2023 (5) TMI 54 - AT - Income Tax

Rectification of mistake u/s 154 - levying interest u/s 234A - HELD THAT - Assessee had filed her former return u/s. 139 (4) of the Act without payment of self assessment tax qua the admitted income - Revenue could hardly dispute that sec.139(9) of the Act is a specific provision wherein an AO could held a return as a defective one after following the due procedure as per Explanation (c) (i) thereto which treats a return filed by an assessee to be defective only if there is self-assessment tax claimed to have been paid and not otherwise. It is in this factual backdrop that the tribunal s learned coordinate bench in Meters and Instruments Pvt. Ltd 1991 (9) TMI 123 - ITAT DELHI-D has carved out a clear-cut distinction between cases where an assessee claims payment of tax and otherwise. We are of the opinion that the assessee s above former return dated 08.02.2013 could not have been treated as a defective one so as to trigger applicability of sec.234A interest herein levied in sec.154 rectification proceedings in issue. Both the learned lower authorities action to this effect stands reversed therefore. The assessee s arguments stands accepted in very terms - Assessee appeal allowed.

Summary

Issues involved: Condonation of delay in filing appeal, Enhancement of interest u/s 234A, Rectification order u/s 154, Validity of former return, Levying of sec.234A interest.

Condonation of Delay in Filing Appeal: The delay of 37 days in filing the appeal was condoned due to communication gaps, citing the principle of substantial justice. The appellant's reasons for the delay were accepted, and the Revenue failed to rebut them.

Enhancement of Interest u/s 234A: The appellant contested the enhancement of interest u/s 234A, arguing that the order was bad in law and the interest was not correctly levied. The appellant requested cancellation of the order u/s 154, stating that the rectification order was invalid and the interest enhancement was unwarranted.

Rectification Order u/s 154: The Assessing Officer passed a rectification order to levy sec.234A interest, based on the assessee's former return being considered defective. The NFAC affirmed this action, leading to a dispute over the validity of the former return and the subsequent interest levied.

Validity of Former Return: The appellant argued that the former return was valid under sec.139(9A), contrary to the lower authorities' view. The appellant contended that the return was not defective, as claimed by the Assessing Officer, and challenged the initiation of sec.154 rectification proceedings.

Levying of sec.234A Interest: The tribunal found no merit in the Revenue's arguments and accepted the appellant's stance. It was determined that the former return could not be treated as defective, as it did not trigger the applicability of sec.234A interest. Consequently, the lower authorities' actions were reversed, and the appeal was allowed.

*Order pronounced in the open Court on 24.03.2023.*