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Income Tax Appellate Tribunal, “F” Bench, Mumbai
Before: Shri B.R. Baskaran (AM) & Shri Ravish Sood(JM)
O R D E R Per B.R. Baskaran (AM) :-
The assessee has filed this appeal challenging the order dated 17-12- 2015 passed by Ld CIT(A)-47, Mumbai and it relates to the assessment year 2010-11. The assessee is aggrieved by the decision of Ld CIT(A) in confirming the charging of interest u/s 234A of the Act.
We heard the parties and perused the record. The assessee belongs to Arya group, which was subjected to search u/s 132 of the Act on 29.4.2011. Consequent thereto, the present assessment was completed u/s 143(3) r.w.s. 153A of the Act. In the assessment order, the AO levied interest u/s 234A of the Act for belated filing of return to the tune of Rs.2,60,223/-. The assessee was originally asked to file return of income by notice dated 02-05-2012 (received on 04-05-2012) within 30 days of receipt of notice. The assessee sought time to file return up to 18-06-2012 and again sought time up to 25.06.2012. The AO did not respond to the same and in the assessment order, the assessing officer charged interest u/s 234A of the Act for belated filing of return of income. Thereafter, the assessee moved an application u/s 154 of 2 M/s. M.P. Recycling Co. Pvt. Ltd.
the Act requesting the AO to reduce the interest u/s 234A of the Act on the plea that the assessee has filed return of income within the extended period. The AO rejected the petition by observing that the request of the assessee for extension of time was disposed of by the order sought to be rectified and assessee was bound to file return within the period specified in the notice.
The assessee preferred appeal before Ld CIT(A) challenging the rectification order. The Ld CIT(A) expressed the view that the provisions of sec. 153A do not give power to AO to extend the time limit and accordingly confirmed the interest charged u/s 234A of the Act, as charging of interest is mandatory. Aggrieved, the assessee has filed this appeal.
The Ld A.R submitted that the assessee has paid self assessment tax before the due date of filing of return of income and the same should be considered while calculating interest u/s 234A of the Act. In this regard, he placed reliance on the Circular No.2/2015 (F No.385/03/2015-IT(B) dated 10- 02-2015 issued by the CBDT, wherein it was decided as under:-
“3. The Board has decided that no interest under section 234A of the Act is chargeable on the amount of self assessment tax paid by the assessee before the due date of filing of return of income”
We notice that the CBDT has followed the decision rendered by Hon’ble Supreme Court in the case of CIT Vs. Prannoy Roy (309 ITR 231). Accordingly, the Ld A.R prayed that the AO may be directed to re-compute the interest u/s 234A of the Act in accordance with the Circular referred above.
We heard Ld D.R, who submitted that the charging of interest u/s 234A is mandatory.
Having heard rival submissions, we are of the view that the issue relating to charging/computation of interest u/s 234A requires fresh examination at the end of the AO, as the assessee contends that the self assessment tax paid by it before the due date for filing return of income was not considered by the 3 M/s. M.P. Recycling Co. Pvt. Ltd.
AO. Accordingly we set aside the order passed by Ld CIT(A) and direct the AO to re-compute interest u/s 234A, if any, in accordance with the circular issued by CBDT (supra).
In the result, the appeal of the assessee is treated as allowed for statistical purposes. Order has been pronounced in the Court on 25.10.2017.