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Laxmi Publication Pvt. Ltd., 113, Golden House, Daryaganj, New Delhi Vs. ACIT, Circle 4(1), New Delhi
July, 15th 2014
            IN THE INCOME TAX APPELLATE TRIBUNAL
                  DELHI BENCH `D ' NEW DELHI)

         BEFORE Shri U. B. S. BEDI, JUDICIAL MEMBER and
           Shri S V MEHROTRA, ACCOUNTANT MEMBER
                         I.T.A. No. 2182/Del/2013
                        (Assessment year 2002-03)
Laxmi Publication Pvt. Ltd.,               Vs. ACIT, Circle 4(1),
113, Golden House, Daryaganj,                    New Delhi
New Delhi
PAN : AAACL0375Q
      (Appellant)                                (Respondent)

      Assessee by :       Sh. V.D. Aggarwal, Advocate on first conclusion
                          and None on second conclusion when fixed for
                          clarification.
      Department by:      Shri Vivek Kumar, Sr. DR

                                   ORDER

PER U.B.S. BEDI, JUDICIAL MEMBER:

      This appeal of the assessee is directed against the order passed by Ld.
CIT(A) VIII, New Delhi dated 19.02.2013 relevant to assessment year 2002-
03 wherein, following two effective grounds have been raised.
      "1. Ld. CIT(A) is not justified in law and facts and circumstances of the
      case in dismissing the appeal on the basis of the judgement of the ITAT and
      ignoring the judgement of higher court in case of CIT Vs Shri b.
      Lakshmikanthan and CIT Vs Sego Restaurant & Amp wherein Hon'ble
      court held specifically that whether assessment is made u/s 143(1) or
      143(3) for the purpose of charging interest u/s 234B(3), no difference can
      be made on the baiss of original assessment completed u/s 143(1) or
      143(3).
      2.     Ld. CIT(A) is erred in law and facts and circumstances of the case
      particularly in the circumstances hewn there is difference of opinion in
      interpreting the section the view which is favorable to the assessee should
      be adopted. In this case there is only one case of Bombay ITAT while other
      3 cases on which assessee has relied in which one was of the ITAT and two
      of the High Court was in favour of the assessee, hence dismissal of the
      appeal is bad in law."
                                      2                  I.T.A. No.2182/Del/2013



2.    In both the above grounds, the only issue involved is regarding the
contention of the assessee that the A.O. had wrongly charged interest u/s
234B(1) whereas, it had to be charged u/s 234B(3) of the I. T. Act, 1961.
The brief facts of the case are that the original return of income was filed on
28.10.2002 declaring income of Rs.11,73,630/-. A survey u/s 133A was
conducted on the premises of the assessee on 26.03.2007 and 27.03.2007.
The notice u/s 148 was issued to the assessee and in response thereto, the
return of income was filed on 30.03.2007.           The assessee had made
application u/s245C before the Hon'ble Settlement Commission and
subsequently the assessment was framed on 13.6.2011 u/s 143(3) read with
Sections 147 and 245D(iv) in pursuance to the order of Settlement
Commission.     The A.O. had charged interest u/s 234B(1) whereas, the
assessee contended in his appeal before the first appellate authority that
interest should have been charged under the provisions of Section 234B(3)
for the period commencing on the day falling at the date of determination of
total income u/s 143(1). During the course of appellate proceedings, the
assessee has further submitted that since the order had been passed u/s 147,
therefore, the interest should have been charged under the provisions of
Section 234B(3) and not u/s 234B(1). In support of such contention, the
assessee had placed reliance on the decisions of Hon'ble Kerala High Court
in the case of CIT Vs B Lakshmikanthan, 198 Taxman 485 dated 20.01.2011
and CIT Vs M/s. Sago Restaurant & Others I.T.A. No. 1022 of 2009 dated
14.12.2001.
3. Ld. CIT(A) considered the arguments of the assessee but did not accept the plea of the assessee and relied upon the order of ITAT Mumbai Bench in the case of Barbar Ship Management India (P) Ltd. Vs ITO, 2009- 3 I.T.A. No.2182/Del/2013 TIOL-824-ITAT-Del and by reproducing the relevant portion from the said order in his order, has concluded to dismiss the appeal as under: "Perusal of the above order of the Hon'ble jurisdictional ITAT shows that it has clearly been held that intimation u/s 143(1)(a) is not an assessment and if the assessment for the first time is completed u/s 147 then the case will fall under sub-section (1) of section 234B. In the instant case also, it is observed that assessment for the first time was completed under the provisions of section 147 therefore, the case will fall under the provisions of sub-section (1) of section 234B. The case law relied upon by the appellant are based on different facts. In view of the findings above and in view of the decision of the Hon'ble Delhi ITAT discussed above these grounds of appeal are dismissed." 4. Aggrieved, the assessee has come in further appeal and while reiterating the submissions as made before the lower authorities, relied upon the decisions in the case of Shri B Lakshmikanthan and Sego Restaurant & Amp (supra) and by placing copies of these decisions, it was pleaded for allowing the appeal of the assessee. 5. Ld. D.R. strongly relied upon the order of Ld. CIT(A) and pleaded for its confirmation. Reliance was placed on the decision of Hon'ble Madras High Court in the case of Textile Dye-Chem Corpn. Vs ACIT as reported in (2013) 35 Taxmann.com 467 to plead for confirmation of the order of Ld. CIT(A). 6. None appeared on behalf of the assessee on second occasion when case was fixed for clarification. After hearing the Ld. DR and on perusing the material available on record, we are adjudicating the matter on merits. 7. We have heard the Ld. DR and perused the material on record and have gone through the orders of authorities below. We have also gone through the provisions as contained in Section 234B(1) and u/s. 234B(3) as well and the case law as cited by rival sides. There is no dispute about the facts that consequent upon the original return filed, the same was processed 4 I.T.A. No.2182/Del/2013 u/s 143(1) and intimation was received by the assessee. Subsequently, a survey u/s 133A was conduced on the premises of the assessee and notice u/s 148 was issued. Thereafter, the assessee filed return in response thereto and had also gone before the Settlement Commission, assessment u/s 143(3) read with sections 147 and 245D(iv) in pursuance to order of Settlement Commission, was completed on 13.06.2011. The A.O. has charged interest u/s 234B(1) whereas, the assessee in appeal contended before the first appellate authority that interest should have been charged u/s 234B(3) for the period commencing from the date falling on the day of determination of total income u/s 143(1). The assessee has also taken the plea before the first appellate authority that since, the order has been passed u/s 147, the interest should have been charged under the provisions of Section 234B(3) and not u/s 234B(1). The plea of the assessee was not accepted by Ld. CIT(A) despite relying upon two decisions of Hon'ble Kerala High Court, the assessee has filed further appeal before this bench. 7.1 Now, the question to be considered by us is, as to which of the sub- sections of section 234B is attracted for levy of interest. In this case, there was determination of total income under sub-section (1) of section 143 before the regular assessment got completed u/s 143(3), the A.O. found that the advance tax paid is less than 90% of the assessed tax so, he levied interest u/s 234B(1) of the Act. Whereas, the assessee's contention is that the provisions of Section 234B(3) was to be applied and not of section 234B(1). So, it would be apt to reproduce the relevant provision of Section 234B(1), Explanation 2 and 234B(3) which are as under: "[Interest for defaults in payment of advance tax. 5 I.T.A. No.2182/Del/2013 234B. (1) Subject to the other provisions of this section, where, in any financial year, an assessee who is liable to pay advance tax under section 208 has failed to pay such tax or, where the advance tax paid by such assessee under the provisions of section 210 is less than ninety per cent of the assessed tax, 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 from the 1st day of April next following such financial year [to the date of determination of total income under sub- section (1) of section 143 [and where a regular assessment is made, to the date of such regular assessment, on an amount]] equal to the assessed tax or, as the case may be, on the amount by which the advance tax paid as aforesaid falls short of the assessed tax. [Explanation 1 ** ** ** ** [Explanation 2**.--Where, in relation to an assessment year, an assessment is made for the first time under section 147 [or section 153A], the assessment so made shall be regarded as a regular assessment for the purposes of this section.] [Explanation 3** ** ** ** (2)** ** ** ** ** 6 I.T.A. No.2182/Del/2013 (3) Where, as a result of an order of reassessment or recomputation under section 147 [or section 153A], the amount on which interest was payable under sub-section (1) is increased, 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 following [the date of determination of total income under sub-section (1) of section 143 [and where a regular assessment is made as is referred to in sub- section (1) following the date of such regular assessment]] and ending on the date of the reassessment or recomputation under section 147 [or section 153A], on the amount by which the tax on the total income determined on the basis of the reassessment or recomputation exceeds the tax on the total income determined [under sub-section (1) of section 143 or] on the basis of the regular assessment aforesaid." 7.2 The contention of the revenue is that, if the return is accepted and demand is raised by processing the return u/s 143(1), the interest is to be charged u/s 234B(1) and the same is for the period commencing from first day of the financial year following the previsions year during which, advance tax was paid. According to Ld. D.R., pursuant to survey, notice u/s 148 was issued to the assessee, by virtue of operation of relevant provision, return filed pursuant to the notice under the said provisions will be treated as 7 I.T.A. No.2182/Del/2013 return filed u/s 139. So much so, the department is entitled to process the return u/s 143(1) and issue of the proceedings which has entitled the A.O. to levy interest in terms of section 234B(1) of the Act. It was further clarified by Ld. D.R. that intimation issued u/s 143(1) is not an assessment and so much so, section 234B(1) to apply even in a case where intimation issued u/s 143(1) pursuant to the return called for on notice u/s 148. Whereas, Ld. counsel for the assessee on the other hand, contended before lower authorities that irrespective of notice and proceedings completed pursuant to the return filed in response to notice u/s 148, such assessment is always reassessment or recomputation under relevant provisions. So, the provisions applicable for interest on short/non payment of advanced tax is served by section 234B(3) of the Act and not u/s 234B(1). 7.3 On careful consideration of arguments of the Ld. DR, in light of the relevant provisions of law and precedents as relied upon, we find that going by the Explanation 2 to Section 234B of the Income Tax Act, when the assessment was made for the first time u/s. 147 read with section 143(3) of the I.T. Act, the said assessment is a regular assessment attracting the provisions of sub-section (1) of Section 234B. Given fact that the assessment is a regular assessment, rightly the AO levied interest u/s. 234B(1) and as confirmed by the Ld. CIT(A). Therefore, going by clear 8 I.T.A. No.2182/Del/2013 wording of the relevant portion of section 234B as reproduced in para 7.1 of this order and admitted fact position for assessment is a regular assessment and not a reassessment, we confirm the order of the ld. CIT(A) and dismiss the appeal of the assessee being devoid of any merit. 8. As a result, the appeal of the assessee gets dismissed. 9. Order pronounced in the Open Court on 11th July, 2014. Sd/- Sd/- (S.V. MEHROTRA) (U.B.S.BEDI) Accountant Member Judicial Member Date: 11-7-2014. Sp./SRB Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A), New Delhi AR, ITAT, 5. CIT(ITAT), New Delhi NEW DELHI
 
 
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