LATE SHRI HARSHAD S. MEHTA,MUMBAI vs. DCIT CEN CIR 4(1), MUMBAI

Appeal by the assessee is directed against the order dated 4.3.2015 passed by the ld.CIT(A)-52, Mumbai for the assessment years 2009-10 wherein the assessee has raised the issue of charging of interest u/s 234A, 234B and 234C confirmed by the ld.CIT(A) as charged by the AO which should have been calculated after taking in account of TDS deductible at source.

The ld. AR, at the outset, submitted before us that the issue raised by the assessee in the present appeal stands covered in favour of the assessee by the decision of the Tribunal in assessee’s own case in and 1037/Mum/2013 (AY-2004-05 and 2005-06) order dated 14.8.2015 and therefore in view of the said decision the issue raised in this appeal be restored to the file of the AO, wherein it has been decided to calculate the interest u/s 234A, 234B and 234C after considering the amount of tax deductible at source on the income assessed.

The ld.DR did not object to the plea putforth by the ld.AR. 4. After hearing both the parties and on perusal of the record including the orders of authorities below and case law relied upon by the ld.AR, we find that the issue in hand has been decided by the Co-ordinate Bench of the Tribunal vide para 6 and 6.1 in favour of the assessee. For the sake of convenience, we reproduce the above referred paras as under : “6. The only other issue in this appeal is with regard to the chargeability of interest under section 234A, 234B & 234C of the Act. On this aspect, pleas of the assessee are two fold. First, the plea is to the effect that the provisions of section 234A, 234B and 234C are not applicable to notified entity. This aspect of the matter is required to be held against the assessee following the judgment of the Hon’ble Bombay High Court in the case of Divine Holdings Pvt. Ltd( ITA No.3334 of 2010 dated 7/3/2012), as decided by our Co-ordinate Bench in the case Eminent Holdings Pvt. Ltd. in ITA NO.2139/Mum/2013 dated 18/6/2014, which also was a case of notified entity under the Special Court (Trial of Offences relating to transactions in Securities) Act, 1992. At the time of hearing this aspect of the matter was fairly conceded by the Ld. Representative of the assessee. 6.1 The second plea of the assessee is with regard to the quantum of interest chargeable under section 234A, 234B & 234C of the Act which is to the effect that the interest should be charged after considering the amount of tax deductible at source on the income assessed. Similar plea of the assessee was upheld by our Co-ordinate Bench in the case of Eminent Holdings Pvt. Ltd. (supra). Following the same, we deem it fit and proper to restore the matter back to the file of AO who shall recompute the interest chargeable under section 234A, 234B & 234C of the Act after considering the amount of tax deductible at source on the income assessed. Needless to mention, the AO shall allow the assessee a reasonable opportunity of being heard and thereafter, recompute the interest chargeable under section 234A, 234B & 234C of the Act, as per law. Thus, on this aspect, the assessee partly succeeds.”

Respectfully following the decision of the Co-ordinate Bench of the Tribunal in assessee’s own case, we restore the issue to the file of the AO with a direction to recompute the interest u/s 234A, 234B and 234C after taking into account the tax deductible on total income of the assessee by affording fair and reasonable opportunity of being heard to the assessee.

In the result, the appeal of the assessee stands allowed for statistical purposes.