Diamond Piston and Rings Limited Vs ACIT (ITAT Delhi)
The appeal before the Income Tax Appellate Tribunal (ITAT), Delhi, arose from the order of the Commissioner of Income-tax (Appeals) (NFAC) for Assessment Year 2012-13 concerning the levy of interest under Sections 234A and 234B of the Income-tax Act. The reassessment was completed under Sections 147 read with 143(3), accepting the income declared by the assessee in response to a notice under Section 148, while directing levy of interest under Sections 234A, 234B, 234C and 234D. The assessee challenged only the levy of interest under Sections 234A and 234B before the Commissioner (Appeals).
During the first appellate proceedings, the Commissioner (Appeals) issued five notices. The assessee sought adjournments on three occasions and did not respond to two notices. The appeal was decided ex parte. The Commissioner (Appeals) dismissed the appeal on the grounds that no submissions had been filed and that the grievance regarding interest under Sections 234A and 234B should be addressed through a rectification application under Section 154 rather than by filing an appeal.
Before the Tribunal, the Revenue relied on the orders of the lower authorities. The Tribunal observed that although the levy of interest under Sections 234A and 234B is mandatory and automatic, the issue of its chargeability and computation arises from the assessment order and is appealable before the Commissioner (Appeals). It held that the Commissioner (Appeals) was empowered to examine both the levy and the computational aspects of such interest and erred in holding that the remedy lay only under Section 154.
