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Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI
Before: SHRI ABRAHAM P. GEORGE & SHRI G. PAVAN KUMAR
आदेश / O R D E R PER G. PAVAN KUMAR, JUDICIAL MEMBER:
The appeal filed by the assessee is directed against order of the Commissioner of Income-tax (Appeals)-2, Coimbatore, in dated 30.12.2015 for the assessment year 2011-2012
ITA No.715/Mds/2016. :- 2 -: passed u/s.143(3) r.w.s 147 and 250 of the Income Tax Act, 1961 (herein after referred to as ‘the Act’).
The assessee has raised the following grounds of appeal: 2.
‘’(1) The learned CIT(A) ought to have held that interest u/s. 234C was not chargeable at all, by the AO on the basis of 'tax due on the returned income’’ uls 147 of the I T. Act, 1961, as there was no failure of the nature described in that section read with 'Explanation' under section 234C, the appellant having furnished a return uls 139, entitling it to a refund of tax, in the facts and the circumstances of the case and in law.
(2) The learned CIT(A) , ought to have held that" tax due on the returned income" under Explanation to Section 234C of the I T. Act, 1961, means the tax chargeable on the total income declared in the return furnished by the appellant ix] s 139(1) of the Act, and not on the basis of a second return filed in response to the notice issued u/s 148 of the Act, unless such return was the only return furnished by the appellant, for the assessment year, in the facts and the circumstances of the case and in law.
(3) The learned CIT (A) is wrong in holding that the appellant is liable to pay advance tax, on the basis of the total income declared in the second return furnished uls 148, by interpreting the meaning of the words "tax due on the returned income", applicable in respect of the return furnished uls 139 (1) of the Act, would also cover the second and subsequent returns furnished uls 148, for the same assessment year, in the facts and the circumstances of the case and in law.
(4) For these and other additional grounds of appeal that may be adduced at the time of hearing, the order of the Commissioner of Income Tax (Appeals)-2, Coimbatore, is opposed to law and unsustainable in the facts and the circumstances of the case’’.
The Brief facts of the case are that the assessee is a 3. partnership firm and in the business of Real Estate and engaged in promotion of layout and sale of plots and filed the Return of income
ITA No.715/Mds/2016. :- 3 -: on 30.07.2011 with total income of �1,22,270/-. Subsequently, survey u/s.133A of the Act was conducted at a partner place on 04.09.2013.
During the survey operations, the Revenue has found payment of impugned on-money of �1,19,63,000/- and the receipt of on-money of �57,52,302/- by the firm outside the Books of account. Whereas the partner on the issue of payment of on-money �1,19,63,000/- has accepted the same as unaccounted in the year 2009-2010.
Subsequent to the survey operations, the ld. Assessing Officer issued notice u/s.148 of the Act on the assessee firm. In compliance to notice, the firm filed Return of income on 11.12.2013 including on money receipt of �57,52,320/- and paid self assessment tax u/sec.140A of the Act alongwith interest. The ld. Assessing Officer issued notice u/s.143(2) of the Act. In compliance to notice, the ld. Authorised Representative of assessee appeared from time to time and produced Books of account, details of purchase and sales made during the year and expenses incurred and the ld. Assessing Officer after verification of records accepted Revised return of income and passed assessment order u/s.143(3) r.w.s 147 of the Act dated 23.06.2014. Subsequently, the assessee filed petition u/sec. 154 of the Act on 21.07.2014 for mistake apparent from record in calculation of interest of Secs 234B and 234C of the Act. The ld. Assessing Officer passed order u/s.154 of the Act on 08.08.2014 with detailed
ITA No.715/Mds/2016. :- 4 -: observations on the provisions of Secs.234B and 234C and rejected the petition. Aggrieved by the order passed u/.143(3) r.w.s. 147 of the Act, the assessee filed an appeal before Commissioner of Income Tax (Appeals).
In the appellate proceedings, the ld. Authorised Representative of assessee argued the grounds and explained that the ld. Assessing Officer erred in levying interest u/s.234B of the Act in assessment u/s.143(3) r.w.s. 147 of the Act being excessive and self assessment tax paid u/s.140A of the Act was not considered for calculation of interest. Further, the ld. Assessing Officer cannot apply the provisions of Sec.234C of the Act to the reassessment order and the interest u/s.234C of the Act shall be levied only for shortfall of advance tax paid and payable, any payment of advance tax during the financial year shall be given credit for interest calculation. The ld. Commissioner of Income Tax (Appeals) considered the submissions of assessment proceedings and grounds with specific submissions on the levy of interest u/s.234B of the Act in default on payment of advance tax and interest u/s.234C of the Act on deferent of advance tax.
The ld. Commissioner of Income Tax (Appeals) considered the submissions on the levy of interest u/s.234B of the Act as per the provisions of Act and directed the ld. Assessing Officer to consider the ITA No.715/Mds/2016. :- 5 -:
Income tax paid u/s.140A of the Act and the provisions of Sec.234B(2) of the Act in calculating the interest and discussed elaborately at para 4.2 of the order and partly allowed the appeal. In respect of Sec.234C chargeability of interest the ld. Commissioner of Income Tax (Appeals) considered the action of the ld. Assessing Officer is in accordance with law and interest u/s.234C of the Act is also levied on the Basis of Return of income furnished in response to notice u/s.148 of the Act and dismissed the ground of the assessee on the provisions of Sec.
234C of the Act. Aggrieved by the order of the Commissioner of Income Tax (Appeals) the assessee assailed an appeal before Tribunal.
Before us, the ld. Authorised Representative reiterated the submissions made in assessment, appellate proceedings and the Rectification petition u/s.154 of the Act filed by the assessee which was rejected. The ld. Assessing Officer should not have charged interest u/s.234C of the Act on the tax payable on Revised return of income filed in compliance to notice u/s.148 of the Act including the unaccounted money of �57,52,320/-. The interest u/s.234C of the Act should be charged on furnishing of Return of income u/s.139(1) of the Act and ‘’tax due on Returned income’’ as per explanation u/s.234C of the Act which means the Return of income filed u/s.139(1) of the Act
ITA No.715/Mds/2016. :- 6 -: and not the revised return filed in response notice u/s.148 of the Act, the ld. Authorised Representative submitted that due to survey operation u/s.133A of the Act the income has been offered in the revised return of income filed on 11.12.2013 and levy of interest u/s.234C of the Act on the revised is not in accordance with law and prayed for allowing the appeal.
Contra, the ld. Departmental Representative relied on the Order of the Commissioner of Income Tax (Appeals) and opposed to the grounds.
We heard the rival submissions and perused the material on record. The crux of the issue argued by the ld. Authorised Representative that the interest u/s.234C of the Act shall not be chargeable on the return of income filed in compliance to notice u/s.148 of the Act. We found the assessee is a partnership firm and filed original Return of income on 30.07.2011 within time allowed u/s.139(1) of the Act disclosing total income of �1,22,270/-. Due to survey operations u/s.133A of the Act on 04.09.2013, it was found that the assessee firm has received on-money of �57,52,320/- and same was included in Revised return of income filed on 11.12.2013 paid taxes of �17,87,709/- including interest. The ld. Authorised Representative contentions being no interest u/s.234C of the Act
ITA No.715/Mds/2016. :- 7 -: should be charged on Return of income filed in compliance to notice Sec. 148 of the Act as the chargeability provisions are applicable only to the Return of income filed u/s.139(1) of the Act. The provisions of charging of interest u/s.234C of the Act is automatic and assessee need not be provided an opportunity. Further, we perused the Explanations to the provisions of Sec. 234C of the Act ‘’the tax due on returned income’’ shall be reduced by (i) tax deducted and collected at source, (ii) the amount of relief of tax allowed under sections 90 and 90A and deduction from the Indian income –tax payable, allowed under section 91, and (iii) tax credit allowed to be set off under section 115JAA/115JD from the tax on the total income. The assessee firm cannot interprete that the ‘’tax due on Return income’’ shall imply only to the Return of income filed u/s.139(1) of the Act were income is declared. The provisions of Sec.234C of the Act are mandatorily applicable in respect of deferment of payment of advance tax as per the rates prescribed in the previous year relevant to subsequent assessment year and interest is charged. We are of the considered opinion that levy of interest u/s.234C of the Act is an automatic and the interpretation of charging of interest u/s.234C of the Act cannot be restricted to the ‘’tax due on Returned income’’ as referred u/sec.
139(1) of the Act is not logical interpretation and cannot be accepted
ITA No.715/Mds/2016. :- 8 -: in the Court of law. The ld.CIT(A) has dealt exhaustively on the applicability of provisions and the Explanations and upheld the order of the ld. Assessing Officer, on charging of interest u/sec.234C of the Act on return of income filed in response to notice u/sec. 148 of the Act. Hence, we are not inclined to interfere with the order of Commissioner of Income Tax (Appeals) and dismiss the grounds of the assessee.
8 In the result, the appeal of the assessee in is dismissed.
Order pronounced on Wednesday, the 17th day of August, 2016, at Chennai.