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2022 (4) TMI 585 - ITAT MUMBAIRectification of mistake u/s 154 - Disallowance u/s 14A r.w.r. 8D - Assessee was having its own interest free funds for making the investment - whether section 14A cannot be applied if assessee’s interest free funds are more than its investments yielding tax free income? - HELD THAT:- Issue of disallowance under section 14A in respect of indirect common interest expenditure as well as indirect common administrative expenditure is a debatable issue and does not fall in the ambit of an error apparent on record which could be rectified under section 154 of the Act. The Tribunal, in the earlier order has discussed various aspects and facts which are required to be considered to take a decision on the issue of disallowance under section 14A r.w.r. 8D of the Income-tax Act. Since the jurisdiction of the Assessing Officer to pass an order under section 154 to withdraw the relief granted under section 14A is held to be barred, therefore, both the issues involved in the cross appeals stand disposed of. Even otherwise, when the Revenue has not disputed the interest free funds with the assessee to invest in the shares and securities yielding tax free income, then no disallowance is called for under section 14A read with rule 8D(2)(ii). Accordingly, the appeal filed by the assessee is allowed and appeal filed by the Revenue for the assessment year 2009-10 is dismissed. Validity of reopening of the assessment after four years from the end of the assessment year - Claim of interest expenditure under section 40(a)(ia) for want of TDS - HELD THAT:- As decided in own case[2021 (3) TMI 1357 - ITAT MUMBAI]specific tangible information came into the possession of Ld. AO which revealed possible escapement of income in the hands of the assessee. Nothing more, in our opinion, was required at this stage. Undisputedly, once the case was reopened, the other issues of underassessment or escapement of income could also be examined by Ld. AO. AR has also pleaded that objections filed by the assessee were not disposed-off. However, the said plea has also no substance since the assessee, in response to notice u/.s 148, vide letter dated 04/09/2017, merely submitted that it had fully & truly disclosed all the particulars required for the assessment at the time of filing of return of income and at the time of various hearings for assessment u/s 143(3) whereas it is notable that case has been reopened on the basis of subsequent receipt of tangible information. Therefore, we concur with the view of Ld. CIT(A), in this regard and dismiss ground no.1 raised by the assessee. Disallowance u/s 40(a)(ia) - assessee was not able to explain the reason for non-deduction of tax at source with proper evidences - HELD THAT:- As decided in own case [2021 (3) TMI 1357 - ITAT MUMBAI]Tribunal has set aside this issue to the record of the Assessing Officer for verification and examination of the relevant evidence to be produced by the assessee to show that no TDS was required to be deducted or alternatively to prove the applicability of Second Proviso to section 40(a)(ia). Following the earlier decision of this Tribunal, we set aside this issue to the record of the Assessing Officer on same terms and directions. Applicability of provisions of section 115JB to the assessee bank - HELD THAT:- As provisions of section 115JB, as it stood prior to its amendment by virtue of Finance Act, 2012, would not be applicable to a banking company governed by provisions of Banking Regulation Act, 1949. In view of the above, this ground of appeal of the assessee is allowed and it is held that the provisions of section 115JB are not applicable to the assessee for this year and accordingly Ground No.4 is allowed. Charging of interest under section 220(2) - Dismissal of appeal of the assessee on the technical ground that the order passed under section 220(2) is not an appealable order - HELD THAT:- DR has not disputed this mistake and discrepancy in the computation made by the Assessing Officer while passing the giving effect order in pursuance to the order of the CIT(A). CIT(A) also granted part relief in respect of interest under section 244A of the Income-tax Act which shall have an effect on the demand of tax and consequential charging of interest under section 220(2) of the Income-tax Act. Therefore, a substantial relief was granted by the CIT(A) while passing the order dated 25/12/2012. But the Assessing Officer AO has passed the impugned order under section 220(2) without giving effect to the order of the CIT(A). It appears that the Assessing Officer has deliberately not passed any order to give effect to the order of the CIT(A) despite the fact that the assessee had already filed a petition under section 154 of the Income-tax Act to rectify the mistakes. Once the Assessing Officer has not challenged the order of the CIT(A) dated 25/10/2012, then the Assessing Officer is bound to follow the said order in letter and spirit. The non passing of the giving effect order amounts disobedience and judicial indiscipline on the part of the Assessing Officer which is a serious matter to be considered by the appropriate authority - Assessing Officer has acted in a highly arbitrary manner while passing the impugned order under section 220(2) for charging the interest without first determining the tax liability of the assessee in accordance with the issues settled in appeal. Accordingly, in the interest of justice, we set aside the orders of the authorities below and remand the issue to the record of the Assessing Officer to readjudicate the same after giving effect to the order of the CIT(A) dated 25/10/2012. Assessee’s appeal is allowed, for statistical purpose.
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