2021 (7) TMI 946 - AT - Income Tax

Interest u/s 244A - Whether CIT(A) is correct in allowing interest u/ s. 244A for the period of delay attributable to the assessee either wholly or in part.? - HELD THAT - As submitted by assessee that the delay is not attributable to the assessee as the department gives credit to the TDS only when reflected in 26AS. The updation of Form 26AS is beyond the control of the assessee and hence the delay in updation should not be attributed to the assessee. Therefore, we find no infirmity in the order of the CIT(A) in directing the AO to allow interest u/s 244A as was allowed in the earlier 154 order for the full period and upholding the order of the CIT(A), the grounds raised by the revenue on this issue are dismissed. Revision u/s 263 - computation of loss or unabsorbed depreciation - HELD THAT - We observe that the assessee has furnished details of the unabsorbed depreciation and business forward losses before the AO on two different dates, first vide letter dated 24/07/2014 and second one on 11/11/2014, which have been extracted by the AO. AO has calculated the unabsorbed depreciation and business forward losses and the CIT(A) has confirmed the order of the AO. At the time of hearing, the assessee has also produced before us a statement showing the details of unabsorbed depreciation and accumulated losses. Figures are not in consonance with each other as calculated by the AR of the assessee. Therefore, to find out the genuineness of the figures which are extracted as above, we remit this issue to the file of the AO for verification/genuineness of the figures as quoted supra in the table by the ld. AR of the assessee. If the figures are found to be correct, the AO is directed to allow the claim of the assessee u/s 115JB(2)(iii) in accordance with law after providing reasonable opportunity of being heard to the assessee. Thus, the grounds raised by the assessee on this issue in both the appeals under consideration are treated as allowed for statistical purposes.

Summary

Issues Involved:
1. Grant of interest under Section 244A on self-assessment tax.
2. Calculation and set-off of brought forward business losses and unabsorbed depreciation under Section 115JB.

Issue-wise Detailed Analysis:

1. Grant of Interest under Section 244A on Self-Assessment Tax:

Facts:
The assessment was completed under Section 143(3) read with Section 153A. The Assessing Officer (AO) passed a rectification order under Section 154 allowing additional TDS credit but omitted to grant interest under Section 244A on self-assessment tax. Subsequent rectification orders were passed, but the AO restricted the interest on TDS from the date of claim instead of the date of deduction.

Assessee's Argument:
The assessee argued that there was no apparent mistake in granting full interest on TDS in the earlier order, making the rectification order invalid. The delay in claiming TDS credit was due to the department's delay in updating Form 26AS, which should not be attributed to the assessee.

CIT(A) Decision:
The CIT(A) held that the issue of delay attribution is debatable and beyond the scope of rectification under Section 154. The AO was directed to allow interest under Section 244A for the full period as allowed in the earlier order.

ITAT Decision:
The ITAT upheld the CIT(A)'s decision, stating that the delay in updating Form 26AS is beyond the assessee's control and should not be attributed to them. The appeal by the revenue was dismissed.

2. Calculation and Set-off of Brought Forward Business Losses and Unabsorbed Depreciation under Section 115JB:

Facts:
Assessments for AY 2004-05 and 2005-06 were completed, allowing the set-off of brought forward losses and depreciation. The Commissioner of Income Tax (CIT) held that the set-off was erroneous and prejudicial to the revenue's interest, directing the AO to re-examine the issue. The AO recalculated the losses, concluding that as of 01/04/2003, the assessee had only unabsorbed depreciation and no brought forward business loss.

Assessee's Argument:
The assessee contended that the original set-off was correct and in accordance with the law. The CIT(A)'s methodology of calculating losses cumulatively was incorrect.

CIT(A) Decision:
The CIT(A) confirmed the AO's order, agreeing that the AO correctly calculated the depreciation and business loss separately for each year. The CIT(A) upheld the AO's calculation of book profits under Section 115JB.

ITAT Decision:
The ITAT observed discrepancies in the figures provided by the assessee and remitted the issue back to the AO for verification. The AO was directed to allow the claim under Section 115JB(2)(iii) if the figures were found correct, after providing the assessee a reasonable opportunity to be heard. The appeals by the assessee were allowed for statistical purposes.

Conclusion:
The ITAT dismissed the revenue's appeal regarding the interest under Section 244A and allowed the assessee's appeals for statistical purposes concerning the calculation of book profits under Section 115JB, directing further verification by the AO.