Raveendra Nalluri Vs ACIT (ITAT Hyderabad)
The Tribunal dealt with a limited issue relating to incorrect computation of interest under sections 234A, 234B, and 234C. The assessee contended that the Assessing Officer had wrongly computed interest without reducing the foreign tax relief available under sections 90/90A, resulting in excess interest demand.
The ITAT accepted this contention, noting that the law clearly mandates that tax relief under sections 90/90A must be reduced from the assessed tax before calculating interest liability under these sections. Since the AO failed to grant this reduction, the computation of interest was held to be incorrect.
Accordingly, the Tribunal directed the AO to recompute interest after allowing foreign tax credit relief, thereby granting relief to the assessee.
Interest u/s 234A/B/C must be computed on net tax liability after giving effect to foreign tax credit-failure makes the computation defective.
FULL TEXT OF THE ORDER OF ITAT HYDERABAD
The present appeal filed by the assessee is directed against the order passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, dated 30/12/2024, which in turn arises from the order passed by the Assessing Officer (for short, “AO”) under section 143(3) r.w.s 143(3A) & 143(3B) of the Income Tax Act, 1961 (for short, “the Act”), dated 26/02/2021 for the Assessment Year (AY) 2018-19. The assessee has assailed the impugned order of the CIT(A) on the following grounds of appeal:
“1. The order of the learned Commissioner of Income-tax (Appeals) is erroneous both on facts and in law, without giving any proper opportunity to the appellant.
2. The learned Commissioner of Income-tax (Appeals) erred in passing an order Ex-Parte without giving any proper opportunity to the appellant. The order of the CIT(Appeals) is ex-parte, illegal and arbitrary, and violative of the principles of natural justice.
3. The order of the learned Commissioner of Income-tax (Appeals) is arbitrary, illegal, and contrary to the provisions of the law, in confirming the order of the assessing officer in treating an amount of Rs 12,64,672/- as income of the appellant without giving any further opportunity.
4. The very approach of the learned Commissioner of Income-tax (Appeals) /NFEAC in passing an order u/s250 ex-party without giving any proper opportunity to confirm the action of the Assessing officer in determining the total income at 2,60,76,192/- against return of income Rs 2,48,11,520 without giving any proper opportunity, is illegal arbitrary, without assigning any valid reasons, and is perverse, highhanded is contrary to the provisions law, therefore the order passed by the Learned Commissioner of Income Tax(appeals)NFAC is illegal ex-facie and violative of principals of natural justice.
5. The CIT (Appeals) erred in upholding the levy of interest under sections 234A, 234B, and 234C of the Act.
6. Any other ground/grounds may be urged at the time of hearing.”
2. Succinctly stated, the assessee had e-filed his return of income for AY 2018-19, declaring an income of Rs.2,48,11,520/-. Thereafter, the case of the assessee was selected for scrutiny assessment under section 143(2) of the Act.
