JACOB THOMAS,KOZHENCHERRY vs. ACIT, THIRUVALLA RANGE, THIRUVALLA

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ITA 132/COCH/2024Status: DisposedITAT Cochin14 May 2025AY 2017-2018Bench: SHRI INTURI RAMA RAO (Accountant Member), SHRI SOUNDARARAJAN K. (Judicial Member)4 pages

AI SummaryDismissed

Facts

The assessee filed an income tax return for AY 2016-17. The assessment was completed with significant additions under Sections 37 and 68, resulting in a higher total income. The AO initially did not charge interest under Section 234B but later issued a notice under Section 154 to levy this interest. The assessee's objection, citing exemption for senior citizens from advance tax under Section 207(2) and pending appeal on additions, was rejected by the AO and confirmed by the CIT(A).

Held

The Tribunal held that the levy of interest under Section 234B is automatic and mandatory, as per the Supreme Court ruling in CIT v. Anjum MH Ghaswala. The AO's failure to levy this mandatory interest in the original assessment constituted a mistake apparent from record, rectifiable under Section 154. Therefore, the AO was justified in levying the interest.

Key Issues

Whether the AO was justified in exercising jurisdiction under Section 154 to levy interest under Section 234B, which was omitted in the original assessment, and whether such an omission constitutes a mistake apparent from record rectifiable under Section 154 or a debatable issue.

Sections Cited

37, 37(1), 68, 143(3), 154, 207, 207(2), 234B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, COCHIN BENCH

Before: SHRI INTURI RAMA RAO, AM & SHRI SOUNDARARAJAN K., JM

For Appellant: Shri Rajakannan, Advocate

For Respondent: Shri Sanjit Kumar Das, CIT-DR

Hearing: 20.03.2025Pronounced: 14.05.2025

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH BEFORE SHRI INTURI RAMA RAO, AM AND SHRI SOUNDARARAJAN K., JM ITA No. 132/Coch/2024 Assessment Year: 2016-17 Jacob Thomas .......... Appellant 1, Mulamoottil, Kozhencherry 689641 [PAN: ACKPT3269L] vs. ACIT, Ward-1 & TPS, Thiruvalla .......... Respondent Appellant by: Shri Rajakannan, Advocate Respondent by: Shri Sanjit Kumar Das, CIT-DR Date of Hearing: 20.03.2025 Date of Pronouncement: 14.05.2025 O R D E R Per: Inturi Rama Rao, AM This appeal filed by the assessee is directed against the order of the National Faceless Appeal Centre, Delhi [CIT(A)], dated 27.12.2023 for Assessment Year (AY) 2016-17.

Brief facts of the case are that the appellant is an individual. The return of income for AY 2016-17 was filed on 17.10.2016 declaring income of Rs. 37,97,390/-. Against the said return of income, the assessment was completed by the ACIT, Ward -1, Thriuvalla (hereinafter called "the AO") vide order dated 21.12.2018

2 ITA No. 132/Coch/2024 Jacob Thomas passed u/s. 143(3) of the Income Tax Act, 1961 (the Act) at a total income of Rs. 5,42,39,544/-. While doing so, the AO made disallowance of Rs. 5,04,42,154/- u/s. 37 and 68 of the Act. While completing the assessment the AO had not charged interest u/s. 234B of the Act and determined the tax liability. Therefore, the AO issued notice u/s. 154 of the Act dated 26.08.2019 proposing to levy interest u/s. 234B of the Act. In response to the notice u/s. 154 the appellant submitted that the disparity between the declared income and assessed income was on account of addition made u/s. 37(1) of the Act which are subject matter of appeal before the CIT(A). It is submitted that since senior citizens are exempt from payment of advance tax, therefore no liability to pay advance tax in terms of provisions of section 207(2) of the Act. On due consideration of the above submissions, the AO held that since he is having income from business or profession, additions to the returned income were made under the head ‘profits and gains of business’ the appellant is liable to pay interest u/s. 243B of the Act. Accordingly rejected the submissions and charged interest of Rs. 45,74,262/- u/s. 234B of the Act vide order dated 29.06.2021 passed u/s. 154 r.w.s. 143(3) of the Act.