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2007 (5) TMI 259 - AT - Income TaxOrder passed by AO u/s 154/254 - Charging interest u/s 234B - upto which date interest u/s 234B can be admitted - deduction u/s 80-O - convertible foreign exchange - mistake apparent from records - notice u/s 154 - HELD THAT:- We are of the opinion that charging of interest u/s 234B is not debatable as after the order passed by ITAT determining the deduction u/s 80-O on net basis, the Assessing Officer worked out the interest u/s 234B and charged the same up to the date of the assessment order and vide ITNS 150 created a demand and issued notice to the assessee for payment of interest u/s 234B and the same was also paid by the assessee. It further means that up to the creation of demand of interest u/s 234B by the Assessing Officer and the payment of the same by the assessee in response to ITNS 150 the assessee was not aggrieved and so there was no question of there being any dispute in the mind of the assessee with respect to charging of interest u/s 234B of the Act after the order of the ITAT on account of the issue of deduction claimed by the assessee u/s 80-O on gross basis and allowed by the ITAT on net basis. We find that the argument raised for the first time by the assessee, i.e., since the claim of deduction u/s 80-O was debatable the interest u/s 234B could not be levied against the assessee u/s 234B, is not relevant and is meaningless keeping in view the facts and circumstances because from a bare reading of provisions of section 234B, as well as the decision of Apex Court in the cases of Anjum M.H. Ghaswala and Modi Industries Ltd.[2001 (10) TMI 4 - SUPREME COURT], it is evident that the Assessing Officer is duty bound to charge the interest u/s 234B of the Act as per the order of ITAT up to the date of the order of assessment passed by the Assessing Officer and not up to the date of the order passed by the Assessing Officer and after the date of the order of passed by the ITAT. Hence, now it cannot be said that in the instant case the charging of interest u/s 234B was debatable irrespective of the deduction claimed by the assessee u/s 80-O of the Act. Accordingly all the arguments put forth by the assessee regarding the debatable issue raised before us have no merits and are rejected. Assessee has not been able to establish before us that it is not liable to pay any interest u/s 234B of the Act after the order passed by the ITAT and, hence the other argument of the learned AR for the assessee that it has not received any notice issued by the Assessing Officer u/s 154 of the Act has no merits because in the instant case the assessee has sent a reply to the notice issued u/s 154 of the Act and the Assessing Officer after considering the reply of the assessee has passed the impugned order u/s 254/154 of the Act and accordingly this plea of the assessee being devoid of any merit is hereby rejected. Assessing Officer has charged interest u/s 234B of the Act up to the date of the order passed by him in consequence of the order of ITAT by passing an order u/s 254/154 of the Act. This is certainly against the decision of the Apex Court in the case of Modi Industries Ltd.[1995 (9) TMI 324 - SUPREME COURT] as well as Full Bench in the case of Carona Sahu Co. Ltd.[1983 (10) TMI 44 - BOMBAY HIGH COURT] [approved by the Apex Courtland, hence, the order passed by the Assessing Officer u/s 254/154 of the Act charging interest u/s 234B of the Act up to the date of the order passed by him in consequence of the order of the ITAT is against the provisions of Law and, hence, the same cannot be upheld and consequently the same has been wrongly been upheld by the CIT(A) and, accordingly, the order of the CIT(A) in this regard is set-aside to this extent. Thus, the grounds of appeal taken by the assessee stands disposed of accordingly. In the result, the instant appeals filed by the assessee are partly allowed.
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