2025 (3) TMI 147 - AT - Income Tax

Correct amount of the interest u/s 234A - HELD THAT - As per clause (a) of sub-section 1 to section 234A interest is to be charged for every month or part of a month comprised in the period commencing on the date immediately following the due date till the ending on the date of furnishing of the return. Due date for filing of return of income in the case of assessee was 30th September 2011. Undisputedly assessee had filed the return of income for the first time in response to notice u/s 148 on 10.5.2018 and no return was filed u/s 139 thus assessee is liable for interest u/s 234A as provided in section 234A(1)(a) of the Act. Since the AO vide rectification order has corrected the period of default in filing the return by the assessee from one month to eighty months which is in accordance with the provisions of section 234(1)(a) thus there is no error in such order. Decided against assessee.

Summary

The appeal in this case was filed by the assessee against the order of CIT(A) NFAC, Delhi dated 31.07.2024 for the Assessment Year (AY) 2011-12. The brief facts of the case are that the appellant, a Pvt. Ltd Company, did not file the return of income for AY 2011-12 despite being required to do so. The Assessing Officer (AO) initiated reassessment proceedings after discovering that the appellant had purchased immovable property worth Rs. 2,68,61,000/- and had not filed the return. The AO passed an order under section 144 r.w.s. 147 and made an addition of Rs. 2,68,61,000/- under section 69 of the Income Tax Act. Subsequently, a rectification order was issued under section 154 to correct the interest charged under section 234A.The grounds of appeal raised by the appellant included challenges to the orders passed by the authorities, such as the correctness of the CIT(A) order, the initiation of reassessment proceedings, the addition made by the AO, the charging of interest, and the initiation of penalty proceedings.The CIT(A) dismissed several grounds of appeal, including those related to the addition made by the AO and the initiation of penalty proceedings. The CIT(A) upheld the charging of interest by the AO under section 234A. The appellant argued that the interest charged was already included in the order passed under section 143(3) and requested the deletion of the excess interest charged under the rectification order.The Senior Departmental Representative (DR) supported the orders of the lower authorities, stating that the charging of interest under section 234A was mandatory. The AO had correctly charged the interest as per the provisions of the Act.The Tribunal found that the grounds raised by the appellant were not relevant to the impugned order passed under section 154. The only issue remaining was the correct amount of interest charged under section 234A. The Tribunal noted that interest is to be charged for every month or part of a month from the due date till the filing of the return. Since the appellant had filed the return after a delay, interest under section 234A was correctly charged for the period specified in the rectification order.In conclusion, the Tribunal upheld the orders of the lower authorities and dismissed the appeal of the assessee. The decision was pronounced on 28th February 2025.