TMI Blog2007 (8) TMI 492X X X X Extracts X X X X X X X X Extracts X X X X ..... e that the same Assessing Officer could not have passed an order under section 154 with regard to levy of interest under section 234B(1) of the Act on which she had already passed an order under section 154 of the Act reducing interest levied originally in accordance with section 234B(3) of the Act. 3.The Ld. CIT (Appeals) erred in holding that the levy of interest under section 234B in the case of recomputation of income under section 147 of the Act was governed by section 234B(1) as against 234B(3) of the Act. 3. Brief facts of the case are that, the assessee is a firm who filed its return of income. The return was processed under section 143(3) read with section 147 of the Act on 31-12-2002 determining the taxable income at Rs. 26, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wever was not satisfied with the submissions of the assessee and held that charging of interest under section 234B is mandatory and in case the assessee has made the default in paying the advance tax, charging of interest under section 234B is mandatory and automatic by operation of law and therefore there was a mistake apparent from record for the period considered with effect from 23-9-2000 and the same should now be taken from 1-4-1998. He therefore rectified the order. 4. Aggrieved, assessee filed an appeal before the CIT(A) who upheld the order of the Assessing Officer. Aggrieved, assessee is in appeal before us. 5. The learned counsel for the assessee submitted that the Assessing Officer had duly applied his mind while passing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mlata Jalani [2003] 264 ITR 744 . 6. The ld. DR, on the other hand, supported the orders of the authorities below and submitted that the wrong application of law is a mistake apparent from record and is rectifiable under section 154 of the Income-tax Act. He submitted that the provisions of section 234B were very clear and the Assessing Officer in the assessment under section 147 of the Act had correctly charged interest under section 234B from 1-4-1998 as the assessee failed to pay advance tax. He subsequently committed a mistake while passing order under section 154 of the Act by observing that interest is chargeable from the date of intimation under section 143(1)( a ). The wrong application of law is a mistake apparent from record ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar assessment was completed. Subsequently, the Assessing Officer rectified the order, charging interest from the date of intimation under section 143(1)( a ) to the date of regular assessment. The question before us is whether the Assessing Officer is justified in passing an order, under section 154 of the Act rectifying the assessment order for the second time. The assessee s contention is that the Assessing Officer, while passing the order under section 154 for the first time had applied her mind to the facts of the case and has held that the interest is chargeable from the date of intimation under section 143(1)( a ). The subsequent rectification of the rectified order is nothing but change of opinion and if this was permitted, there wou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o pay such tax or, where the advance tax paid by the assessee under the provisions of section 210 is less than ninety per cent of the assessed tax, the assessee shall be liable to pay simple interest at the rate of one per cent for every month or part of a month comprised in the period from the 1st day of April next following such financial year to the date of determination of total income under sub-section (1) of section 143 and where a regular assessment is made, to the date of such regular assessment, on an amount equal to the assessed tax or, as the case may be, on the amount by which the advance tax paid as aforesaid falls short of the assessed tax. Explanation 1. ****** Explanation 2 Where, in relation to an assessment year, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessed tax. Explanation 2 to sub-section (1) of section 234B also provides that where an assessment for the first time is made under section 147 or under section 153A, the assessment so made shall be regarded as the regular assessment for the purpose of this section. In the case on hand the return was initially processed under section 143(1)( a ) and subsequently assessment was completed under section 147 read with section 143(3) of the Act. As held by the jurisdictional High Court in the case of Rajkumar Dipchand Phade ( supra ) the intimation under section 143(1) is a summary assessment. By applying the Explanation 2 to sub-section (1) of section 234B, the assessment done under section 147 is the regular assessment for the pur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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