GROWMORE RESEARCH & ASSESTS MGT LTD,MUMBAI vs. ASST CIT CEN CIR 31 CIR 7, MUMBAI

The appeal filed by the assessee is barred by limitation by 338 days. The assessee has moved an application seeking the bench to condone the delay. In the affidavit, it is stated that the delay has mainly caused for the reason that the Custodian of the company caused delay in releasing the funds required for payment of appeal fee. The Ld A.R submitted that delay in filing of appeals before the Tribunal has occurred in other group cases also for identical reasons. The SMC bench of Tribunal has considered this limitation issue in the case of Orion Travels P Ltd vs. DCIT (ITA No.1005/Mum/2017 and others dated 11.09.2017) and the Tribunal has expressed the view that the delay has 2 Growmore Research & Assets Management Ltd. occurred for the reasons beyond the control of the assessee. Accordingly the Tribunal has condoned the delay.

The Ld D.R, on the contrary, strongly opposed the petition filed by the assessee. He submitted that the assessee is aware of the disruptions and difficulties since the day their business got suspended in 1992. Hence these assessees should have taken enough precaution to get funds for filing of appeal.

Having heard rival contentions on this preliminary issue, we are of the view that there is sufficient cause for filing the appeal belatedly before the Tribunal. Accordingly we condone the delay and admit the appeal for hearing.

The facts relating to the above said issues are discussed in brief. The assessee company belongs to Harshad Mehta Group. The assessment for the year under consideration was completed in the hands of the assessee on 25.11.2011. Subsequently, the AO noticed that the interest u/s 234A of the Act has been charged only for 17 months instead of 18 months resulting in short charging of Rs.14,36,238/-. The AO also noticed that there was difference between interest income offered by the assessee and the interest disclosed in the TDS certificates to the tune of Rs.45,30,056/-, which was omitted to be assessed. Hence the AO initiated rectification proceedings u/s 154 of the Act. Since there was no response from the assessee to the notice issued by the AO, he passed the rectification order by assessing difference amount of interest income, referred above and also by charging interest u/s 234A for 18 months. The Ld CIT(A) also confirmed the same and hence the assessee has filed this appeal.

The Ld A.R submitted that the assessee has also challenged the original assessment order up to the level of Tribunal and the ITAT, vide its order dated 04-03-2015 passed in has restored, inter alia, the matter relating to charging of interest u/s 234A to the file of the Ld CIT(A) for 3 Growmore Research & Assets Management Ltd. examining it de-nova. Accordingly he submitted that the grievance of the assessee may be redressed in the above said set aside proceedings. Accordingly he submitted that the issue urged on charging of interest u/s 234A of the Act does not require fresh adjudication.

We heard Ld D.R on this issue. In view of the facts narrated by Ld A.R, we are of the view that the issue urged on charging of interest u/s 234A does not require adjudication, since the same shall be addressed by Ld CIT(A) in the set aside proceedings of quantum appeal.

With regard to the assessing of interest income, the Ld A.R furnished a chart showing the difference between the income declared by the assessee and that was shown in the TDS certificates. He submitted that the interest difference might have been declared by the assessee in the succeeding year. Accordingly he contended that the assessment of difference interest income in this year would result in double assessment of same income.

On the contrary, the Ld D.R submitted that the income pertaining to the year under consideration should be assessed in this year only.

Having heard rival submissions, we find merit in the submissions of Ld D.R. Since the assessee is following mercantile system of accounting, the income pertaining to the year under consideration should be assessed in this year only and cannot be assessed in any other year. In any case, the claim of the assessee requires verification at the end of the assessing officer. Accordingly we set aside the order passed by Ld CIT(A) on this issue and restore the same to the file of the assessing officer for examining the claim of the assessee. If it is found that the income pertaining to AY 2009-10, if any, has been offered by the assessee in any of the succeeding year, the AO is directed to exclude the same in that succeeding year.

In the result, the appeal filed by the assessee is treated as allowed. Order has been pronounced in the Court on 4.7.2018.