2009 (7) TMI 114 - HC - Income Tax

Rectification of mistake - .AO revised the original order of assessment with a view to withdraw the excess interest. He took the view that the assessee s return is not complete in all respects as the audit report in Forms Nos. 3CA and 3CD and also the audit report under section 44AB of the Income-tax Act as also the report contemplated under section 619 of the Companies Act were not filed. Therefore, attributing the delay on the part of the assessee excess interest granted by the earlier order was demanded held that - The net result of the proceedings under section 154 earlier initiated against the assessee as a matter of fact, would be completed in the sense that once he noticed that AO could not have passed an order completing the assessment without deciding this issue and without referring the same to the Chief Commissioner, he would have only cancelled the assessment and then, after obtaining the decision from the Chief Commissioner or the Commissioner, he could have incorporated the same and completed the assessment The same has been done by the AO appeal dismissed.

Summary

Issues:
Challenge to legality of notice and proceedings under Income-tax Act, 1961; Refund of amount demanded; Jurisdiction of Chief Commissioner or Commissioner to decide delay attribution; Assessing Officer's authority in excluding periods for interest calculation.

Analysis:

The appellant, a public sector undertaking, challenged the legality of exhibits P-12 and P-13 under the Income-tax Act, seeking a refund of Rs. 20 lakhs and to prevent the recovery of Rs. 13,07,500 demanded in exhibit P-12. The dispute arose when the Assessing Officer withdrew interest granted due to incomplete audit reports, attributing delay to the appellant. The Chief Commissioner decided delay attribution, leading to the demand in exhibit P-13. The Tribunal set aside the Assessing Officer's decision, emphasizing the Chief Commissioner's authority in deciding delay attribution under section 244A(2) of the Act. The Tribunal directed the Assessing Officer to reconsider the matter in line with section 244A(2), which was done through exhibit P-13. The appellant argued delay was not its fault, citing completion of audit reports post-assessment. However, as the Chief Commissioner's decision was not challenged, and the Tribunal's decision was based on jurisdictional grounds, the High Court found no reason to interfere with the lower court's judgment. The Court affirmed the dismissal of the appeal, emphasizing the exclusive authority of the Chief Commissioner or Commissioner to decide delay attribution under section 244A(2) of the Act, thereby upholding the legality of exhibits P-12 and P-13.