2019 (7) TMI 932 - AT - Income Tax

Rectification of mistake - Charging of interest u/s 220(2) - As per assessee s submissions, the interest was to be charged after expiry of 35 days from the issue of fresh assessment order passed pursuant to the directions of the Tribunal in set aside proceedings and not from the date of issue of original assessment order dated 27/03/1995 - chargeability of interest under Sec. 234A, 234B 234C HELD THAT - We have perused the cited order of Tribunal rendered in cross appeals in assessee s own case for AY 1992-93 2019 (2) TMI 1198 - ITAT MUMBAI passed in the matter of assessment framed u/s 143(3) r.w.s. 254 of the Act. We find that the issue of charging of interest u/s 234A, 234B, 234C 220(2) has already been delved into by the co-ordinate bench wherein the revenue authorities have been directed to follow the order passed in the case of Late Harshad S. Mehta and charged interest accordingly. As held that interest u/s 220(2) was to be charged from the date of default of fresh demand notice issued after the fresh assessment made in consequent of the orders of the appellate authorities. Similarly, the issue of charging of interest u/s 234A, 234B 234C has also been dealt with by the coordinate bench, in other paras. Since a view has already been taken by the coordinate bench in the matter, refraining from delving into the issues any further, we direct Ld. AO to follow the cited order of the Tribunal. Appeal stands dismissed.

Summary

Issues:
- Interpretation of regular assessment
- Computation of interest under sections 234A, 234B, 234C, and 220(2)

Interpretation of Regular Assessment:
The appeal by the Revenue contested the order of the Ld. Commissioner of Income-Tax (Appeals) for Assessment Year 1992-93. The dispute arose from a rectification order passed by the Ld. Assessing Officer under section 154, following an application by the assessee against the original assessment order. The first issue revolved around the charging of interest under section 220(2). The assessee argued that interest should be calculated from the date of the fresh assessment order, not the original assessment order, resulting in a significant difference in the amount. However, the Ld. AO rejected this argument, citing it was not a mistake apparent from the record and referred to a CBDT circular and Section 240 of the Act. The second issue related to the chargeability of interest under sections 234A, 234B, and 234C. The assessee contended that interest under these sections should be calculated only up to the date of the original assessment order, not the fresh assessment order. The Ld. AO held that interest would be charged based on the final decision regarding interest under section 220(2). The Ld. AO also determined the chargeability of interest under section 234C based on the assessed income.

Computation of Interest under Sections 234A, 234B, 234C, and 220(2):
The first appellate authority directed the Ld. AO to recompute interest under section 220(2) from the due date as per the fresh assessment order, not the original assessment order. Regarding interest under sections 234A, 234B, and 234C, the first appellate authority found the issues disputable and not suitable for rectification under section 154. The revenue appealed this decision. The Tribunal, after reviewing a previous order in cross-appeals for the same assessment year, directed the Ld. AO to follow the decision made in another case regarding the charging of interest under section 220(2) from the date of default of the fresh demand notice. The Tribunal upheld the decision of the first appellate authority on the computation of interest under sections 234A, 234B, and 234C. Consequently, the appeal was dismissed.

This comprehensive analysis of the judgment highlights the legal intricacies involved in interpreting regular assessment and computing interest under various sections, showcasing the application of relevant laws and precedents in resolving the dispute.