2019 (11) TMI 1674 - AT - Income Tax

Validity of the orders u/s 154 - rectifying the mistake relating to levy of interest u/s 234 when the said orders did not contain any directions in favour of charging of the said interest u/s 234A - HELD THAT - As examined the assessment order, in general and the contents of para 11 to 13, in particular for want of direction, if any, in favour of charging of interest u/s 234A of the Act. We find that there is no whisper about the proposal to levy of interest u/s 234A of the Act in the assessment orders. Considering the same, we are of the opinion that the order of the Tribunal in the case of M/s. Heritage Project 2017 (12) TMI 986 - ITAT AMRITSAR is applicable directly to the facts of the present case. We are of the opinion that the Assessing Officer assumed jurisdiction u/s 154 of the Act is validly.

Summary

Issues Involved:
Validity of orders u/s 154 for rectifying the mistake relating to levy of interest u/s 234A without specific mention in the assessment order.
Validity of jurisdiction assumed u/s 154.
Charging interest u/s 234A when the original return is filed within the due date u/s 139(1).

Validity of orders u/s 154 for rectifying the mistake relating to levy of interest u/s 234A without specific mention in the assessment order:
The appeals involved two different assessees, and the common issue was the validity of orders u/s 154 for rectifying the mistake related to the levy of interest u/s 234A without any specific mention in the assessment order. The assessee contended that the Assessing Officer cannot issue a notice u/s 154 without a specific direction in the assessment order regarding the charging of interest u/s 234A. The Tribunal referred to a similar case and ruled that the existence of a direction in the assessment order is necessary for the Assessing Officer to assume jurisdiction u/s 154 for rectification. The Tribunal found that there was no mention of the proposal to levy interest u/s 234A in the assessment orders, and hence, the orders u/s 154 were not valid. The Tribunal relied on legal precedents to support this conclusion.

Validity of jurisdiction assumed u/s 154:
The issue of whether interest not charged in the original assessment order can be rectified u/s 154 was considered debatable and required detailed examination. The Tribunal referred to a specific case to highlight the complexity of this issue. The assessee argued that the failure to mention interest in the original assessment order cannot be rectified u/s 154. However, the Departmental Representative relied on the orders of the Assessing Officer and the CIT(A). The Tribunal examined the relevant provisions and legal precedents to determine the validity of jurisdiction assumed u/s 154 in such cases.

Charging interest u/s 234A when the original return is filed within the due date u/s 139(1):
The Tribunal analyzed the provisions of u/s 234A(3) and emphasized the importance of filing the return within the specified time. The assessee's contention was that interest u/s 234A cannot be charged when the original return is filed within the due date u/s 139(1), even if there was no specific mention of treating the original return as filed in response to a notice u/s 148. The Tribunal examined the assessment order and concluded that the original return being filed within the due date is valid, and any technical omissions cannot render the return non-est. The Tribunal highlighted that the entire assessment was based on the income declared in the original return, indicating the validity of the return filed within the due date.

In conclusion, the Tribunal found the orders u/s 154 for rectifying the mistake relating to the levy of interest u/s 234A without specific mention in the assessment order to be invalid. The Tribunal also discussed the validity of jurisdiction assumed u/s 154 and the issue of charging interest u/s 234A when the original return is filed within the due date u/s 139(1). Based on settled legal positions and the commonality of facts in all three cases, the Tribunal allowed the common grounds raised by the assessee in the appeals. The relief granted on the legal issue made the adjudication of other grounds relating to merit unnecessary. Consequently, the appeals of the respective assessees were partly allowed.