SCOTT EDIL ADVANCE RESEARCH LABORATORIES AND EDUCATION LIMITED,CHANDIGARH vs. ASSTT. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1, CHANDIGARH

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ITA 849/CHANDI/2023Status: DisposedITAT Chandigarh06 November 2024AY 2013-14Bench: SHRI. SANJAY GARG (Judicial Member), SHRI. KRINWANT SAHAY (Accountant Member)3 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the levy of interest under sections 234A, 234B, and 234C is mandatory and the AO was justified in invoking section 154. However, the levy is consequential to additions made, so if additions are deleted in quantum appeals, the interest will also be deleted.

What were the facts?

The Assessing Officer (AO) levied interest under sections 234A, 234B, and 234C via a rectification order under section 154. The assessee argued that non-levy of this interest in the original assessment order was not a mistake apparent from the record.

What were the issues?

Whether the AO can levy mandatory interest under sections 234A, 234B, and 234C through a rectification order when it was not initially levied.

Which sections of the Income-tax Act were involved?

Section 234A,Section 234B,Section 234C,Section 154

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Cases cited in this judgment(2)Show list

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To 841/Chd/ 2023 िनधा�रण वष� / Assessment Year : 2012-13 To 2018-19 Scott Edil Pharmacia Ltd. बनाम The Asst. CIT Plot No. 54-55, Phase-II Central Circle-I, Industrial Area, Chandigarh Chandigarh �ायी लेखा सं./PAN NO: AAHCS1643K अपीलाथ�/Appellant ��यथ�/Respondent आयकर अपील सं./ To 854/Chd/ 2023 िनधा�रण वष� / Assessment Year : 2012-13 To 2018-19 Scott Edil Advance Research बनाम The Asst. CIT Laboratories And Education Limited Central Circle-I, Plot No. 28/6, Industrial Area, Chandigarh Phase-2, Chandigarh �ायी लेखा सं./PAN NO: AANCS1120M अपीलाथ�/Appellant ��यथ�/Respondent िनधा�रती क� ओर से/Assessee by : Shri Parikshit Aggarwal, C.A Smt. Shruti Khandelwal, Advocate राज�व क� ओर से/ Revenue by : Shri. K. Mehboob Ali Khan, CIT DR सुनवाई क� तारीख/Date of Hearing : 21/08/2024 उदघोषणा क� तारीख/Date of Pronouncement : 06/11/2024 आदेश/Order Per Sanjay Garg, Judicial Member : All the above appeals have been preferred by respective assesses for different Assessment Years. Some of the appeals are barred by limitation of one day only. Considering the shortness of delay, the short delay of one day is hereby condoned.

2.

Since the sole and common issue is involved in all the above appeals, hence these have been heard together and are being disposed off with this common order.

3.

The common issue raised by the assessee in all the above appeals is relating to the levy of interest under section 234A, 234B and 234C of the Income Tax Act, 1961 by the AO by way of rectification order passed under section 154 of the Act.

4.

Ld. Counsel for the Assessee has contended that non levy of interest under section 234A, 234B and 234C in the assessment order does not constitute a mistake apparent on record, therefore the Assessing Officer was not justified in levying interest under section 234A, 234B and 234C of the Act by way of rectification order

3 passed under section 154 of the Act. The Ld. DR, however has stated that the issue is squarely covered against the assessee by the decision of the Hon’ble Supreme Court in the case of Karanvir Singh Gossal Vs. CIT and another (2012) 349 ITR 692 (SC) wherein, the Hon’ble Supreme Court while further relying upon the Five Judges Bench decision of the Hon’ble Supreme Court in the case of Anjum M.H. Ghaswala & Ors, (2001) 252 ITR 1 has held that the levy of interest under section 234A, 234B and 234C is mandatory in nature.

4.1 In view of aforesaid settled position of law, the Ld. AO was justified in invoking the provisions of Section 234A, 234B and 234C by way of rectification order passed under section 154 of the Act.

5.

However both the Ld. Representatives of the parties have also been fair enough to admit that levy of interest under section 234A, 234B and 234C is consequential in nature i.e; the same is dependent upon the quantum additions made / sustained in the case of the assessee. The assessee by way of separate appeals for the Assessment Years under consideration have contested the validity of addition made, therefore, it is held if the additions are sustained then the consequential interest will be leviable, however if the additions stand deleted in the quantum appeals, the consequential interest under section 234A, 234B and 234C will also automatically stands deleted.

6.

Subject to the above observations, all the above captioned appeals filed by the different assessees are hereby dismissed.

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