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TMI Blog2018 (1) TMI 669X X X X Extracts X X X X X X X X Extracts X X X X ..... calculated afresh. Therefore, we restore this appeal to the files of the A.O. to recalculate interest. The A.O. shall afford a reasonable opportunity of hearing to the assessee. The Assessing Officer shall also take note of the dictum laid down by the order of the Tribunal in the case of MBG Commodities (P.) Ltd. v. DCIT [2016 (8) TMI 82 - ITAT HYDERABAD] while calculating the interest u/s 234B of the Act, afresh. It is ordered accordingly. Appeal filed by the Revenue is allowed for statistical purposes - ITA No.53/Coch/2017 - - - Dated:- 4-1-2018 - Shri George George K, JM And Shri Manjunatha G, AM For The Appellant : Sri. A.Santhom Bose [CIT-DR] For The Respondent : Sri. V.Sathyanarayanan, CA ORDER Per George George K, JM This appeal at the instance of the Revenue is directed against the CIT(A) s order dated 30.12.2017. The order of the CIT(A) arises out of the order passed u/s 143 r.w.s. 263 of the Income-tax Act dated 12.10.2010. The relevant assessment is 1993-1994. 2. The grounds raised by the Revenue read as follows:- 1. The order of the learned CIT(Appeals) opposed to the legal tenet laid down for charging interest u/s.234B(4) of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 234B of the Act upto 20.03.2000, assessee preferred appeal to the first appellate authority. The CIT(A) held interest u/s 234B of the Act can be levied only upto 22.03.1996, i.e., the date of original assessment passed u/s 143(3) of the Act. The CIT(A) held that section 234B(3) of the I.T. Act is attracted only if the income assessed as per the order u/s 143(3) of the Act is increased by the order u/s 147 of the Act. It was further held by the CIT(A) if the income assessed u/s 143(3) of the Act is reduced as per the order u/s 147 of the Act, interest can be levied only u/s 234B(4) of the Act. The CIT(A) concluded that the section 234B(4) does not mention about terminus date and therefore the interest is levied only upto the period mentioned u/s 234B(1) of the Act. The relevant finding of the CIT(A) in restricting the levy / charging of interest u/s 234B of the Act reads as follow:- f) It is clear that on the facts of the instant case that there has been an assessment u/s 147 only subsequent to a regular assessment u/s 143(3) of the Act, and such reassessment followed by various Appellate orders and the consequential orders of the AO giving effect to such Appellate order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Applitech Solutions Ltd. [Tax Appeal No. 887 of 2015], which has been cited by the Appellant and is held to be squarely applicable on the facts of the instant case. i) Going even further, the position that there is no fundamental difference between an assessment u/s 143(3) and u/s 147 in deciding the date until which the applicability of Section 234B could be reckoned has been held by various Hon'ble Courts including the Hon'ble Punjab and Haryana High Court in the case of Smt. Kamla Vati v. Commissioner of Income Tax (Centra/), Patiala. (1978) 111 ITR 248, the Hon'ble Madras High Court in the case of K.Gopalaswami Mudaliar v. Fifih Addl.ITO (1963) 49 ITR 322 (Mad), the Hon'ble Delhi High Court in the case of National Agricultural Cooperative Marketing Federation of India(1982) Tax LR 417 (Del) and the Hon'ble Kerala High Court in the case of Lally Jacob vs. IT0(1992) 197 ITR 439 (Ker.) all of which have been further sanctified by the judgment of the Hon'ble Supreme Court in the case of M/s K. Govirulan and Sons vs. Commissioner of Income Tax, Cochin [AIR 200 I SC 254]. However, all of these will become favourable to Revenue only when there is an incr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is to be charged for the period of 0 1.04.1996 to 20.03.2000 (viz. 48 months) on an amount of ₹ 98,49,240/- being the addition on account of the deduction claimed u/s 80HHC of the Act that was made and assessed vide order 20.03.2000, is hindered by the visible fact that the taxable income of the Appellant has reduced from ₹ 21,55,66,620/- assessed in the Order passed u/s 143(3) dated 22.03.1996 to ₹ 14,70,65,440/- in the Order passed u/s 143(3) r.w.s. 147 dated 20.03.2000. However, this fact may be, for clarity's sake, in view of the large number of orders passed and the antiquity of the case, once again be verified by the AO. If and only if there is an increase in taxable income from assessment to reassessment can there be any levy of interest u/s 234B of the Act. Such action may be taken by the A.O. if the facts so demand. Consequently, subject to the verifications directed to be carried out by the Assessing Officer as above, Ground Numbered 2 is allowed. 5. Aggrieved by the order of the CIT(A), the Revenue has filed the present appeal before the Tribunal. The learned Departmental Representative relied on the grounds raised in the memorandum of appeal. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITAT order passed u/s 2151 for the appeal filed against CIT(A) order of assessment and reassessment. 28 Mar 2007 Partially allowed 9. Appeal effect order dated 09/04/2007 passed by AO post ITAT, Kochi order dated 28/03/2007 09 Apr 2007 7,03,08,250 3,63,84,519 10 Revision order passed by Commissioner of Income Tax u/ 263 on 08/03/2010 against appeal effect order passed by AO on 09/04/2007 08 Mar 2010 11 Appeal effect order passed by AO dated 12/10/2010 u/s 263 r.w.s. 143(3) r.w.s. 147 r.w.s. 251 post revision order of CIT dated 08/03/2010 12 Oct 2010 7,39,58,580 3,82,73,565 12 CIT(A) order dated 30/12/2016 for the appeal filed against appeal effect order passed by AO on 12/10/2010 30 Dec 2016 Appeal allowed in favour of the assessee. 13 Appeal effect order passed by AO u/s 250 r. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation order, revisionary orders etc., The section 234B(4) states that if there is any increase or decrease in the income, correspondingly interest shall be increased or reduced accordingly. In the instant case, since reassessment u/s 147 of the Act was completed and in the reassessment the assessed income being higher, the interest is to be calculated as per section 234B(3) of the Income-tax Act, instead of section 234B(4) of the Income-tax Act. 6.3 The judgment of the Hon ble Gujarat High Court relied on by the learned Counsel for the assessee in the case of Principal Commissioner of Income-tax-1 v. Applitech Solutions Ltd. [(2016) 55 taxmann.com 124 (Gujarat)] is distinguishable on the facts. The Hon ble High Court was considering a case where the interest was levied u/s 234B of the Act while giving effect to the order of the Tribunal. As mentioned earlier while giving effect to the appellate order, the section 234B(4) will have application and not section 234B(3) of the Act. 6.4 The Assessing Officer had levied interest u/s 234B from 1st April 1993 upto the date of reassessment u/s 147 of the Act. According to the learned AR, this calculation of interest is patently wron ..... X X X X Extracts X X X X X X X X Extracts X X X X
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