VILLURI VARAHA VENKATA SRINU RAMA NAGESWARA RAO(HUF),ANAKAPALLE vs. ASSISTANT COMMISSIONER OF INCOME TAX,CIRCLE-1(1), VISAKHAPATNAM

1. This appeal is filed by the assessee against the order of Commissioner of Income Tax (Appeals) [CIT(A)], National Faceless Appeal Centre (NFAC), Delhi in DIN & Order No. ITBA/NFAC/S/250/2023-24/1057096671(1) dated 16.10.2023, arising out of order passed u/s 154 of the Income Tax Act, 1961 (in short ‘Act’) dated 10.10.2022 for the Assessment Year (A.Y.) 2016-17. V.V.V.Srinu Rama Nageswara Rao, Anakapalle

Brief facts of the case are that the assessee, a HUF, along with four others entered into a development agreement coupled with General Power of Attorney on 28.05.2015 with M/s Visakha Infra Developers LLP. Assessee received a sum of Rs.30,00,000/- and built up area of 13,855 sq.ft towards it’s share in the consideration of the development agreement. The assessee paid advance tax of Rs.20,00,000/- on 15.03.2016 and Rs.9,00,000/- on 30.03.2016. The return of income was not filed initially due to reasons beyond the control of the assessee. Thereafter, the assessee filed the return of income for the A.Y.2016-17, on 31.01.2019, admitting total income of Rs.1,29,48,920/- which included the short term capital gains of Rs.1,18,13,600/- arising from the development agreement. The assessee paid self assessment tax of Rs.22,08,630/- towards the tax computed on the total income along with interest till the date of filing the return of income. The assessment was completed on 28.05.2019 u/s 143(3) r.w.s. 147 of the Act by accepting the income returned. Subsequently, the Assessing Officer (AO) reopened the case of the assessee and the reassessment proceedings were completed on 30.03.2022. The total income was determined at Rs.1,49,10,086/- and the tax payable was determined at Rs.62,88,036/- which included interest of Rs.3,86,286/- u/s 234A, Rs.9,20,890/- u/s V.V.V.Srinu Rama Nageswara Rao, Anakapalle 234B and Rs.1,34,098/- u/s 234C of the Act. The AO did not consider the advance tax of Rs.20,00,000 paid by the assessee on 15.03.2016, Rs.9,00,000/- paid on 30.03.2016 and self assessment tax of Rs.22,08,630/- paid on 31.01.2019 and raised demand of Rs.62,88,036/-. Later, the AO passed one rectification order u/s 154 of the Act on 10.10.2022, wherein, the AO computed the interest u/s 234A at Rs.13,23,797/-, interest of Rs.11,64,971/- u/s 234B and interest of Rs.1,33,879/- u/s 234C of the Act aggregating to an amount of Rs.26,22,647/- as against the total interest of Rs.14,41,274/- charged in the assessment order.

Aggrieved by the order of the AO, the assessee preferred an appeal before the CIT(A) and the Ld.CIT(A) partly allowed the appeal of the assessee.

Aggrieved by the order of the Ld.CIT(A), the assessee preferred an appeal before the Tribunal by raising the following grounds of appeal :

The order of the learned Commissioner of Income Tax (Appeals) is contrary to the facts and also the law applicable to the facts of the case.

The learned Commissioner of Income Tax (Appeals) ought to have held that the assessing officer is not justified in charging interest of Rs.13,23,797 u/s 234A and Rs.11,64,971 u/s 234B of the Act in the rectification order dated 10.10.2022 as against the interest V.V.V.Srinu Rama Nageswara Rao, Anakapalle of Rs.3,86,286 u/s 234A and Rs.9,20,890 u/s 234B charged in the assessment order dated 30.03.2022. 3. Any other grounds may be urged at the time of hearing. 5. At the outset, the Ld.AR submitted that though the AO passed order u/s 154 of the Act, giving credit to the advance tax and self assessment taxes paid but the AO is not justified in charging interest of Rs.13,23,797/- u/s 234A and Rs.11,64,971/- u/s 234B of the Act in the rectification order dated 10.10.2022 as against the interest of Rs.3,86,286/- u/s 234A and Rs.9,20,890/- u/s 234B charged in the assessment order dated 30.03.2022. The Ld.CIT(A) has passed cryptic order without giving any reasons and not considered the submissions made by the assessee. The Ld. AR therefore pleaded to set aside the orders passed by the revenue authorities and afford an opportunity of being heard before the Ld.CIT(A) to substantiate it’s case in the interest of justice.

Per contra, the Ld.DR relied on the order of the Ld.CIT(A). She pleaded to uphold the order passed by the Ld.CIT(A) and dismiss the appeal of the assessee.

I have heard both the parties and perused the material placed on record. It is apparent from the records that the AO charged interest of V.V.V.Srinu Rama Nageswara Rao, Anakapalle Rs.13,23,797/- u/s 234A and Rs.11,64,971/- u/s 234B of the Act in the rectification order dated 10.10.2022 passed u/s 154 of the Act, as against the interest of Rs.3,86,286/- u/s 234A and Rs.9,20,890/- u/s 234B charged in the assessment order dated 30.03.2022. The only contention of the assessee is that the Ld.CIT(A) has passed the order without giving any reasons and also not considered the submissions made by the assessee. I have also gone through the orders passed by the Ld.CIT(A), which is only one sentence order, without giving any reasons for dismissing the appeal. In view of the aforesaid facts and circumstances of the case and keeping in view the principles of natural justice, I am inclined to remit the matter back to the file of the Ld.CIT(A) with a direction to afford another opportunity of being heard to the assessee to substantiate it’s case. The assessee is also directed to adhere to the notices issued and served by the revenue authorities and produce supporting documentary evidence to substantiate it’s claim. Accordingly, the grounds raised by the assessee are allowed for statistical purpose.

In the result, appeal of the assessee is allowed for statistical purpose.