2017 (3) TMI 1577 - AT - Income Tax

Tribunal directs AO to recompute interest, considering tax deducted at source. Precedent set by Co-ordinate Bench.

The Tribunal allowed the appeal for statistical purposes, directing the AO to recompute interest under sections 234A, 234B, and 234C by considering tax ... Interest under sections 234A, 234B and 234C - treatment of tax deductible at source in computation of interest - recomputation of interest by Assessing Officer on remand - followed coordinate bench precedentInterest under sections 234A, 234B and 234C - treatment of tax deductible at source in computation of interest - recomputation of interest by Assessing Officer on remand - Recomputation of interest under sections 234A, 234B and 234C after taking into account tax deductible at source on the income assessed, and restoration of the matter to the Assessing Officer for that purpose. - HELD THAT: - The Tribunal noted that the identical contention has been decided in favour of the assessee by a Coordinate Bench in paras 6 and 6.1 of the earlier order, which held that interest under sections 234A, 234B and 234C is to be recomputed after considering tax deductible at source on the income assessed and directed restoration to the AO for recomputation with an opportunity to the assessee. In the present appeal the Revenue did not oppose the assessee's plea. Respectfully following the Coordinate Bench decision in the assessee's own case, the Tribunal restored the issue to the file of the AO and directed recomputation of the interest chargeable under sections 234A, 234B and 234C after taking into account the amount of tax deductible at source on the total income, with a fair and reasonable opportunity to the assessee to be heard. [Paras 5, 6]Issue restored to the file of the Assessing Officer with a direction to recompute the interest under sections 234A, 234B and 234C after considering tax deductible at source and after affording the assessee a reasonable opportunity of being heard.Final Conclusion: Appeal allowed for statistical purposes; matter remitted to the Assessing Officer to recompute interest under sections 234A, 234B and 234C after accounting for tax deductible at source, following the Coordinate Bench precedent, with opportunity to the assessee. Issues:Charging of interest under sections 234A, 234B, and 234C without considering tax deductible at source.Analysis:The appeal was filed against the order passed by the ld.CIT(A) for the assessment years 2009-10, where the issue raised was the charging of interest under sections 234A, 234B, and 234C without taking into account the tax deductible at source. The ld. AR contended that a similar issue had been decided in favor of the assessee by the Tribunal in a previous case. The ld.DR did not object to this contention.Upon perusal of the record and relevant case law, the Tribunal found that the issue had been previously decided in favor of the assessee by a Co-ordinate Bench. The Tribunal referred to the specific paras from the previous judgment where it was held that interest should be charged after considering the amount of tax deductible at source on the income assessed. The Tribunal, following the previous decision, directed the AO to recompute the interest under sections 234A, 234B, and 234C by taking into account the tax deductible on the total income of the assessee. The AO was instructed to provide a fair and reasonable opportunity for the assessee to be heard in this matter.In conclusion, the Tribunal allowed the appeal of the assessee for statistical purposes and pronounced the order in open court on 20th March 2017. The decision was based on the precedent set by a Co-ordinate Bench in the assessee's own case, emphasizing the importance of considering the tax deductible at source while calculating interest under sections 234A, 234B, and 234C.