TMI Blog2016 (5) TMI 973X X X X Extracts X X X X X X X X Extracts X X X X ..... ection(1) of section 234B. We Therefore,, hold that the AO is justified in coming to the conclusion that the starting point for charging interest u/s.234B have been as First April 2011 and end point of the same is 27.06.2014 and as such there is no error in the assessment order so as to rectify u/s.154 of the Act. More so, the issue raised by the assessee herein cannot be considered u/s.154 of the Act as the issue in dispute is highly debatable. Under section 154 of the Act, only mistakes apparent on record could be rectified by the Authorities. The issue in dispute is not a mistake apparent from record. It is required long process of reasoning and points on which there may be conceivably two opinions possible. As such the issue in dispute cannot be considered u/s.154 of the Act. - Decided against assessee - I.T.A.No.545/Mds./2016 - - - Dated:- 20-5-2016 - SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND Shri Duvvuru RL Reddy, JUDICIAL MEMBER For The Appellant by : Mr.M.Karunakaran,Advocate For The Respondent : Mr.A.V.Sreekanth,JCIT,D.R ORDER PER CHANDRA POOJARI, ACCOUNTANT MEMBER This appeal of the assessee is directed against the order of the Commissione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was reopened u/s 147 of the Act. In response to the notice u/s 148, the assessee filed the return of income on 06/01/2014 admitting a total income of ₹ 5,21,75,557/-. On 27/06/2014 the assessment was made for the first time and was completed u/s 143 (3) r.w.s. 147 which resulted in tax demand of ₹ 1,23,150/-. Against this assessment order, the assessee had filed an application before the AO on 10/7/2014, seeking rectification u/s 154 of the Act. In the application, the assessee stated that the interest u/s 234B is wrongly calculated as per the provisions of section 234B (1), whereas, it should have been calculated as per the provisions of section 234B (3). It was observed by the AO that the issues raised by the assessee do not constitute rectifiable mistake warranting rectification u/s 154 of the Act and hence, rejected the rectification application of the assessee. 3.2 The assessee had filed the present appeal against this rectification order of the AO before the Ld.CIT(A). Before CIT(A), ld.A.R submitted that the assessment being a re-assessment u/s 148 of the Act, the interest should have been calculated as per the provisions of section 234B (3) and not u/s 234B ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... where a regular assessment is made, the tax on the total income determined under such regular assessment as reduced by the amount of . Further, as per Explanation 2 it is clarified that where, in relation to an assessment year, an assessment is made for the first time u/s 147 or section 153A, the assessment so made shall be regarded as a regular assessment for the purposes of this section. 3.3 From the perusal of section 234B(1), it becomes evident that for the purposes of calculating interest u/s 234B, the re-assessment u/s 147 shall be treated as regular assessment if the assessment is made for the first time. In the present case, the reassessment is done for the first time. There was no scrutiny assessment u/s.143(3) prior to this re-assessment order. Therefore, Explanation 2 to section 234B (1) is applicable to the present case of the assessee. Secondly, the assessed tax in this case means the tax assessed by the AO in the reassessment order which has been treated as regular assessment. Hence, in view of the above provisions of the Act, the AO has rightly calculated the interest to be levied u/s 234B by invoking subsection (1) of section 234B. Therefore, the contention of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t' within its fold, subject to the fulfilment of other conditions. This section provides that : 'If the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153, ASSESS or REASSESS such income...' [Emphasis supplied]. From here it is palpable that section 147 refers to the making of assessment or reassessment when the income escapes assessment. Whereas 'assessment' in this section refers to the making of assessment for the first time, the 'reassessment' pre-supposes the existence of an earlier assessment. This position is further clarified by the Explanation 2 to section 147. Clause (a) of this Explanation deems income escaping assessment even when no return has been filed by the assessee. Clause (b) covers within its ambit the cases where a return of income has been filed but no assessment is made. Clause (c) extends to the cases where an assessment has been made but still income chargeable to tax has been under assessed or such income has been assessed at too low a rate, etc. Section 234B extends to both the cases under section 147, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 234B(1) of the Act, which is to be regarded as Regular Assessment for the purpose of sec.234B of the Act. As intimation u/s.143(1) is obviously not an assessment and it is the case of Assessment for the first time in the hands of assessee u/s.147, the case will fall under sub-section(1) of section 234B. We Therefore,, hold that the AO is justified in coming to the conclusion that the starting point for charging interest u/s.234B have been as First April 2011 and end point of the same is 27.06.2014 and as such there is no error in the assessment order so as to rectify u/s.154 of the Act. 6. More so, the issue raised by the assessee herein cannot be considered u/s.154 of the Act as the issue in dispute is highly debatable. Under section 154 of the Act, only mistakes apparent on record could be rectified by the Authorities. The issue in dispute is not a mistake apparent from record. It is required long process of reasoning and points on which there may be conceivably two opinions possible. As such the issue in dispute cannot be considered u/s.154 of the Act. No such judgements relied by the assessee s counsel including the judgement of Karnataka High Court in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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