MR. NARENDRA KUMAR PASUPATHY,BANGALORE vs. DEPUTY COMMISSIONER OF INCOME TAX OFFICER, CIRCLE-7(2)(1), BANGALORE

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ITA 1989/BANG/2017Status: DisposedITAT Bangalore17 July 2019AY 2007-083 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the CIT(A)'s direction to give consequential relief on the levy of interest under section 234B was in accordance with law. The assessee's grievance regarding the manner of charging interest should be raised against the AO's order giving effect to the CIT(A)'s order.

What were the facts?

The assessee entered into a Joint Development Agreement for his property. Long Term Capital Gain on sale of the property was brought to tax during reassessment proceedings. The assessee challenged the levy of interest under section 234B.

What were the issues?

Whether the levy of interest under section 234B is mandatory and how grievances regarding its calculation should be addressed.

Which sections of the Income-tax Act were involved?

Section 234B,Section 147

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, “A” BENCH : BANGALORE

Before: SHRI N.V. VASUDEVAN & SHRI JASON P. BOAZ

For Appellant: Smt. Soumya, Advocate
For Respondent: Shri Vikas Suryavamshi, Addl.CIT(DR)(ITAT), Bengaluru
Hearing: 15.07.2019Pronounced: 17.07.2019

Date of hearing : 15.07.2019 Date of Pronouncement : 17.07.2019 O R D E R Per N V Vasudevan, Vice President

This is an appeal by the Assessee against the order dated 14.8.2017 of CIT(Appeals)-7, Bengaluru, relating to assessment year 2007-08.

2.

The grounds of appeal raised by the Assessee reads thus:-

“1. The learned CIT (A) erred in passing the order in the manner he did. 2. The learned CIT (A) erred in levying the interest u/s 234B of the Act.

3.

The learned CIT (A) has also grossly erred in not considering the provisions of sub section(3) of section 234B which is abundantly clear that on the re-assessment that the interest has to be charged from the date of the original order i.e.,143(1) and learned CIT(A) ought to have appreciated that in the absence of the order, the AO should have charged from the Date of Assessment order.

4. For these and other grounds that may be urged at the time of hearing of the Appeal, the Appellant prays that the appeal may be allowed.” 3. The Assessee is an individual. He owned properties Basavanapura Village, Krishnarajapuram Hobli, Bangalore East Taluk. He entered into a Joint development Agreement (JDA) with a developer. In the reassessment proceedings u/s.147 of the Income Tax Act, 1961 (the Act), the Long Term Capital Gain on sale of the property was brought to tax and the action of the AO was confirmed by the CIT(A). In the appellate order, the Assessee had challenged the levy of interest u/s.234-B of the Act. That ground of appeal was held by the CIT(A) to be purely consequential and directed the AO to give consequential relief. Against such a direction of the CIT(A), the Assessee has preferred the present appeal before the Tribunal.

4.

We have heard the submission of the learned counsel for the Assessee, who reiterated the stand of the Assessee as reflected in the grounds of appeal

filed before the Tribunal. We are of the view that the stand taken by the Assessee in the grounds of appeal is unsustainable because the direction of the CIT(Appeals) holding that levy of interest u/s.234-B is consequential, is a direction which is in accordance with law. If at all the Assessee has any grievance on the manner of charging of interest u/s.234-B of the Act, he can do so only against the order of the AO giving effect to the order of the CIT(Appeals). Otherwise, the law is well settled that levy of interest is mandatory as held by the Hon’ble Supreme Court in the case of CIT Vs. Anjum M.H. Ghaswala & Ors., 252 ITR

1. (SC). We therefore find no merit in this appeal by the Assessee and accordingly dismiss the same.

5.

In the result, appeal by the Assessee is dismissed Pronounced in the open court on this 17th day of July, 2019.

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