AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2023 (5) TMI 160
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....A.O. in the order u/s 154. 2) The learned CIT(A) failed to appreciate that - a. As the order of asst, u/s 147 itself was null and void, the order u/s 154 rectifying the mistake in that asst, order is bad in law. b. The issue involved of enhancing the interest u/s 234A did not constitute mistake apparent from record and therefore, the order u/s 154 was bad in law and needs to be cancelled. 3) The learned CIT(A) further failed to appreciate that - a. The original return filed without payment of tax could not be treated as a defective return and accordingly, the asst, had become time barred and such time barred asst, could not be reopened u/s.147. b. Interest u/s 234A was not correctly levied in the order u/s 154. c. Without prejudice, the interest u/s 234A could be levied only up to the date of filing the original return i.e. 08.02.2013 and not till 17.10.2018 i.e. the date of filing the return in response to notice u/s. 148. 4) The appellant requests for cancellation of the order u/s 154 passed by the A.O. as the rectification order of an invalid reasst. is bad in law, the issue involved did not constitute mista....
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....t this tribunal's recent coordinate bench's order in assessee's co-owner Mrs. Sawari Sameer Shinde, Pune vs. ITO involving ITA.No.657/ PUN./2022 decided on 20.03.2023 has already rejected the Revenue's very contentions as under : "6. Mr. Pathak vehemently argued during the course of hearing that both the lower authorities have erred in law and on facts in initiating sec.154 rectification proceedings on such a debatable issue of validity of the assessee's former return dated 08.02.2013 which is not sustainable in law as per T.S. Balram, ITO vs. Volkart Bros. [1971] 82 ITR 50 (SC). The assessee's former return dated 08.02.2013 was very much a valid one u/s.139(9A) read with Explanation(c)(i) thereto as per this tribunal's coordinate bench's order in Meters and Instruments Pvt. Ltd., vs. Inspecting Assistant Commissioner [1991] 39 ITD 269 (Del.) and, therefore, both the lower authorities have wrongly held the same as a defective and invalid return. Learned counsel lastly posed challenge to validity of sec.148 proceedings itself that in case the assessee's former return is held to be a valid one which declared taxable income from capital gains of Rs.3,33,54,241/-, there would ....
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....d. Counsel for the assessee pointed out that because of financial stringency the assessee could not make the payment of advance tax before the expiry of the relevant financial year. It was further submitted that the same tight financial position continued even when the return had to be filed and that the assessee's bank account was attached and the payments were recovered by the department by and by. Reliance was also placed on the Tribunal's decision in the case of Hazarimal Lalooram (supra) in which it was held that where the books of account were not audited and the assessee could not attach copies of the audited balance sheet and Profit and Loss A/c with the return, it could be said that he was prevented by sufficient cause for late submission of return. 8. We have given a very careful consideration to the arguments of the Ld. Counsel for the assessee, but do not find any force in the same. As rightly pointed out by the Ld. D.R., clause (c) of Explanation to section 139(9) uses the expression "tax, if any" claimed to have been at source or in advance or on self-assessment. In other words, if the assessee claims to have paid any tax either at source or by way of advance....
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....ly dispute that no such action had never been taken against the assessee. He took us to the Assessing Officer's re-assessment discussion at page-1 dated 30.11.2018 and that the latter had indeed issued notice for payment of self-assessment tax. We find no merit in the instant arguments since the same was nowhere an intimation u/s.139(9) of the Act. That being the case, we are of the opinion that the assessee's above former return dated 08.02.2013 could not have been treated as a defective one so as to trigger applicability of sec.234A interest herein levied in sec.154 rectification proceedings in issue. Both the learned lower authorities action to this effect stands reversed therefore. The assessee's arguments stands accepted in very terms. Ordered accordingly." 7. Mr. Jasnani sought to draw a distinction in the instant case that the Assessing Officer had already treated the assessee's return dated 08.02.2013 as an invalid one as against the facts of the earlier case. We note that the clinching question i.e., the applicability of sec.139(9) Explanation (c) (i) still gets attracted in the instant case since the taxpayer before us namely Shri Siddhant Machindra Mhaske had nowhere ....
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.... and, therefore, there was no requirement for attachment of proof of such taxes. And thus, the original return filed cannot be treated as a defective return. I have carefully perused the submissions made by the Appellant. At the outset, the issue raised by the Appellant that assessment order passed u/s 148 of the Act is bad in law, is being rejected on the ground that present appeal has been filed against order passed u/s 154 of the Act and further, grounds of appeal raised by the Appellant does not raise the issue of illegality of the order passed u/s 148 of the Act. Before addressing the issue of the correct amount of interest leviable u/s 234A, it would be necessary to peruse the order passed u/s 154 of the Act. Relevant part of the said order is reproduced as under; "In this case, assessment order under section 143(3) of the Income Tax Act, 1961 has been passed on 19/11/2018 assessing total income at Rs.1,84,19,640/- for assessment year 2011-12. Accordingly, tax was determined at Rs.37,61,485/- and interest under section 234A, 234B & 234C was calculated at Rs.2,25,690/-, Rs.34,29,456 & Rs. 1,39,174/- respectively. As regards interest....