Ekataa Commercial Centre Private Limited Vs DCIT (ITAT Mumbai)
Assessee’s income was originally accepted u/s 143(1) with demand raised. Subsequently, pursuant to rectification u/s 154 (on account of settlement under Vivad Se Vishwas Scheme), assessed income was reduced. However, AO levied interest u/s 220(2) without proper computation details.
ITAT held that:
- Once assessed income is reduced, interest u/s 220(2) must be correspondingly reduced
- AO failed to provide break-up / basis of interest computation – requires reconsideration
- Hence, matter remanded to AO for recomputation based on revised income
However, ITAT rejected assessee’s contention that:
- Interest should run only from date of rectification order
- Held that original demand u/s 143(1) still subsists (only reduced), hence interest runs from original demand date
Accordingly:
- Issue restored to AO for recomputation
- Relief allowed only to extent of revised income impact
FULL TEXT OF THE ORDER OF ITAT MUMBAI
The assessee has filed the present appeal against the impugned order dated 12.06.2025, passed under section 250 of the Income Tax Act, 1961 (“the Act”) by the learned Commissioner of Income Tax (Appeal) – 53, Mumbai [“learned CIT(A)”], which in turn arose from the order passed under section 154 of the Act, for the assessment year 2021-22.
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