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Facts
The assessee filed its return of income, which was processed, and a disallowance under Section 36(1)(va) r.w.s. 224 led to a demand including interest under Sections 234A and 234B. The assessee filed a rectification application under Section 154, which resolved most issues except for the charging of interest under Section 234A.
Held
The Tribunal observed that the assessee had discharged its tax liability. The primary issue was whether the interest charged under Section 234A by CPC Bengaluru was correctly calculated, as it appeared the CPC did not consider the taxes paid up to 31.10.2020. The assessee's computation sheet was found to be correct but was not considered by the CPC or the CIT(A).
Key Issues
Whether the interest charged under Section 234A of the Income Tax Act, 1961, was correctly calculated by the CPC, considering the taxes paid by the assessee.
Sections Cited
250, 234A, 36(1)(va), 224, 234B, 154, 139(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCH “C”, MUMBAI
Before: SHRI GAGAN GOYAL & SHRI SUNIL KUMAR SINGH
This appeal by assessee is directed against the order of National Faceless Appeal Centre (for short “NFAC”) dated 29.07.2023 passed u/s. 250 of the Income Tax Act, 1961 (in short ‘the Act’) for A.Y. 2020-21. The assessee has raised the following grounds of appeal:-
Oriental Electrical Components Pvt. Ltd.,
Ld. Commissioner of Income-Tax (Appeals) erred in law and on facts in not granting sufficient opportunity of being heard to the Appellant before adjudicating the appeal against the Appellant without application of mind.
Appellant submits that in view of the facts and circumstances of the case as well as in law the said order of Ld. CIT (A) is bad in law and deserves to be quashed,
Ld. Commissioner of Income-Tax (Appeals) erred in confirming the order of Learned Assessing Officer charging excessive interest u/s. 234A of the Act.
Appellant submits that in view of the facts and circumstances of the case as well as in law the said order of Ld. CIT (A) confirming the excessive interest charged u/s. 234A of the Act is bad in law and deserves to be quashed.
Appellant prays for appropriate relief.
Each of the above ground is without prejudice to one another.
Appellant craves leave, to add, alter, amend or withdraw any of the above Grounds of Appeal.
2. The Brief Facts of the Case are that Assessee is a Company filed its return of income on 15.02.2021 declaring total income at Rupees 14, 65, 76,650/-. The return of the Assessee processed under section 143(1)(a) of the Act on 23.12.2021, wherein a sum of Rs. 54,97,424/- was disallowed under section 36(1)(va) r.w.s. 224 of the Act resulting in a demand of Rs 2,18,50,080/- including interest under section 234A and 234B of the Act. The Assessee being aggrieved filed an application under section 154 of the Act raising various issues before the Centralized Processing Centre (CPC), Bengaluru. The CPC Bengaluru passed a rectification order under section 154 of the Act vide dated 15.07.2022. The CPC
Oriental Electrical Components Pvt. Ltd., Bengaluru resolved the grievances of the Assessee except charging of interest under section 234A.
The Assessee being further aggrieved preferred an appeal before the Ld. CIT (Appeal), National Faceless Appeal Centre-Delhi (NFAC). The Ld. CIT (Appeal) vide his order dated 29.07.2023 confirmed the levy of interest under section 234A of the Act. The Assessee being aggrieved with this order preferred the present appeal before us. We have gone through the order passed under section 154 of the Act, order of the Ld. CIT Appeal and submissions of the Assessee alongwith grounds taken before us. It is observed that Assessee had discharged the whole tax liability while filed its return of income originally under section 139(1) of the Act vide dated 15.02.2021. The only issue before us is whether the amount of interest charged by CPC Bengaluru under section 234A is correctly worked out or not. We observed that there is no gap between the claims of the Assessee about payment of taxes vis-à-vis accepted by the CPC- Bengaluru. The only gap is that the CPC-Bengaluru did not consider the amount of taxes paid till 31.10.2020 and time also. We have observed the computation sheet furnished by the Assessee vide Pg. 9 of the Paperbook and found the same to be correct. But this calculation of the Assessee has not been considered by neither CPC Bengaluru or by the Ld. CIT Appeal.
In these circumstances and facts on record we restore the matter back to the file of Ld. CIT Appeal with the direction that a fresh hearing or being heard to be given to the Assessee on the issue of charging of Interest keeping in view the ratio laid down by the Hon’ble Gujarat High Court in the case of Bharatbhai B.
Oriental Electrical Components Pvt. Ltd., Shah versus Income-Tax Officer: (2013) 355 ITR 373 and the Hon’ble Delhi High Court in the case of Dr. Prannoy Roy (2002) 254 ITR 755 (Del.)
In the result, appeal of the assessee is allowed for statistical purposes.