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2023 (4) TMI 1106 - AT - Income TaxRectification of mistake u/s 154 - non-granting of TDS credit to the extent claimed - Merging of orders - HELD THAT - A.O. while passing the rectification order u/s 154 r.w.s. 143(3) of the I.T.Act dated 09.06.2022, had enhanced the TDS credit, however, did not grant TDS credit to the extent of Rs.2,53,123 (Rs.2,99,84,276 2,97,31,153). Therefore, the issue raised in ground 4 and its sub-grounds had already merged with rectification order dated 09.06.2022. If at all the assessee is aggrieved for non-granting of TDS credit to the extent of Rs.2,53,123, it is for the assessee to file a fresh rectification application, if so advised. With the above observations, we reject ground No.4 and its sub-grounds. Incorrect levy of interest u/s 234C of the I.T.Act and non-granting of interest u/s 244A - We find that the above were not subject matter of rectification application u/s 154 of the I.T.Act. The assessee in its grounds of appeal before the CIT(A) had raised ground relating to issues of incorrect levy of interest u/s 234C of the I.T.Act and non-granting of interest u/s 244A of the I.T.Act. Therefore, the CIT(A) was not justified in dismissing the issue raised in grounds 2 and 3, by observing that the same has been merged with the order passed u/s 154 r.w.s. 143(3) of the I.T.Act. Hence, grounds 2 and 3 are restored to the files of the CIT(A). The CIT(A) is directed to decide the issues raised.
Issues Involved:
The issues involved in this judgment include dismissal of appeal by CIT(A) based on merger of orders under section 154 of the Income Tax Act, incorrect levy of interest under section 234C, non-granting of interest under section 244A, and non-grant of eligible credit for Tax Deducted at Source (TDS). Dismissal of Appeal Based on Merger of Orders: The CIT(A) dismissed the appeal by stating that the assessment order passed under section 143(3) had been rectified under section 154, thus losing its individual identity. The CIT(A) held that the cause of action for the appeal no longer existed after the subsequent order under section 154. The Tribunal observed that the CIT(A) erred in dismissing the appeal without considering the grounds on merits, specifically related to incorrect levy of interest under section 234C and non-granting of interest under section 244A. The Tribunal directed the CIT(A) to decide on these issues after affording a reasonable opportunity of hearing to the assessee. Incorrect Levy of Interest under Section 234C: The appellant contended that the interest under section 234C should be levied on the income disclosed in the return, not on the assessed income. The Tribunal noted that the issue of incorrect levy of interest was not part of the rectification application under section 154. The appellant's argument was supported by citing a case from the Delhi Bench of the Tribunal. The Tribunal rejected this ground as it had already merged with the rectification order. Non-Granting of Interest under Section 244A: The appellant raised the issue of non-granting of interest under section 244A, which was not considered in the rectification application under section 154. The Tribunal found that the CIT(A) was not justified in dismissing this issue, as it was not part of the rectification order. Therefore, the Tribunal restored this issue to the files of the CIT(A for further consideration. Non-Grant of Eligible Credit for Tax Deducted at Source (TDS): The appellant claimed that TDS credit of Rs. 2,53,123 was not granted, despite the rectification order enhancing the TDS credit but not to the extent claimed. The Tribunal noted that this issue had already merged with the rectification order, and if the appellant was aggrieved, a fresh rectification application could be filed. The Tribunal rejected this ground and its sub-grounds. General Ground: The Tribunal found that ground No.1 was general in nature and did not require specific adjudication, thus rejecting it. The appeal by the assessee was partly allowed for statistical purposes, with certain grounds being rejected and others restored for further consideration.
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