Tribunal corrects interest calculation error, upholds natural justice principles.

The Tribunal addressed the issues of violation of natural justice principles and the incorrect levy of interest u/s. 234B. The appellant's appeal was allowed for statistical purposes, directing a reevaluation of the interest calculation by the AO for a fair and accurate determination.

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Issues involved:
1. Violation of principles of natural justice in passing an ex parte order without considering the assessee's application for adjournment due to medical reasons.
2. Upholding the levy of interest u/s. 234B without considering the timing of tax demand payment and passing of rectification order.

Issue 1: Violation of principles of natural justice
The appeal was filed against the order passed by the National Faceless Appeal Centre under sections 271(1)(c) and 250 of the Act. The appellant contended that the order was passed ex parte without considering the application for adjournment filed due to the assessee testing positive for Covid-19. The appellant argued that the notice fixing the hearing date was duly replied seeking adjournment on medical grounds, making the ex parte order legally flawed. The appellant raised concerns regarding the violation of principles of natural justice by the CIT(A) in not considering the medical grounds for adjournment and passing an ex parte order.

Issue 2: Levy of interest u/s. 234B
The appellant challenged the upholding of the order levying interest u/s. 234B without taking into account the timing of tax demand payment and the passing of the rectification order. The appellant argued that the interest calculated was excessive as it was charged from the first day of the assessment year until the passing of the rectification order, despite payments made in the intervening period. The appellant presented a chart and judicial decisions to support the argument that the levy of interest u/s. 234B was legally incorrect. The Tribunal noted the excessive interest calculation and directed the matter to be reworked by the AO, emphasizing the need to verify, examine, and pass an order on merits. The Tribunal allowed the appeal for statistical purposes, indicating that the matter needed further review and adjustment.

In conclusion, the judgment addressed the issues of violation of natural justice principles and the incorrect levy of interest u/s. 234B. The Tribunal acknowledged the appellant's arguments, directing a reevaluation of the interest calculation by the AO for a fair and accurate determination.

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