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Facts
The assessee filed an appeal against an order that levied interest under Section 234C of the Income Tax Act. The assessee contended that the return of income was accepted and no interest was leviable as per the original assessment and subsequent rectification order. The Assessing Officer (AO) had levied interest under Section 234C in the assessment order passed under Section 147 read with Section 143(3).
Held
The Tribunal noted that the AO admitted a mistake in levying interest under Section 234C. It was observed that the returned income was accepted, and no interest under Section 234C was leviable. Therefore, the AO was directed to delete the interest charged under Section 234C and recompute interest under Sections 234D and 244A.
Key Issues
Whether interest under Section 234C of the Income Tax Act was rightly levied by the Assessing Officer when the returned income was accepted and no income was liable to be taxed.
Sections Cited
234C, 143(1), 154, 147, 143(3), 234D, 244A
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Income Tax Appellate Tribunal, “SMC” BENCH KOLKATA
Before: SHRI GEORGE MATHAN
O R D E R This is an appeal filed by the assessee against the order dated 08.07.2025 passed by the ld.Addl/JCIT(A)-7, Delhi for the assessment year 2015-2016.
It was submitted by the ld.AR that the return of income has been accepted and consequently no interest u/s.234C of the Act was directed to be levied. Ld.AR drew my attention to the intimation issued u/s.143(1) of the Act and the order passed u/s.154 of the Act thereon wherein the interest u/s.234C of the Act has been taken at zero. It was the submission that in the impugned assessment order u/s.147 r.w.s.143(3) of the Act also the returned income which is identical to the income originally declared also clearly shows that no interest u/s.234C of the Act liable to be levied. It was the submission that the ld. JCIT(A) made a mistake of assuming that the appeal is against the application filed u/s.154 of the Act and on the ground 2 that the order u/s.154 of the Act has been passed on 13.12.2013 and in the said order no interest u/s.234C of the Act has been levied, dismissed the appeal of the assessee. It was the submission that the order u/s.154 of the Act was admittedly passed on 13.12.2013 but the order u/s.147 of the Act was passed on 27.12.2219 wherein the interest u/s.234C of the Act to the extent of Rs.96,760/- has been levied on the assessee. It was the submission that no levy of interest u/s.234C of the Act is called for.
In reply, ld.Sr. DR admitted that there is a mistake on the part of the ld.AO in levying interest u/s.234C of the Act.
I have considered the rival submissions. As it is noticed that in the order passed u/s.147/143(3) of the Act on 27.12.2019, the returned income has been accepted and it is noticed that the return has also been filed originally in time, admittedly, no interest u/s.234C of the Act is leviable insofar as no income is liable to be taxed for the impugned assessment year. This being so, the AO is directed to delete the interest charged u/s.234C of the Act. The AO is also directed to recompute the interest charged u/s.234D and 244A of the Act.
In the result, appeal filed by the assessee stands allowed. Order dictated and pronounced in the open court on 12/01/2026. (जाजज माथन) (GEORGE MATHAN) न्यानयक सदस्य / JUDICIAL MEMBER कोलकाता Kolkata; ददनाांक Dated 12/01/2026 Prakash Kumar Mishra, Sr.P.S.