2010 (1) TMI 1169 - AT - Income Tax

Summary

Issues Involved:
1. Condonation of delay in filing the appeal.
2. Charging of interest u/s 234B and 234C without adjusting advance tax and self-assessment tax from the PD account.
3. Charging of interest u/s 234A.

Summary:

Issue 1: Condonation of Delay in Filing the Appeal

The assessee argued that the delay in filing the appeal was due to receiving wrong legal advice and health issues. The CIT(A) dismissed the appeal in limine without considering the merits. The Tribunal, referencing the Supreme Court's decision in Collector, Land Acquisition vs. Mst. Katiji & Ors., held that the CIT(A) should have adopted a liberal approach and condoned the delay to ensure substantial justice. Therefore, the Tribunal found the CIT(A) erred in not admitting the appeal and deciding it on merits.

Issue 2: Charging of Interest u/s 234B and 234C

The assessee contended that the AO charged interest u/s 234B and 234C without adjusting the advance tax and self-assessment tax from the amount lying in the PD account, despite specific requests. The Tribunal admitted this legal ground, citing the Supreme Court's decision in National Thermal Power Co. Ltd. vs. CIT, which allows raising new legal grounds if they arise from facts on record. The Tribunal referenced the Delhi High Court's decision in CIT vs. K.K. Marketing, which held that the Department should adjust seized cash against advance tax liability. Consequently, the Tribunal directed the AO to adjust the amounts as requested by the assessee and recalculate the interest accordingly.

Issue 3: Charging of Interest u/s 234A

For the asst. yr. 2007-08, the assessee argued that interest u/s 234A was wrongly charged as the return was filed before the due date. The Tribunal admitted this legal ground and found that since the return was filed on 29th Oct., 2007, before the due date of 31st Oct., 2007, no interest u/s 234A should be charged. The Tribunal directed the AO to adjust the advance tax liability and recalculate the interest, if any.

Conclusion:

The Tribunal allowed the appeals partly, directing the AO to adjust the advance tax and self-assessment tax from the PD account and to recalculate the interest u/s 234B, 234C, and 234A accordingly.