2024 (3) TMI 309 - AT - Income Tax

Rectification u/s 154 - Chargeability of interest u/s 234B and 234C - income returned u/s 115JB - assessment order framed u/s 153A held as barred by limitation by the CIT(A) - while giving appeal effect to the CIT(A)'s order, the Assessing Officer introduced a new issue of charging interest under sections 234B and 234C, which was not part of the original assessment or appeal. - HELD THAT - There is no dispute that while giving appeal effect the Assessing Officer introduced a new issue of charging of interest which was never there in the earlier orders of the appellate authority. Therefore, we fail to understand how the AO can assume jurisdiction for introducing a new issue while giving appeal effect to the order of the appellate authority. AO processed the revised return on 31.03.2010 u/s 143(1) of the Act wherein he charged interest u/s 234B and 234C of the Act. This intimation was challenged before the ld. CIT(A) who set aside the order holding that after section 143(3) of the Act, section 143(1) cannot be done and the Revenue was not in appeal. Therefore, this order has attained finality. Subsequently, after search assessment u/s 153A of the Act was completed vide order dated 31.03.2015 which was rectified u/s 154 on 16.01.2017 and income was assessed u/s 115JB - In this rectification also, no interest was charged u/s 234B and 234C of the Act. Appeal against the order u/s 153A of the Act on account of additions made in normal income was deleted by the ld. CIT(A) vide appellate order dated 31.03.2017. The appeal effect was given vide order dated 06.07.2017. Now the Assessing Officer wants to rectify this order giving appeal effect by introducing a new issue of charging interest u/s 234B and 234C of the Act. Thus Assessing Officer has exceeded his jurisdiction by rectifying appeal effect order for charging interest u/s 234B and 234C of the Act when the same was not material issue in order u/s 153A of the Act and also not in appellate order of the ld. CIT(A). No reason to interfere with the findings of the ld. CIT(A). Revenue appeal dismissed.

Summary

Issues Involved:
The legal judgment involves issues related to the correctness of charging interest under sections 234B and 234C of the Income-tax Act, 1961, the jurisdiction of the Assessing Officer to introduce new issues while giving appeal effect, and the finality of previous orders regarding the charging of interest.

Issue 1: Charging of Interest under Sections 234B and 234C:
The Revenue appealed against the correctness of charging interest under sections 234B and 234C. The Assessing Officer introduced this issue while giving appeal effect, which was held as barred by limitation by the CIT(A). The Tribunal found that the Assessing Officer exceeded jurisdiction by introducing this new issue, as it was not part of previous orders. The Tribunal upheld the CIT(A)'s decision, emphasizing that interest cannot be charged through rectification orders on issues not present in previous orders.

Issue 2: Jurisdiction of the Assessing Officer:
The judgment addressed the jurisdiction of the Assessing Officer to introduce new issues while giving appeal effect. It was noted that the Assessing Officer cannot assume jurisdiction to introduce new issues not present in earlier orders of the appellate authority. The Tribunal held that the Assessing Officer exceeded his jurisdiction by trying to rectify the appeal effect order to charge interest under sections 234B and 234C, as this issue was not material in previous orders.

Issue 3: Finality of Previous Orders:
The Tribunal considered the finality of previous orders regarding the charging of interest under sections 234B and 234C. It was highlighted that the Assessing Officer had previously charged interest under these sections, but subsequent orders did not include such charges. The Tribunal concluded that interest could not be charged through rectification orders on issues not previously addressed, and upheld the decision of the CIT(A) to dismiss the appeals of the Revenue.

The judgment emphasizes the importance of adhering to jurisdictional boundaries, maintaining consistency in decisions, and ensuring that interest charges are based on relevant issues present in earlier orders. The Tribunal's decision to dismiss the Revenue's appeals underscores the need for proper legal justification and adherence to procedural requirements in tax assessments.