2021 (4) TMI 337 - AT - Income Tax

Interest levied u/s. 234B and 234C on the revised book profit - CIT-A deleted the addition - AR submits that the AO ought not to have levied interest u/s. 234B and 234C of the Act as the same issue was decided by this Tribunal in the original assessment proceedings u/s. 143(3) of the Act in favour of the assessee - The Revenue challenged the same before the Hon ble High Court of Bombay and there was no contrary order either by reversing or modifying the order of this Tribunal - HELD THAT - CIT(A) rightly held the order of this Tribunal is holds the field today and supported the impugned order. We find force in the arguments of ld. AR the AO ought not to have levied interest as there was no order from Hon ble High Court of Bombay reversing the finding of Tribunal, therefore, in our opinion, the finding rendered by the CIT(A) is justified. Therefore, we do not find any infirmity in the order of CIT(A). Accordingly, the grounds raised by the Revenue are dismissed. Appeal of Revenue is dismissed.

Summary

Issues Involved:
1. Justification of deleting interest levied u/s. 234B and 234C on revised book profit.
2. Imposition of interest u/s. 234B and 234C in assessment order passed u/s. 153A r.w.s. 143(3) of the Act.

Analysis:
1. The first issue revolved around the deletion of interest levied u/s. 234B and 234C on the revised book profit. The assessee, a company engaged in manufacturing, initially filed a return of income declaring total income as Nil, which was later revised due to a retrospective amendment. The Assessing Officer (AO) made an addition on account of club expenses and levied interest u/s. 234B and 234C on the revised book profit. The CIT(A) deleted the addition for club expenses but confirmed the interest levied. The Tribunal, however, granted relief to the assessee regarding the interest levied, leading the Department to appeal to the High Court, which was pending. The subsequent search action resulted in additional income disclosure, with the AO again levying interest u/s. 234B and 234C. The CIT(A) held that since there was no order contrary to the Tribunal's findings, the AO was not justified in imposing the interest and deleted it.

2. The second issue dealt with the imposition of interest u/s. 234B and 234C in the assessment order passed u/s. 153A r.w.s. 143(3) of the Act. The assessee challenged this assessment order, arguing that the Tribunal had previously granted relief regarding the interest levied, and the AO was not justified in imposing it again. The CIT(A) concurred, stating that since there was no order reversing or modifying the Tribunal's decision, the interest levied was unjustified. The Department of Revenue appealed to the High Court, but as no order was presented to show a reversal of the Tribunal's decision, the interest was ultimately deleted by the CIT(A) and upheld by the Tribunal.

In conclusion, both issues centered on the justification of levying interest u/s. 234B and 234C on the assessee's revised book profit and subsequent additional income disclosure. The Tribunal consistently ruled in favor of the assessee, with the CIT(A) deleting the interest based on the absence of contrary orders. The High Court appeals by the Revenue did not result in any modifications to the Tribunal's decisions, leading to the dismissal of the Revenue's appeal in both instances.