2023 (12) TMI 335 - AT - Income Tax

Rectification of mistake in calculation of interest chargeable u/s 234B and 234C while finalizing the assessment u/s 143(3) - HELD THAT - The said order of the AO, to say the least, is cryptic and bereft of any reasoning. Order of CIT(A) also suffers from the same vice in as much as no reason has been advanced for dismissing the appeal of the assessee. It does not require much gain saying that the orders of the income tax authorities, which seek to fasten tax liability are in the nature of quasi-judicial orders, which ought to set forth reasons and the decision thereof, so that the factum of due application of mind by the authority, becomes evident. In the instant case, the orders of the authorities below, are conspicuous by absence of any reason for the decision thereof, and therefore, the same are grossly unsustainable. Thus, considering the entirety of circumstances, we set aside the orders of the lower authorities and remit the matter back to the file of the Assessing Officer for consideration afresh. AO shall consider the calculation of interest u/s. 234B and 234C as canvassed by the assessee in his application dated 16.11.2017 and thereafter pass a speaking order, in accordance with law

Summary

Issues Involved:
The issues involved in this case include erroneous calculation of interest under sections 234B and 234C of the Income Tax Act, 1961, and the appropriate disposal of the Assessee's application seeking rectification of the mistake.

Issue 1: Erroneous Calculation of Interest:
The Assessee filed a return of income declaring an amount, which was later revised. The scrutiny assessment resulted in an assessed income and tax payable, inclusive of interest under sections 234B and 234C. The Assessee claimed that the interest calculation was erroneous due to a computational error. The rectification application was rejected without providing reasons by the Assessing Officer and the appeal before the Ld. CIT(A) was also dismissed.

Issue 2: Disposal of Assessee's Application:
The Assessee's representative argued that both authorities dismissed the application without giving reasons. The Assessee requested the matter to be remanded back to the Assessing Officer for appropriate disposal of the application. The Ld. DR did not oppose restoring the dispute to the Assessing Officer for the correct calculation of interest under sections 234B and 234C.

Judgment:
The Tribunal found that the orders of the lower authorities lacked reasoning for dismissing the Assessee's application, making them unsustainable. Citing the importance of providing reasons in quasi-judicial orders, the Tribunal set aside the lower authorities' decisions and remitted the matter back to the Assessing Officer. The Assessing Officer was directed to reconsider the interest calculation as per the Assessee's application and issue a speaking order after giving the Assessee a reasonable opportunity to be heard. Consequently, the appeal of the Assessee was allowed for statistical purposes.

This judgment highlights the significance of providing reasons in quasi-judicial orders and ensures that decisions are made with proper consideration and explanation, especially in matters involving tax liabilities and rectification applications under the Income Tax Act, 1961.