EPIROC MINING INDIA PRIVATE LIMITED (PREVIOUSLY KNOWN AS EPIROC MINING INDIA LIMITED),PUNE vs. ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE 8, PUNE, PUNE

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ITA 50/PUN/2024Status: DisposedITAT Pune14 May 2024AY 2018-19Bench: SHRI S.S.GODARA (Judicial Member), SHRI INTURI RAMA RAO (Accountant Member)4 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the cause of action for challenging the levy of interest under section 234C arose in the proceedings under section 143(1), not in the subsequent proceedings under section 143(3). Therefore, the appeal against the section 143(3) order, which merely confirmed the earlier levy, was not maintainable.

What were the facts?

The assessee company's return of income for AY 2018-19 was processed under section 143(1), which included a disallowance for delayed payment of employee's PF/ESIC contributions and levy of interest under section 234C. The subsequent assessment under section 143(3) also included these disallowances and interest.

What were the issues?

Whether an appeal against an assessment order under section 143(3) can raise issues that were already decided in the intimation under section 143(1)? Whether the levy of interest under section 234C can be challenged in an appeal against the section 143(3) order when the cause of action arose in the section 143(1) proceedings?

Which sections of the Income-tax Act were involved?

Section 143(1),Section 143(3),Section 234C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE BENCH “A”, PUNE

Before: SHRI S.S.GODARA & SHRI INTURI RAMA RAO

For Appellant: Shri Ketan Ved
For Respondent: Smt. Deepa Sanjay Hiray
Hearing: 14.05.2024Pronounced: 14.05.2024

This is an appeal filed by the assessee directed against the order of National Faceless Appeal Centre, Delhi (NFAC) dated 05.12.2023 for the assessment year 2018-19.

2.

Briefly, the facts of the case are as under :

The appellant is a company incorporated under the provisions of Companies Act, 2013. It is engaged in the business of Mining, Infrastructure and Natural Resources Equipment and providing related aftermarket services. The Return of Income for the A.Y. 2018-19 was filed on 29.11.2018 declaring total income of Rs.68,10,55,500/-. The same was revised on 28.02.2019 at a total income of Rs.68,24,09,370/-.

The said return was processed u/s.143(1) on 02.10.2019 after making adjustment by disallowing the delayed payment of Employee’s contribution to Provident Fund/Employees State Insurance Corporation (PF/ESIC) at Rs.35,71,289/- and also levying interest u/s.234C of the Income-tax Act, 1961 (hereinafter referred to as ‘The Act’).

3.

Being aggrieved by the said intimation, appellant filed a rectification application on 17.12.2019. Subsequently, the assessment was completed u/s.143(3) of the Act vide order dated 28.09.2021 after making disallowance of Employees contribution to PF/ESIC and also levied interest u/s.234C of the Act.

4.

Being aggrieved by the said assessment order, an appeal was filed before the CIT(A)/NFAC inter alia challenging the very levy of interest u/s.234C of the Act. The CIT(A)/NFAC dismissed the appeal by holding that interest was levied vide intimation u/s.143(1), the levy of interest levied u/s.234C is consequential in nature in the assessment order passed u/s.143(3) of the Act.

5.

Before us, the ld. AR submits that the CIT(A)/NFAC order passed u/s.154 is merged with the order passed u/s.143(3), therefore, the issue of levy of interest can be raised in the present appeal.

6.

On the other hand, the ld. Sr. DR while relying on the orders passed by the lower authorities opposed the submissions made by the ld. AR on behalf of the appellant company.

7.

We heard the rival submissions and carefully perused the relevant material on record. The only issue that arises for our consideration in the present appeal is with regard to levy of interest u/s.234C of the Act.

The assessee challenges the very levy of interest u/s.234C on the ground that the appellant company itself was incorporated on 20-07-2017.

Therefore, the question of levy of interest prior to incorporation does not arise pursuant to amendment vide Finance Act, 2017 placing reliance on the proviso to section 234C of the Act. It is the contention of the ld. AR that though the interest was levied u/s.234C in the intimation passed u/s.143(1), the levy of interest can be challenged in appeal against the order passed u/s.143(3) of the Act. We had carefully considered the submissions made on behalf of the appellant company, we are of the considered opinion that the interest was levied in the intimation u/s.143(1). Thus, the cause of action had arisen in the proceedings u/s.143(1) of the Act and not in the proceedings u/s.143(3) of the Act. If the assessee is aggrieved by the action of the CPC in levying interest u/s.234C, the only remedy is to challenge the intimation u/s.143(1) by following the process known to the law. Such issues cannot be raised in the order passed us.143(3) of the Act as it is mere consequential to the proceedings u/s.143(1). Therefore, the appeal is not maintainable, accordingly dismissed as not maintainable.

8.

In the result, the appeal filed by the assessee is dismissed. Order pronounced on this 14th day of May, 2024.

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