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Facts
The assessee's appeal was against the CIT(A)'s order upholding the charging of interest under Sections 234A and 234B. The assessee contended that the charging of this interest, particularly through a Section 154 order, was not legally valid.
Held
The Tribunal found that the co-ordinate bench had previously decided a similar issue in the assessee's own case for the same assessment year. The Tribunal held that it would be in the interest of justice and fair play to restore the issue to the Assessing Officer to calculate the interest after providing the assessee an adequate opportunity of being heard.
Key Issues
Whether the charging of interest under Sections 234A and 234B via a Section 154 order by the Assessing Officer is legally valid.
Sections Cited
154, 234A, 234B
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Income Tax Appellate Tribunal, DELHI ‘F’ BENCH,
Before: SHRI YOGESH KUMAR US, & SHRI NAVEEN CHANDRA
PER NAVEEN CHANDRA, ACCOUNTANT MEMBER:- This appeal by the assessee is preferred against the order of the CIT(A), Ghaziabad dated 02.01.2018 pertaining to A.Y 2008-09.
The solitary grievance raised emanating from the 5 grounds of appeal of the assessee is against the order u/s 154 of the Income-tax assessee has challenged the charging of interest u/s 234A and 234B of the Act.
At the very outset, we find that the co-ordinate bench in assessee’s own case in the A.Y 2008-09 has decided the appeal partly in favour of the assessee and partly in favour of the Revenue in ITA No.
2676/DEL/2016 vide order dated 13.08.2025. The co-ordinate bench has deleted certain additions while confirming certain other additions.
The issue at hand is levying of interest u/s 234A and 234B of the Act by the Assessing Officer on the assessed income is legally valid under the provisions of section 154 of the Act or not.
We find that the ld. CIT(A) has, following the Hon'ble Supreme Court in the case of Anjum MH Ghaswala 252 ITR 1, held that interest to be levied u/s 234A and 234B of the Act are mandatory in nature.
Further, the ld. CIT(A) pointed out that the Assessing Officer has in the assessment order had directed to charge interest as per law marking a distinguishable feature from the decision of the Hon'ble Delhi High Court in the case of Oswal Exports.
Page 2 of 4 interest of justice and fair play, it would be fit to restore the issue to the file of the Assessing Officer with the direction to calculate interest after affording sufficient opportunity of being heard to the assessee.
The assessee is also directed to provide necessary information/ documents as required by the authorities.” allowed for statistical purposes.
The order is pronounced in the open court on 17.10.2025.