2022 (8) TMI 801 - AT - Income Tax

Rectification of mistake u/s 154 - levy of interest u/s. 234A - AR submitted that without specific direction, such a levy could not be made - HELD THAT - We find that Hon ble Supreme Court in the case of CIT V/s Anjum M.H.Ghaswala 2001 (10) TMI 4 - SUPREME COURT has held that a perusal of Sections 234A, 234B and 234C would show that the interest for default in furnishing return of income, default in payment of advance-tax and interest for deferment of advance-tax are mandatory in nature and therefore, Income Tax Settlement Commission (ITSC) was not empowered to reduce or waive interest statutorily payable under Sections 234A, 234B and 234C except to the extent of granting relief under the Circulars issued by the Board under section 119. This being so, there would be no requirement for AO to levy the same specifically in the assessment order. For the same reason, another plea of Ld. AR that debatable issue could not be subject matter of rectification u/s 154, would have no legs to stand. As in the present case, interest was levied in the original Income Tax Computation Form, the quantum of which was rectified u/s 154 which could certainly be done. The case law of Hon ble Delhi High Court in CIT V/s Inchcape India Pvt. Ltd. 2002 (8) TMI 862 - DELHI HIGH COURT is also on the same fact and hence, not applicable. - Decided against assessee.

Summary

Issues:
Levy of interest u/s. 234A in rectification order passed u/s 154.

Analysis:
1. The appellant challenged the levy of interest u/s. 234A in the rectification order passed u/s 154 for Assessment Years (AY) 2010-11, 2012-13 & 2013-14. The appellant contended that such a levy could not be made without specific direction. The Assessing Officer (AO) had rectified the demand and passed the order u/s 154 on 18.07.2018, recomputing the interest u/s. 234A to Rs.1,23,944/-. The appellant argued that interest u/s. 234A could not be levied without specific directions.

2. The Ld. CIT(A) noted the observations made by the AO regarding the delay in filing the Return of Income (ROI) and the subsequent levy of interest u/s. 234A. The Ld. CIT(A) distinguished the case law cited by the appellant and held that the circumstances of the present case were different from the case law cited by the appellant. The Ld. CIT(A) confirmed the levy of interest u/s. 234A based on the facts and circumstances of the case.

3. The Tribunal referred to the decision of the Hon'ble Supreme Court in CIT v. Anjum M.H. Ghaswala, where it was held that the interest under Sections 234A, 234B, and 234C is mandatory and need not be specifically levied in the assessment order. The Tribunal also distinguished the decisions cited by the appellant, stating that they were not applicable to the present case. The Tribunal upheld the order of the AO and dismissed all three appeals.

4. In conclusion, the Tribunal found no reason to interfere with the impugned orders and dismissed all the appeals related to the levy of interest u/s. 234A in the rectification order passed u/s 154 for the mentioned Assessment Years.

Judgment:
All three appeals challenging the levy of interest u/s. 234A in the rectification order passed u/s 154 were dismissed by the Tribunal on 17th August, 2022.