2018 (12) TMI 1058 - AT - Income Tax

Short grant of credit of advance tax - Rectification application u/s 154 - Held that - The assessee has claimed for credit of advance tax paid of ₹ 33,70,59,363, in the return of income filed for the impugned assessment year. Whereas, AO while passing the final assessment order, has allowed credit for advance tax amounting to ₹ 33,60,13,160. According to the assessee, there is a short credit for advance tax paid amounting to ₹ 10,46,203. Notably, though, the assessee has filed an application under section 154 before the AO on 11th July 2017, pointing out the error in granting credit for advance tax, however, as submitted by the AR, the said application is still pending before the Assessing Officer. In due consideration of the aforesaid facts, we direct the AO to verify assessee s claim of payment of advance tax and grant actual credit for the tax paid by the assessee. This ground is allowed for statistical purposes. Levy of interest u/s 234B - rectification application filed under section 154 - Held that - As submitted by the assessee that, in fact, a refund of ₹ 5,22,35,371, is due to the assessee after deletion of addition made in the draft assessment order. Further, it is noticed that in the rectification application filed under section 154 of the Act before the Assessing Officer on 11th July 2017, the assessee has also raised the issue of mistake committee by the Assessing Officer in charging interest under section 234B. However, as submitted by the learned Authorised Representative, the said rectification application is still pending. In view of the aforesaid, we direct the Assessing Officer to verify assessee s claim that interest under section 234B of the Act is not chargeable for the impugned assessment year and decide the issue after due opportunity of being heard to the assessee. This ground is allowed for statistical purposes.

Summary

Issues:
1. Short grant of credit of advance tax.
2. Challenge to levy of interest under section 234B of the Act.

Short Grant of Credit of Advance Tax:
The appeal was against an assessment order under the Income Tax Act, 1961 for the assessment year 2014-15. The primary issue was the short grant of credit for advance tax. The Assessing Officer had granted credit for advance tax amounting to ?33,60,13,160, which was less than the actual amount paid by the assessee, resulting in a shortfall of ?10,46,203. The assessee had filed an application for rectification under section 154 of the Act, but no decision had been made. The tribunal directed the Assessing Officer to verify the actual advance tax paid by the assessee and grant appropriate credit, allowing this ground for statistical purposes.

Challenge to Levy of Interest under Section 234B of the Act:
The second ground of appeal was the challenge to the levy of interest amounting to ?5,11,89,170 under section 234B of the Act. The assessee claimed that a refund of ?5,22,35,370 was due, and as the advance tax paid exceeded 90% of the tax liability, no interest under section 234B should be charged. The Dispute Resolution Panel had deleted an addition made by the Assessing Officer, accepting the income returned by the assessee. Therefore, the tribunal found no basis for the levy of interest under section 234B if the claim of advance tax payment was correct. The tribunal directed the Assessing Officer to verify the claim and decide the issue after providing the assessee with an opportunity to be heard, allowing this ground for statistical purposes.

In conclusion, the tribunal allowed the assessee's appeal for statistical purposes, emphasizing the need for the Assessing Officer to verify the actual advance tax paid and reconsider the levy of interest under section 234B based on the correctness of the claim.