DEEP WATER SERVICES (INDIA) LTD,MUMBAI vs. DCIT RG 6(2), MUMBAI

PDF · subscribers
ITA 847/MUM/2015Status: DisposedITAT Mumbai30 October 2017AY 2010-114 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 levy of interest under Section 234C is statutory and mandatory. Finding no illegality or infirmity in the levy, the appeal was dismissed.

What were the facts?

The assessee challenged the levy of interest under Section 234C for deferment of advance tax. The Assessing Officer charged interest of Rs. 12,21,047/- on a deferred first installment of Rs. 4,00,00,000/-.

What were the issues?

Whether the interest levied under Section 234C for deferment of advance tax was justified and correctly computed.

Which sections of the Income-tax Act were involved?

Section 234C,Section 143(3),Section 254(1),Section 253

AI-generated summary — verify with the full judgment below

PER PAWAN SINGH, JUDICIAL MEMBER:

1. This appeal by assessee u/s 253 of the Income-Tax Act (“The Act”) is directed against the order of ld. CIT(A)-12, Mumbai dated 05.11.2014 for Assessment Year (AY) 2010-11. The assessee has raised the following grounds of appeal:

1.

The learned Commissioner of Income Tax (Appeals) erred in not adjudicating the appeal filed before him.

2.

The Assessing Officer erred in levying interest under section 234C of Rs.12,21,073/-. 3. The Appellant denies its liability to interest under section 234C levied for deferment of first instalment of advance tax. 4. The Assessing Officer erred in holding that the Appellant has deferred the payment of first advance tax instalment of Rs 4,00,00,000/- and levying interest under section 234C.

- Deep Water Services (India) Ltd.

5.

The Appellant submits that the interest levied under section 234C is highly excessive and needs to be reduced considerably.

6.

Without prejudice to ground no. 2 to 4, the Appellant submits that the levy of interest under section 234C should have been restricted to that leviable for one day.” 2. Brief facts of the case are that the assessee filed return of income for relevant AY on 24.09.2010 declaring total income of Rs. 82,53,54,480/-.

The assessment was completed on 14.03.2013 u/s 143(3) of the Act accepting the return income. The interest was charged in accordance with the provision of section 234A, 234B & 234C of the Act. The assessee filed appeal before the ld. CIT(A) raising the grounds of appeal that the Assessing Officer (AO) erred in levying the interest u/s 234C for deferment of first installment of advance tax of Rs. 4,00,00,000/-. The plea of assessee was not accepted and the appeal of the assessee was dismissed. Thus, further aggrieved by the order of ld. CIT(A), the assessee has filed the present appeal before us.

3. None appeared on behalf of assessee despite repeated call. The assessee is not appearing before this Tribunal despite the service of notices. Having left no option, we heard the ld. Departmental Representative (DR) for the Revenue and proceeded to decide the appeal on the basis of material available on record. The ld. DR for the Revenue argued that the appeal of the assessee is not maintainable as the assessee challenged the validity of statutory interest charged u/s 234C of the Act. - Deep Water Services (India) Ltd.

4. We have considered the submission of ld. DR for the Revenue and perused the material available on record. The perusal of the assessment order reveals that the assessment order was passed accepting the declared income of the assessee. Accordingly, the AO charged interest u/s 234A, 234B & 234C of the Act. The assessee challenged the levy of interest u/s 234C on the ground that the AO erred in charging the interest on deferred payment of first installment of Rs. 4,00,00,000/-. The AO charged the interest of Rs.12,21,047/- on such deferred payment of first installment of advance tax.

We have seen that before the ld. CIT (A) the assessee furnished statement of facts. In the statement of facts the assessee contended they gave instructions to their banker i.e. ABN AMRO Bank on 15.06.2009 for payment of advance tax the Bank executed their instruction on 16.05.2009. The ld CIT(A) dismissed the appeal of the assessee holding that the dispute cannot be adjudicated as the contention of assessee is not emanating from the order of assessing officer. The levy of interest is consequential. The ld CIT(A) granted liberty to the assessee to approach the AO if they have any grievance to the incorrect computation of interest under section 234C of the Act. None, appeared before us on behalf of assessee nor substantiated the contention raised in the appeal nor filed any written submissions to substantiate their contention. We have seen that the levy of interest is mandatory / statutory in nature. The levy of interest seems to be in accordance with the provisions of law. No contrary material is available on 3 Deep Water Services (India) Ltd. record to take different view than the statutory provision. Thus, we do not find any illegality or infirmity in levying the interest u/s 234C of the Act.

Hence, the appeal of the assessee is dismissed. However, the assessee is granted liberty to approach the AO if they have any grievance to the incorrect computation of interest under section 234C of the Act. 5. In the result, appeal filed by the assessee is dismissed.

More judgments on Section 234C

All 6,043 judgments and leading authorities on Section 234C →

Recent GST High Court judgments

Search GST case law →