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Income Tax Appellate Tribunal, “B” BENCH: KOLKATA
Before: Shri M. Balaganesh, AM & Shri K. Narasimha Chary, JM]
ORDER Per Shri M. Balaganesh, AM:
This appeal by assessee is arising out of order of CIT(A), Central-1, Kolkata vide appeal No. 26/CC-V/CIT(A)C-I/11-12 dated 27.08.2013. Assessment was framed by DCIT, Circle-V, Kolkata u/s. 154/143(3) of the Income tax Act, 1961 (hereinafter referred to as the “Act”) for AY 2007-08 vide his order dated 31.03.2011.
The only issue to be decided in this appeal of assessee is as to whether interest u/s. 234B of the Act could be levied in the facts and circumstances of the case.
The brief facts of this issue are that the assessee HUF filed its return of income for AY 2007-08 on 31.07.2007 declaring total income of Rs.3,92,97,035/- which mainly comprised of income from Long Term Capital Gains. This return was revised subsequently declaring total income of Rs.3,92,94,781/- which included LTCG of Rs.3,92,66,534/-. The tax payable on this revised return is as under:
Tax on LTCG @ 20% 78,38,956 Surcharge 7,83,896 Education Cess 1,72,457 Total tax payable 87,95,309 Less: Advance Tax (Paid on 15.03.2007 65,00,000 Self-asst. Tax (Paid on 15.06.2007 21,00,000 -do- (Paid on 30.07.2007) 5,70,891 91,70,891 Refundable 3,76,582
Surrendra Paul (HUF), AY 2007-08 The assessment was completed u/s. 143(3) of the Act on 31.12.2009 determining the total income at Rs.6,25,00,338/- after making some variations to LTCG reported by the assessee. In the said assessment, the tax and interest payable was determined at Rs.95,93,558/-. The assessee submitted a rectification petition u/s. 154 of the Act on 29.03.2010 for seeking credit of self assessment tax paid on 15.06.2007 in the sum of Rs.21 lacs and on 30.07.2007 in the sum of Rs.5,70,891/-. This rectification petition was not acted upon by the Ld. AO. Instead the Ld. AO issued a notice u/s. 154 of the Act in order to rectify the mistake in under charging of interest u/s. 234B of the Act. The Ld. AO ultimately charged interest u/s. 234B of the Act at Rs.24,81,190/- without giving credit for self assessment tax of Rs.21 lacs paid on 15.06.2007 on the ground that OLTAS (On line Tax Accounting System) showed that such payment of Rs. 21 lacs for AY 2006-07 instead of AY 2007-08. The assessee admitted before the AO that a small error by wrong mentioning of the assessment year had crept in the tax payment challan and also pleaded that for AY 2006-07 the assessment was completed u/s. 143(3) of the Act on 31.10.2008 determining total income at Rs. 40,366/- which is admittedly well within the maximum amount not chargeable to income tax. Accordingly, it was pleaded that there was no necessity for the assessee to make payment of self assessment tax on 15.06.2007 to the tune of Rs.21 lacs. All these submissions were ignored by the Ld. AO and ultimately interest u/s. 234B of the Act was charged at Rs.24,81,190/-. The Ld. AO, however, fairly gave credit of Rs. 21 lacs in AY 2006-07 and granted refund of the same together with interest u/s. 244A of the Act. On first appeal, the act of the Ld. AO in charging interest u/s. 234B of the Act without giving credit of Rs.21 lacs towards self assessment tax was upheld by the Ld. CIT(A). Aggrieved, assessee is in appeal before us on the following grounds:
”1. That on the facts and in the circumstances of the case, the action of Ld. CIT(A) to confirm the order U/s.154 dt.31.03.2011 to levy interest U/s.234B by not considering 140A payment of Rs. 21,00,000/- as relatable to Assessment Year 2007-08 is erroneous, arbitrary and bad in law. .
2. That on the facts and in the circumstances of the case, Ld. CIT(A) is wrong and unjustified in dismissing appeal without giving any finding on assessee's contention that there was no obligation for payment of tax U/s.140A for assessment year 2006-07 as the income as per return was below taxable limit.
3. That on the facts and in the circumstances of the case, Ld. CIT(A) has erred in dismissing appeal without appreciating the assessee's contention that the return showing non-taxable income for assessment year 2006-07 having been filed on 27.10.2006, the probability of tax payment U/s.140A on 15.06.2007 i.e. after a lapse of 8 months or so was rare and remote.
Surrendra Paul (HUF), AY 2007-08 4. That on the facts and in the circumstances of the case, Ld. CIT(A) is wrong in upholding the order U/s.154 of IT Act 1961 dt.31.03.2011 without giving any finding on assessee's contention that Assessing Officer is authorized to make correction of entries in OLTAS where the mistake is apparent.
5. That on the facts and in the circumstances of the case, the observations of Ld. CIT(A) that interest U/s 244A was allowed on refund pertaining to assessment year 2006-07 does not suggest confirmation of levy of interest U/s 234B in assessment year 2007-08 since rate of interest applicable for section 234B is double as compared to interest granted U/s 244A.”
We have heard rival submissions and gone through the material available on record. The facts stated hereinabove remain undisputed and hence, the same are not reiterated for the sake of brevity. It is not in dispute that in the tax payment challan for Rs.21 lacs paid on 15.06.2007, the column ticked by the assessee is attributed towards self assessment tax. It is not in dispute that there was no necessity for the assessee to make payment of tax of Rs. 21 lacs on 15.06.2007 for AY 2006-07 as both the returned income as well as assessed income u/s. 143(3) of the Act dated 31.10.2008 was well within the maximum amount not chargeable to tax. In this scenario we appreciate the contention of the Ld. AR that typographical error had factually crept in while making on line payment of self assessment tax by mentioning of wrong assessment year i.e Asst Year 2006-07 instead of Asst Year 2007-08. We also find from the revised return of income filed by the assessee disclosing income of Rs.3,92,94,781/-, the assessee indeed had liability towards payment of self assessment tax which was partially complied with by the assessee by making payment of self assessment tax of Rs. 21 lacs on 15.06.2007. Hence, in these circumstances, we are convinced that the demand for the AY 2007-08 had arose only due to non-granting of credit for self assessment tax to the tune of Rs. 21 lacs and consequential charging of interest u/s. 234B of the Act. We are also convinced that the credit of Rs.21 lacs paid on 15.06.2007 should have been given only in AY 2007-08 instead of AY 2006-07 as there was no possibility of amending/rectifying the error committed in the tax payment challan on the part of the assessee at that point of time. We also find that when this mistake was pointed out by the assessee at the first instance immediately on receipt of the assessment order framed u/s. 143(3) of the Act for AY 2007-08 by way of preferring petition u/s. 154 of the Act on 29.03.2010, the same was not acted upon by the AO.
Taking the totality of the facts and circumstances of the case, we feel that Rs. 21 lacs paid on 15.06.2007 towards self assessment tax should be given credit only in AY 2007-08 which would meet the ends of justice and consequential interest u/s. 234B of the Act would
Surrendra Paul (HUF), AY 2007-08 have to be reworked accordingly. We also direct the ld AO to withdraw the refund already granted for AY 2006-07 in view of our direction for AY 2007-08 and also direct not to charge interest u/s. 234D of the Act on the same. Accordingly, grounds raised by the assessee are allowed.
In the result, the appeal of the assessee is allowed.