TMI Blog2007 (1) TMI 295X X X X Extracts X X X X X X X X Extracts X X X X ..... of completion of reassessment under section 143(3) read with section 147] and thereafter, by interpreting the provisions of section 234B(1) levied interest for the period 1-4-1998 to 27-3-2002 which, according to the CIT(A), was outside the purview of the provisions contained in section 154 as there are two views possible as regards the chargeability of interest under section 234B(1) and 234B(3) and, accordingly, holding that the order under section 154 was liable to be cancelled as bad in law. 3. On the facts and in the circumstances of the case and in law, the ld. CIT(A) failed to take cognizance of the fact that in the computation of interest under section 234B as per ITNS-150 dated 27-3-2002, which was part of the assessment order, there was a mistake apparent from record inasmuch as the Assessing Officer had computed the interest under section 234B(3) of Rs. 9,26,612 for the period January 2001 to 27-3-2002 whereas, section 234B(3) mandates that whereas a result of an order of reassessment or re-computation under section 147 or section 153A, the amount on which interest was payable under sub-section (1) is increased, the assessee shall be liable to pay simple interest at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mistake and not something which can be established by a long drawn process of reasoning on point on which there may be conceivably two opinions which is based on irrelevant consideration and vague legal interpretation and, as a result, unjustifiably holding the action of the Assessing Officer as bad in law and beyond the jurisdiction under section 154. 6. On the facts and in the circumstances of the case and in law, the ld. CIT(A) has erred in not adjudicating upon Ground No. 2 as Ground No. 1 has already been allowed." [Emphasis supplied] 2. Notice for hearing of the appeal filed by the Department was issued to the respondent-assessee fixing the appeal for hearing on 31-8-2006 and 27-9-2006. The assessee did not appear on the dates fixed for hearing. We shall, therefore, proceed to dispose of the appeal on merits. 3. Briefly stated, the facts of the case are that the assessee, an individual, filed his return of income before the Assessing Officer on 27-11-1998 declaring his total income at Rs. 1,00,48,160, which was processed under section 143(1) on 27-12-2000. Interest under section 234B(1) was levied in the intimation issued under section 143(1). Notice under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the Assessing Officer had already determined income under sub-section (1) of section 143, and, in this view of the matter, had also charged interest under section 234B(1) at that stage. He submitted before the CIT(A) that provisions of sub-section (1) of section 234B could not be applied to cases of reassessment for which a separate section, namely, sub-section (3) has been inserted. He contended before the CIT(A) that sub-section (3) would enable the Assessing Officer to charge incremental interest if the order of reassessment or re-computation made under section 147 had the effect of increasing the total income determined under sub-section 143(1). He submitted before the CIT(A) that interest under sub-section (3) could be charged for every month or part of month following the date of determination of total income under section 143(1) and ending on the date of the reassessment or re-computation under section 147 on the amount by which the tax on the total income determined on the basis of reassessment or re-computation exceeded the tax on the total income determined under section 143(1) or on regular assessment. The ld. CIT(A) took the view that it was a debatable issue as to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment passed under section 143(3)/147. This position, in our view, is quite clear, obvious and patent on bare perusal of the statutory provisions and therefore does not admit of any debate. The action of the Assessing Officer in incorporating the interest originally charged under section 234B(1) as per intimation, in the computation sheet accompanying the reassessment order is therefore correct. 7. We shall now take up the issue as to whether the Assessing Officer is justified in charging interest under section 234B(3) from 1-4-1998 ( i.e., the first day of the assessment year under appeal) to 27-3-2002 ( i.e., the date of completion of reassessment under section 143(3)/148. While sub-section (1) of section 234B is applicable to cases involving determination of total income under section 143(1) or regular assessment made under section 143(3) or 144 of the I.T. Act, sub-section (3) of section 234B is applicable, inter alia, to a case where the amount of tax on the total income determined on the basis of reassessment or re-computation under section 147 exceeds the tax on the total income originally determined under sub-section (1) of section 143. It is not in dispute that th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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