The Delhi Bench of Income Tax Appellate Tribunal(ITAT) allowed the appeal of the assessee, directing the deletion of incorrect interest charges under section 234A of Income Tax Act,1961 due to an erroneous due date for filing the income tax return.
Abha Bansal,appellant-assessee,filed her return of income on 30.09.2013, declaring Rs. 10,77,82,8387/-. The case was selected for scrutiny, and notices under sections 143(2) and 142(1) were issued. After the assessee’s Authorized Representative(AR) submitted the requested information, the assessment was completed, accepting the returned income.
Comprehensive Guide of Law and Procedure for Filing of Income Tax Appeals, Click Here
The assessee later filed a rectification application under section 154, pointing out that the return processed by Centralized Processing Center (CPC) on 28.04.2014 incorrectly set the due date as 05.08.2013 and charged interest under sections 234A, 234B, and 234C. As a partner in M/s M3M India Holdings, the assessee was required to file the return by 31.12.2013, not the date mentioned by CPC.
The case was scrutinized, and rectification rights were transferred to the Assessing Officer(AO). Despite this, no changes were made during the assessment under section 143(3). The rectification request was ultimately rejected, and the appellant was notified on 13.02.2020.
Comprehensive Guide of Law and Procedure for Filing of Income Tax Appeals, Click Here
The assessee appealed to the Commissioner of Income Tax(Appeals)[CIT(A)] against the rejection of the rectification application, as no order was passed under section 154. Despite further follow-up with the department, the appeal was filed. After reviewing the submissions, the CIT(A) dismissed the appeal.
Aggrieved by the CIT(A) decision the assessee appealed before the tribunal.
During the hearing, the assessee’s counsel cited the case of Pankaj Bansal vs. ACIT (ITA No. 858/Del/2023, dated 10.04.2024), where the tribunal had ruled in favor of the assessee on similar issues. The Revenue, however, supported the findings of the lower authorities.
Comprehensive Guide of Law and Procedure for Filing of Income Tax Appeals, Click Here
The two member bench comprising Sudhir Pareek(Judicial Member) and S.Rifaur Rahman(Accountant Member) after reviewing the submissions and evidence,noted that the facts in the present case aligned with those in Pankaj Bansal. In that decision, the tribunal concluded that interest under section 234A was incorrectly charged because the correct due date for filing the return for a partner in a tax-audited firm was 31.10.2013, not 05.08.2013, as calculated by the CPC.
Based on the precedent set in Pankaj Bansal, the tribunal ordered the deletion of interest charged under section 234A and accepted the assessee’s grounds.
Ultimately, the appeal filed by the assessee was allowed.
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