High Court partially allows appeal on assessment order, disallows interest, deems partnership deed non-filing curable

The appeal was partly allowed as the appellant's challenge regarding the validity of the assessment order and reopening under sections 143(2) and 148 was not pressed. Disallowance of interest and remuneration due to non-compliance with Income Tax Act sections was confirmed, but the non-filing of the partnership deed was considered curable. The High Court ruled in favor of the appellant, deleting the disallowance and rejecting the challenge against interest under section 234B based on precedents and the Calcutta High Court's judgment.

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Issues involved:
1. Validity of assessment order due to non-issuance of notice under section 143(2) within statutory time limit.
2. Challenge against reopening of assessment under section 148.
3. Disallowance of interest and remuneration paid to partners due to non-compliance with section 184 r.w.s. 185 of the Income Tax Act.
4. Interpretation of the requirement to file partnership deed along with the return of income.
5. Applicability of judgments by the Hon'ble Calcutta High Court and other High Courts in similar cases.
6. Challenge against charging of interest under section 234B.

Detailed Analysis:
1. The appellant challenged the assessment order's validity due to the non-issuance of a notice under section 143(2) within the statutory time limit. However, the appellant did not press this ground of appeal, leading to its rejection.
2. Grounds 2 and 3 challenged the reopening of the assessment under section 148, but these grounds were also rejected as the appellant did not press them.
3. Grounds 4 and 5 were interconnected and related to the disallowance of interest and remuneration paid to partners due to non-compliance with section 184 r.w.s. 185 of the Income Tax Act. The First Appellate Authority confirmed the disallowance based on non-filing of the partnership deed, leading to mandatory assessment and disallowances under section 185.
4. The appellant argued that filing the partnership deed during the assessment proceedings should be considered sufficient compliance, citing a judgment by the Hon'ble Calcutta High Court. The High Court's decision emphasized that filing the revised partnership deed during assessment proceedings is directory in nature and can be done before completion of assessment.
5. The judgment referred to various High Court decisions supporting the view that non-filing of the partnership deed is a curable defect and does not automatically disentitle the assessee from claiming deductions related to partnership changes.
6. The High Court upheld the appellant's argument, citing precedents and holding that the view taken by the Tribunal was correct. The charging of interest under section 234B was deemed consequential and was rejected as a ground of appeal.

In conclusion, the appeal was partly allowed based on the judgment of the Hon'ble Calcutta High Court, which supported the appellant's position regarding the filing of the partnership deed during assessment proceedings. The disallowance made by the assessing officer was deleted, and the challenge against the charging of interest under section 234B was rejected.

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