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2022 (9) TMI 245 - AT - Income TaxLevy of interest u/s.234D - interest was levied in the order u/s.143(3) r.w.s. 147 and not in the order U/s.154 - HELD THAT - In the order U/s.143(3) r.w.s 147 of the act, the AO has levied interest under the provisions of 234D of the act. AO then issued a notice U/s.154 proposing recompute the interest U/s.234B(3). In response to proposal u/s.154 of the act issued by the Assessing Officer the assessee filed an objection vide letter dated 22.07.2021 for the enhancement of interest U/s.234B(3) of the act. Apart from this the assessee requested for rectification of interest levied U/s.234D of the act and also disallowance under the provisions of section 14A of the act. The Assessing Officer without considering the objection filed has passed an order U/s.154 of the act stating that, however, the assessee chose not to file any objection on or before the specified date. In view of the above, it is presumed that the assessee has no objection to the said proposal. Accordingly the order u/s.143(3) r.w.s 153D was rectified. AR at the outset submitted that the original quantum addition made by the Ld.AO u/s. 143(3) order is pending before the Ld.CIT(A). As submitted that in the meanwhile by way of the 154 order, the Ld.AO has enhanced the addition. He prayed that this appeal may also be remanded to the Ld.CIT(A) to be considered together. DR did not object for the issue to be remanded to the Ld.CIT(A). Accordingly, we remand this issue back to the Ld.CIT(A). It is directed that the Ld.CIT(A) is directed to consider the claim raised by assessee in this appeal along with the quantum appeal which is said to be pending adjudication. Grounds raised by assessee stands allowed for statistical purposes.
Issues:
1. Levy of interest under section 234D of the Income Tax Act. 2. Rectification of interest levied under section 234D. 3. Applicability of section 234B(3) of the Income Tax Act. 4. Retrospective application of provisions of section 234B(3). 5. Consideration of objections filed by the assessee. Levy of Interest under Section 234D: The appeal was filed against the order of the Commissioner of Income Tax (Appeals) regarding the levy of interest under section 234D of the Income Tax Act. The assessee challenged the dismissal of grounds related to the interest levied, arguing that the interest was not correctly applied under the law. The appellant contended that the order under section 154 of the act should rectify any mistakes from the original order under section 143(3) r.w.s 147. The Tribunal remanded this issue back to the Commissioner of Income Tax (Appeals) for further consideration along with the pending quantum appeal. Rectification of Interest Levied under Section 234D: The Assessing Officer issued a notice under section 154 of the act to recompute the interest under section 234B(3). The assessee objected to this proposal and requested rectification of the interest levied under section 234D. However, the Assessing Officer proceeded to pass an order under section 154 assuming that the assessee had no objection to the proposal. The Tribunal directed the Commissioner of Income Tax (Appeals) to consider the objections raised by the assessee in conjunction with the pending quantum appeal. Applicability of Section 234B(3) of the Income Tax Act: The appellant contested the application of section 234B(3) of the Income Tax Act, arguing that it should not be applied retrospectively to the assessment year 2011-12. The Commissioner of Income Tax (Appeals) relied on certain court decisions to support the retrospective application of the provision. However, the appellant maintained that these decisions were not directly relevant to section 234B(3) of the act. Retrospective Application of Provisions of Section 234B(3): The dispute arose regarding the retrospective application of section 234B(3) of the Income Tax Act. The appellant disagreed with the Commissioner of Income Tax (Appeals) and argued that the provision should not be applied retrospectively to assessments made before the effective date of the amendment. The Tribunal did not provide a specific ruling on this issue but remanded it back to the Commissioner of Income Tax (Appeals) for further consideration. Consideration of Objections Filed by the Assessee: The assessee raised objections to the proposal under section 154 of the act, requesting rectification of interest levied under section 234D and disallowance under section 14A of the act. Despite the objections, the Assessing Officer proceeded to pass the order under section 154 without considering the contentions raised by the assessee. The Tribunal directed the Commissioner of Income Tax (Appeals) to review these objections in conjunction with the pending quantum appeal for a comprehensive assessment. In conclusion, the Tribunal's judgment addressed various issues related to the levy of interest under different sections of the Income Tax Act, the rectification process, the applicability of specific provisions, and the consideration of objections raised by the assessee. The Tribunal remanded certain issues back to the Commissioner of Income Tax (Appeals) for further examination, ensuring a thorough review of the legal aspects involved in the case.
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