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2016 (5) TMI 973 - ITAT CHENNAI

2016 (5) TMI 973 - ITAT CHENNAI - TMI - Rectification of mistake - charging 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) - Held that:- Determination of “total income” under sub-section (1) of section 143 was made on 21.02.2012. No regular assessment was made u/s.143(3) of the Act. Notice was issued u/s.148 of the Act on 02.01.2014 and assessment was made u/s.143(3) of the Act r .....

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sessment ” 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.

More so, the issue raised by the assessee herein cannot be considered u/s.154 o .....

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NT 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 Commissioner of Income-tax (Appeals)-4,Chennai dated 06.01.2016 pertaining to assessment year 2011-12. 2. The assessee has raised the following grounds. 1. The learned Commissioner of Income-tax (Appeals) erred in confirming the order of the .....

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ment under section 147 and therefore it is a regular assessment and consequently the provisions of section 234B(1) would apply by completely ignoring the fact that there was an intimation under section 143(1) in the appellant s case determining the tax liability for the assessment year 2011-12. 4. The appellant submits that this was not a case of assessment made for the first time but it was a case of order of reassessment or re-computation under section 147 and therefore the interest has to be .....

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x Appellate Tribunal, Mumbai in the case of Sri Gopal Agarwal in ITA Nos. 7076 & 70771M12012 dated 3111212015. 6. The appellants therefore pray that the assessing officer may be directed to allow the application under section 154 by charging the interest as per the provisions of section 234B(3) instead of under section 234B(1) and render justice. 3.1 The facts of the case are that the assessee filed its return of income on 06.08.2011 admitting total income of ₹ 1,92,09,210/- which was .....

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e 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 app .....

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visions of section 234B (3) would apply. Therefore, it was contended that the period should be reckoned for the purpose of levy of interest from the day following the day of determining of the total income u/s 143 (1) till the date of the reassessment u/s 147. The assessee has further pleaded that in the present case the date of intimation is admittedly on 21/2/2012 and the reassessment was made on 27/6/2014, hence, the period to be reckoned is from 22/2/2012 to 27/6/2014 and not from the date o .....

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7 of the Act. The Ld.CIT(A) observed that it is ascertained from the facts of the case that the AO has rightly worked out the interest u/s 234B as per the provisions of subsection (1) of section 234B. The relevant section is reproduced as under: Subject to the other provisions of this section, where, in any financial year, an assessee who is liable to pay advance tax under section 208 has failed to pay such tax or, where the advance tax paid by such an assessee under the provisions of section 21 .....

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paid as aforesaid falls short of the assessed tax. It has been further clarified in Explanation-1 to the above sub-section that assessed tax means the tax on the total income determined under subsection (1) of section 143 and 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 ti .....

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herefore, 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 the assessee that the interest should have been calculated under sub-se .....

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t day of April next following such financial year, and not from the date of determination of tax u/s 143(1), to the date of regular assessment u/s 147. Aggrieved by the order of the CIT(A), the assessee is in appeal before us. 4. We have heard both the parties and perused the material on record. In this case, the main pleas of the ld. AR is that the provisions of sub-section (3) of section 234B should be invoked as the assessment in this case was made only under section 147 and as such, the inte .....

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ular assessment. If the contention of the ld. AR is accepted that in a case where there is an assessment under section 147, then invariably the interest should be charged under section 234B(3) from the date of determination of income under section 143(1) or the date of original regular assessment, then the provisions of Explanation 2 to sub-section (1) of section 234B shall become otiose. The view so canvassed on behalf of the assessee is not legally sustainable. The opening words of sub-section .....

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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 .....

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ses under section 147, viz., where it is assessment (that is, assessment for the first time) and reassessment (that is, where it is not the first assessment). There is a clear cut line of demarcation. The cases of 'assessment' under section 147 are covered under sub-section (1) of section 234B, by way of Explanation 2, the cases of 'reassessment' under section 147 are covered under sub-section (3). The further submission made on behalf of the assessee that the Heading or Marginal .....

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y be relied upon to clear any doubt or ambiguity in the interpretation of the provision and to discern the legislative intent, it cannot control the meaning of the body of the section if the language employed there is clear. Similar view has been taken by the Hon'ble jurisdictional High Court in Dharamvat Provisions Store v. CIT [1983] 139 ITR 700(Bom.). We, therefore, jettison this contention advanced on behalf of the assessee for the reason that the language of sub-section (1) of section 1 .....

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