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Income Tax Appellate Tribunal, DELHI BENCHES: ‘F’, NEW DELHI
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES: ‘F’, NEW DELHI BEFORE SHRI G.D.AGRAWAL, PRESIDENT AND SMT. BEENA A PILLAI, JUDICIAL MEMBER Pure Diets India Ltd. ACIT, Circle 20(1) 4E Uppal Plaza, M-6 vs. New Delhi Jasola Dist. Centre New Delhi 110 025 PAN: AADCP 8352 Q (Appellant) (Respondent) Appellant by Sh. Rajesh Malhotra, FCA Respondent by Shri Atiq Ahmad, Sr.D.R. Date of Hearing 20/12/2017 Date of Pronouncement 28/12/2017 ORDER
PER BEENA A PILLAI, JUDICIAL MEMBER
The present appeal has been filed by assessee against order dated 14/07/16 passed by Ld.CIT(A)-7, New Delhi for Assessment Year 2013-14 on the following grounds of appeal:
1. The Ld. CIT(A) has erred in law & facts by not considering a detailed interpretation of section 234A as given in the judgment in case of Dr. Prannoy Roy given by Delhi H.C. - (2002) 121 Taxman 314 (Delhi) & upheld by Apex Court vide (2009) 179 taxman 53(SC) in view of Rule of beneficial construction & rule of purposive construction etc.
ITA 5070/Del/2016 Assessment Year 2013-14 Pure Diets India Ltd. The main crux of the above judgment is to interpret & treat the interest u/s 234A as compensatory in nature & not to penalize or punishing for delayed submission of return as no one can read a penal provision in section 234A of the IT. Act. Further, in Roshanlal Kapoor v. Assistant Commissioner of Income- tax [2008] 26 SOT 26 (Chennai) (URO)(SMC) ITAT CHENNAI BENCH ('B') (SMC), the Hon'ble bench has given the relief, placing reliance on above judgment, even in case, the tax u/s 140A has been deposited after the due date of filing of ITR.
2. Charging of interest u/s 234A by the Assessing Officer beyond the date of deposit of self assessment tax and confirmation of the same by the CIT(A) is contrary to facts, law and is against the principles of natural justice and therefore the interest charged beyond the date of deposit of self asstt. tax amounting to RS.20,96,404/- is liable to be deleted.
3. Charging of interest u/s 234B of Rs.3,35,424/- by the Ld. A.O. treating interest charged u/s 234A of Rs. 20,96,404/- as 'assessed tax' and computing interest u/s 234B on such assessed tax and confirmation of the same by CIT(A) is contrary to fats and laws and therefore is liable to be deleted. The appellate craves for any addition, modification, deletion of grounds of appeal if find necessary during the course of appeal.”
Brief facts of the case are as under: Assessee is in receipt of intimation under section 143(1) dated 19/04/15 wherein interest under section 234 A & B has been computed at Rs.20,96,404/- and Rs.3,35,424/-respectively, vis-à- vis Rs.1,90,580/- and Rs.17,15,238/- computed by assessee in the return filed on 29.11.2014. Ld.AR submitted that assessee was required to file its return for the year under consideration by 30/11/13 whereas the return was filed on 29/11/14 that is after ITA 5070/Del/2016 Assessment Year 2013-14 Pure Diets India Ltd. 12 months from the due date. He submitted that the self assessment tax for the year under consideration as per the return of income was deposited on 30/12/13, along with interest under section 234A at Rs.1,90,580/- computing delay of one month. Ld.A.R. submitted that though the returned income was accepted by Ld. AO vide order dated 19.04.2015. Ld. AO enhanced interest under section 234A at Rs.22,86,984/- and computed interest u/s 234B at Rs.20,50,662/-. 2.1. Ld.AR attempted to propose before this Tribunal that interest levied under section 234A is not to penalise for delay in filing of return but is compensatory in nature to compensate the revenue for having not paid the self assessment tax. 2.2. In respect of the interest levied under section 234B, Ld.AR submitted that assessing officer treated the interest computed under section 234A as assessed tax for the purposes of section 234B and charged Rs.3,35,424/-as additional interest, under section 234B. He has summarised the entire addition made by assessing officer as under.: (i) u/s 234A additional interest for 11 Rs.20,96,404.00 months @ Rs.1,90,580/- p.m. (ii) u/s 234B additional interest @ Rs.3,35,424.00 Rs.20964/- pm from 1.1.2014 to 30.4.2015 (16 months) considering above enhancement of interest u/s 234A as ‘assessed tax’ for the purpose of s.234B Total of demand raised as per Rs.24,31,828.00 Intimation u/s 143(1)
ITA 5070/Del/2016 Assessment Year 2013-14 Pure Diets India Ltd. The Ld.AR placed reliance upon the following decisions in support of his submissions. • Hon’ble Supreme Court in the case of CIT versus Pranoy Roy (supra); • Roshan Lal Kapoor versus ACIT reported in (2007) 108 TTJ 740 (Chennai); • CBDT Circular No. 549 dated 31/10/89 2.3. On the contrary Ld.DR placed reliance upon the order passed by authorities below and relevant Provisions of the Act.
We have perused the submissions advanced by both the sides in the light of the decisions relied upon by Ld.AR and the records placed before us and relevant section applicable to assessee for the relevant period. 3.1. Ld.AR primarily placed reliance upon the decision of Hon’ble Supreme Court in the case of CIT vs. Pranoy Roy (supra) and CBDT Circular No. 549 dated 31/10/89. 3.2. The 1st issue relates to enhancement of interest under section 234A of the Act. 3.3. The contention of Ld.AR was that assessee is not liable to pay interest as, it has paid the assessment tax though belatedly (by 1 month) before the filing of return, which included interest u/s 234A at 1% of taxable income (which has been computed by taking into consideration 1 month delay only). On the other hand Ld.D.R. contends that interest under section 234 A is chargeable for default ITA 5070/Del/2016 Assessment Year 2013-14 Pure Diets India Ltd. in filing of original return on due date which does not stop with the payment of self assessment tax.
3.4. Relevant provisions applicable to the facts before us are as under: (i) Section 234 A : Interest payable for default in furnishing the return of income. Where the return of income for any assessment year is furnished after the due date or is not furnished, assessee shall be liable to pay simple interest at the rate of one per cent for every month or part of a month for the period commencing on the date immediately following the due date upto the date of furnishing the return (in cases where return is furnished after the due date) or upto the end of the Assessment Year (in cases where no return is furnished) on the amount of shortfall in total income tax payable by the assessee. 3.5. On perusal of the order dated 19/04/15 it is observed that due date of filing the original return was 30/11/13 whereas assessee filed the return on 29/11/14 thereby causing a delay of 12 months. By applying Section 234A, in our considered opinion, assessee is liable to pay interest under section 234A for the period commencing on the date immediately following the due date upto the date of furnishing the return (in the present case return is furnished after the due date) at one percent per month.
ITA 5070/Del/2016 Assessment Year 2013-14 Pure Diets India Ltd. 3.6. We have carefully perused the decision of Hon’ble Supreme Court in the case of CIT vs. Pranoy Roy (supra) in the light of the provisions under section 234A of the Act. In our opinion Hon’ble Supreme Court decided in the said case that where the return was filed late but due tax has been paid before the due date of filing of return interest under section 234A would not be leviable as tax due had already been paid which was not less than tax payable on returned income which was accepted. Subsequently CBDT came out with a circular No. 2/2015 dated 10/02/15, following decision of Hon’ble Supreme Court, wherein it has been intimated that no interest under section 234A was chargeable on the amount of self-assessment tax paid before the due date of filing of return of income. 3.7. In the present facts of the case, admittedly self-assessment tax has been paid with a delay of one month, after the due date of filing of return. In our considered opinion non-fulfillment of precondition culls out assessee’s case from the protection granted by the Hon’ble Supreme Court in the case of CIT vs. Pranoy Roy (supra) and CBDT Circular No. 2/2015. In our considered opinion the ratio of Hon’ble Supreme Court does not come to the rescue of assessee at all. 3.8. We therefore confirm the interest computed by Ld. AO under section 234A.
The 2nd issue is in respect of levy of interest under section 234B.
ITA 5070/Del/2016 Assessment Year 2013-14 Pure Diets India Ltd. Relevant Legal Provisions applicable to the facts of present case: (ii) Section 234 B : Interest payable for default in payment of advance tax An assessee who is liable to pay advance tax has failed to pay such tax or where the advance tax paid by such assessee is less than ninety per cent of the assessed tax, the assessee shall be liable to pay simple interest at the rate of one per cent for every month or part of a month for period from the date on which the payment of advance tax became due on the amount of shortfall in the amount of advance tax paid. 4.1. In our opinion section 234B is applicable where assessee fail to deposit advance tax or the advance tax deposited is less than 90% of the taxable income. In the present case Assessee admittedly has not deposited advance tax for any of the three quarters. 4.2. Therefore in our considered opinion assessee is liable to interest under section 234B at 1% for every month starting from 1st day of financial year relevant to the assessment year from 01/04/13 to 29/11/14. 4.3. On perusal of order dated 19.4.2015, we observe that Ld.AO computed interest u/s 234B at Rs.3,35,424/-. 4.4. We therefore do not find any infirmity in the order of Ld.CIT(A) and confirm the same. Accordingly the grounds raised by assessee stand dismissed.
ITA 5070/Del/2016 Assessment Year 2013-14 Pure Diets India Ltd. 5. In the result appeal filed by assessee stands dismissed. Order pronounced in the open court on 28/12/2017. Sd/- Sd/- (G.D.AGRAWAL) (BEENA A PILLAI) President Judicial Member Dated: 28th December, 2017.