2021 (4) TMI 337 - AT - Income Tax

Tribunal rules in favor of assessee on interest levied under sections 234B and 234C

Asstt. Commissioner of Income Tax, Central Circle 2 (1), Pune Versus M/s. ISMT Limited

Asstt. Commissioner of Income Tax, Central Circle 2 (1), Pune Versus M/s. ISMT Limited - TMI Issues Involved:1. Justification of deleting interest levied u/s. 234B and 234C on revised book profit.2. Imposition of interest u/s. 234B and 234C in assessment order passed u/s. 153A r.w.s. 143(3) of the Act.Analysis:1. The first issue revolved around the deletion of interest levied u/s. 234B and 234C on the revised book profit. The assessee, a company engaged in manufacturing, initially filed a return of income declaring total income as Nil, which was later revised due to a retrospective amendment. The Assessing Officer (AO) made an addition on account of club expenses and levied interest u/s. 234B and 234C on the revised book profit. The CIT(A) deleted the addition for club expenses but confirmed the interest levied. The Tribunal, however, granted relief to the assessee regarding the interest levied, leading the Department to appeal to the High Court, which was pending. The subsequent search action resulted in additional income disclosure, with the AO again levying interest u/s. 234B and 234C. The CIT(A) held that since there was no order contrary to the Tribunal's findings, the AO was not justified in imposing the interest and deleted it.2. The second issue dealt with the imposition of interest u/s. 234B and 234C in the assessment order passed u/s. 153A r.w.s. 143(3) of the Act. The assessee challenged this assessment order, arguing that the Tribunal had previously granted relief regarding the interest levied, and the AO was not justified in imposing it again. The CIT(A) concurred, stating that since there was no order reversing or modifying the Tribunal's decision, the interest levied was unjustified. The Department of Revenue appealed to the High Court, but as no order was presented to show a reversal of the Tribunal's decision, the interest was ultimately deleted by the CIT(A) and upheld by the Tribunal.In conclusion, both issues centered on the justification of levying interest u/s. 234B and 234C on the assessee's revised book profit and subsequent additional income disclosure. The Tribunal consistently ruled in favor of the assessee, with the CIT(A) deleting the interest based on the absence of contrary orders. The High Court appeals by the Revenue did not result in any modifications to the Tribunal's decisions, leading to the dismissal of the Revenue's appeal in both instances.