectification order passed u/s 154 on 05/06/2018 was barred by limitations since the order could be rectified only within a period of 4 years from the end of financial year in which order sought to be rectified has been passed which would be 31/03/2018. The assessee also submitted that opportunity of hearing was not granted to the assessee before rectifying the order. 5. However, Ld. CIT(A) noted that Ld. AO has referred to order passed u/s 154 on 11/06/2014 and counted from this date, rectification order passed u/s 154 on 05/06/2018 is within the period of 4 years. Further non-grant of hearing would not render the order as bad in law for the reason that in the consequent appellate proceedings, opportunity of hearing has been granted to the assessee. Therefore, the plea raised by the assessee was to be rejected. 6. On merits, the assessee contended that there could not have been any levy of interest u/s 234D when refund was never granted to the assessee. Further, Ld.AO did not grant interest u/s 244A for month in which refund was determined. Accepting the same, Ld.AO was directed