AI Drafter 
TaxTMI 
TaxTMI 
2021 (3) TMI 769
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....reas it should be charged as per Sec. 234A(3) which is bad in law." 2. The hearing of the appeal was concluded through video conference in view of the prevailing situation of Covid-19 Pandemic. 3. The only ground raised by the assessee relates to challenging the order of the ld. CIT(A) in confirming the addition of Rs. 9,41,283/- of interest U/s 234A(1) of the Income Tax Act, 1961 (in short, the Act). The ld. AR appearing on behalf of the assessee has reiterated the same arguments as were raised before the ld. CIT(A) and also relied on the written submissions filed before the Bench which is reproduced below: "That the assessee did not file the return of income u/s 139(1) but filed her return of income for the first time in co....
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....n debatable point of law is not the mistake apparent from records" and same has been followed by the number of High Courts and ITAT benches of India. Now for the sake of your convenience we are reproducing the sub section (1) and (3). 234A. (1) Where the return of income for any assessment year under sub-section (1) or sub-section (4) of section 139, or in response to a notice under sub-section (1) of section 142, is furnished after the due date, or is not furnished, the assessee shall be liable to pay simple interest at the rate of one per cent for every month or part of a month comprised in the period commencing on the date immediately following the due date, and,- (a) where the return is furnished after the due....
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....r is not furnished, the assessee shall be liable to pay simple interest at the rate of one per cent for every month or part of a month comprised in the period commencing on the day immediately following the expiry of the time allowed as aforesaid, and,- (a) where the return is furnished after the expiry of the time aforesaid, ending on the date of furnishing the return; or (b) where no return has been furnished, ending on the date of completion of the reassessment or recomputation under section 147 or reassessment under section 153A, on the amount by which the tax on the total income determined on the basis of such reassessment or recomputation exceeds the tax on the total income determined under sub-section (1) of section....
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....ent is made for the first time under section 147, the assessment so made shall be regarded as a regular assessment for the purpose of this section." 9. With a view to simplify the procedure, which had led to litigation and consequent delay in realization of dues, the Amending Act, 1987, has substituted the aforesaid provisions by a simple scheme of payment of mandatory interest for defaults mentioned therein. The aforesaid provisions provides that where a return of income is furnished after the due date or is not furnished, the assessee shall pay simple interest at the rate of one and one-fourth per cent for every month, or part of a month comprises in the period of default on the amount of tax on total income determined on regular....
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.... pay interest U/s 234A(1) of the Act of Rs. 9,41,283/- instead of Rs. 2,66,950/- charged as per Section 234A(1) of the Act because in this case, scrutiny assessment U/s 147/143(3) of the Act was completed at a total income of Rs. 48,71,356/-. However, later on, on verification of the record, it was found by the A.O. that interest U/s 234A(1) was charged at Rs. 2,66,950/- in ITNS 150 dated 31/03/2016 whereas it was to be charged at Rs. 9,41,283/- and thus considered the same to be mistake apparent from the record. The A.O. also issued notice to the assessee and provided opportunity of hearing but the assessee did not appear before the A.O.. Consequently, the order of rectification was passed by the A.O. thereby charging interest U/s 234A(....
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....whereas where interest is to be charged from the due date of filing of return till the date of filing of return in response to notice U/s 147 of the Act. It has categorically been mentioned in sub-section (3) of Section 234A of the Act that provisions of said sub-section can only be invoked in the case where the completion of assessment U/s 143(3)/144 or 147 of the Act takes place, but admittedly in the present case, no return was filed. There was no occasion for completion of the assessment under the above provisions, therefore, the assesse cannot take benefit of sub-section (3) of Section 234A of the Act. 7. We are of the considered view that provisions of rectification can only be invoked for correcting the mistake which are apparent ....