The ITAT Kolkata bench, in M/s Nidhi Packers Pvt. Ltd v. ITO held that interest under Section 234A of the Income Tax Act cannot be charged from the assessee when he had filed return within the extended period.
In the instant case, assessee is a company engaged in the business of manufacturing and cultivation of tea. Income for the year under consideration was filed by it on 11.10.2010 after claiming deduction under Section 80IE of the Income Tax Act, 1961. Subsequently, another return was filed by the assessee with more deduction under Section 80IE. In the assessment completed under Section 143(3) of the act, the total income was determined by the assessee as per the return originally filed. In the tax computation form, the A.O determined the total income of the assessee without allowing for deductions as claimed by him. The assessee appealed to the Ld. CIT(A) against the order of A.O in not allowing the deduction as claimed, not accepting the revised return and A.O’s action in charging interest as per Section 234A, 234B and 234C was also challenged. Ld. CIT(A) directing the A.O. to raise a speaking order in relation to Section 80IE, directed him to recomputed the interest. Aggrieved by the order of Ld. CIT(A) assessee appealed to the tribunal.
The ITAT held that Ld. CIT(A) was not justified in setting aside the issue related to assessee’s claim for deduction under section 80IE as he did not have power to set aside the issue to A.O. Setting aside A.O ‘s order with regard to Section 80IE, directed him to decide the issue raised by assessee. With regard to the next issue involved which is charging of interest (under Section 234A, 234B & 234C), ITAT accepted the learned counsel Shri S Jhajharia’s contentions that interest under Section 234A was not chargeable as the return was filed by assessee within the extended period for filing the returns which was 15 days. ITAT directed Ld. CIT(A) to verify the claim with regard to Section 234A and decide it accordingly.
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