2023 (5) TMI 160 - AT - Income Tax

Rectification proceedings u/s 154 - raising interest demand u/s 234A - Whether defective return filled by assessee? - HELD THAT - This tribunal s recent coordinate bench s order in assessee s co-owner Mrs. Sawari Sameer Shinde Pune vs. ITO 2023 (3) TMI 922 - ITAT PUNE rejected the Revenue s very contentions assessee s above as former return 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. Applicability of sec.139(9) Explanation (c) (i) still gets attracted in the instant case since the taxpayer before us namely Shri Siddhant Machindra Mhaske had nowhere claimed to have paid self-assessment tax at the time of his earlier return. We thus reject Revenue s arguments supporting both the learned lower authorities identical action raising sec.234A interest demand - Decided in favour of assessee.

Summary

Issues involved:
The judgment involves the assessment year 2011-2012, concerning the enhancement of interest under section 234A by the Assessing Officer in the order under section 154 of the Income Tax Act, 1961.

Issue 1: Enhancement of interest under section 234A:
The appellant contended that the order under section 154, enhancing interest under section 234A by a specific amount, was erroneous. The appellant argued that the original return filed without payment of tax could not be considered defective, and thus, the assessment had become time-barred. The appellant further claimed that interest under section 234A could only be levied up to the date of filing the original return, not until the date of filing in response to a notice under section 148.

Issue 2: Validity of rectification order under section 154:
The appellant requested the cancellation of the order under section 154, asserting that the rectification order of an invalid reassessment was legally flawed. The appellant argued that the issue of enhancing interest under section 234A did not constitute a mistake apparent from the record, and therefore, the order under section 154 should be revoked.

Issue 3: Interpretation of section 139(9) and applicability of section 234A interest:
The tribunal analyzed the provisions of section 139(9) concerning the declaration of a return as defective and invalid. It was observed that the appellant had not claimed to have paid self-assessment tax at the time of filing the original return. The tribunal rejected the Revenue's argument supporting the levy of interest under section 234A, as the appellant's return could not be considered defective under the given circumstances.

Separate Judgment:
In a separate judgment, the tribunal referred to a previous case where similar contentions were raised and rejected. The tribunal emphasized the distinction between cases where an assessee claims payment of tax and cases where no such claim is made, highlighting the specific provisions of the law regarding the filing of returns without attaching proof of tax payments. The tribunal concluded that the appellant's former return could not be deemed defective, thereby reversing the lower authorities' decision to raise interest under section 234A.