2016 (1) TMI 372 - HC - Income Tax

Chargeability of interest by AO under Sections 234A 234B and 234C - Whether the CIT(A) and the Tribunal were justified in deleting the interest under Sections 234A and 234C of the Act and in restricting the interest charged under Section 234B - Held that - The matter is no longer res integra. This Court in Principal Commissioner of Income Tax Faridabad v. Shri Krishan Gopal (HUF) 2015 (12) TMI 1069 - PUNJAB AND HARYANA HIGH COURT adjudicated both the issues as noticed above against the revenue holding that an appeal could be filed against the levy of interest under Sections 234A 234B and 234C of the Act before the CIT(A) as an appeal was maintainable. Further under similar circumstances it was recorded that the CIT(A) and the Tribunal were justified in deleting the interest under Sections 234A and 234C of the Act and in restricting the interest charged under Section 234B of the Act. The appeal of the revenue was dismissed.

Summary

Issues:
1. Jurisdiction of CIT(A) to entertain appeal against interest charges under Sections 234A, 234B, and 234C of the Income Tax Act.
2. Justification of deleting interest under Sections 234A and 234C and restricting interest under Section 234B by CIT(A) and Tribunal.

Jurisdiction of CIT(A) to entertain appeal:
The High Court considered whether the CIT(A) had the jurisdiction to entertain the first appeal under Section 246 of the Income Tax Act against the interest charges imposed by the Assessing Officer under Sections 234A, 234B, and 234C of the Act. The Court referred to a previous judgment in a similar matter where it was held that an appeal could indeed be filed against the levy of interest, and the CIT(A) was justified in deleting the interest under Sections 234A and 234C, as well as restricting the interest under Section 234B. Based on this precedent, the Court dismissed the appeal, affirming the jurisdiction of the CIT(A) to entertain such appeals.

Justification of deleting/restricting interest charges:
The Court analyzed the justification behind deleting the interest under Sections 234A and 234C, as well as restricting the interest under Section 234B by the CIT(A) and the Tribunal. The revenue contended that the first appeal was not maintainable since the returned income was accepted, and there was no grievance against the order. However, the Court upheld the decisions of the CIT(A) and the Tribunal, emphasizing that the interest charges were appropriately dealt with. The Court found that the actions of the CIT(A) and the Tribunal were justified based on the facts and circumstances of the case, leading to the dismissal of the appeal. The Court's decision was influenced by the previous judgment in a similar case, which supported the deletion and restriction of interest charges under the specified sections of the Income Tax Act.

In conclusion, the High Court affirmed the jurisdiction of the CIT(A) to entertain appeals against interest charges under Sections 234A, 234B, and 234C of the Income Tax Act. The Court also upheld the decisions of the CIT(A) and the Tribunal in deleting and restricting interest charges under the relevant sections, based on the circumstances of the case and supported by previous judicial precedents. The appeal was ultimately dismissed in line with the established legal principles and precedents.