In the ITAT Mumbai
Bench ‘G’
Megji Mathradas
v.
Assistant Commissioner of Income-tax 17(3),
Mumbai
Smt. P. Madhavi Devi,
Judicial Member
and K.K. Boliya,
Accountant Member
IT Appeal
No. 5425 (Mum.) of 2004
[Assessment year
1998-99]
August 21, 2007
Section 234B, read with sections 147 and 154,
of the Income-tax Act, 1961 - Interest, chargeable as - Assessment year 1998-99
- Whether as per Explanation 2 to sub-section (1) of section 234B, assessment
done for first time under section 147 is regular assessment for purposes of
section 234B and not re-assessment/recomputation
under section 147 - Held, yes - For assessment year 1998-99, assessee’s return was initially processed under section
143(1)(a) and regular assessment was completed under section 147 read with
section 143(3) on 31-12-2002 - Assessing Officer initially charged interest
under section 234B from 1-4-1998 to 31-12-2002 - Subsequently, Assessing
Officer rectified said order under section 154 and charged interest from date
of intimation under section 143(1)(a) (i.e. 24-9-2000) to date of regular
assessment (i.e. 31-12-2000) - Thereafter, Assessing Officer issued notice for
rectifying assessment order for second time by holding that interest under
section 234B(3) was wrongly charged from 24-9-2000 and instead it was to be
charged from 1-4-1998 as per section 234B(1) - Whether assessee’s
contention that since intimation under section 143(1)(a) is an assessment
order, assessment made under section 147 in his case was a reassessment and,
therefore, provisions of section 234B(3) were applicable, could not be accepted
- Held, yes
Facts
For the assessment year 1998-99, the assessee’s return was initially processed under section
143(1)(a) and regular assessment was completed
under section 147 read with section 143(3) on 31-12-2002. The Assessing Officer
initially charged interest under section 234B from 1-4-1998 to 31-12-2002 when
regular assessment was completed. Subsequently, the Assessing Officer rectified
said order under section 154 and charged interest from date of intimation under
section 143(1)(a) (i.e. 24-9-2000) to the date of regular
assessment (i.e. 31-12-2000). Thereafter, the Assessing Officer issued
notice for rectifying the said assessment order for second time by holding that
the interest under section 234B (3) was wrongly charged from 24-9-2000 and
instead it was to be charged from 1-4-1998 as per section 234B(1).
He, therefore, rectified the said order for second time. On appeal, the
Commissioner (Appeals) confirmed the order of the Assessing Officer.
On appeal, the assessee
submitted that the Assessing Officer had duly applied his mind while passing
the rectification order under section 154 in the first instance and had
correctly charged interest under section 234B from 24-9-2000 and, therefore, it
was not open for the Assessing Officer to rectify the same under section 154,
as it would amount to change of opinion and not a mistake apparent from record.
He also submitted that since intimation under section 143(1)(a)
is an assessment order, assessment made under section 147 in his case was a
reassessment and, therefore, provisions of section 234B(3) were applicable.
Held
To assume jurisdiction under section 154, the
basic requirement is that there must be a mistake apparent from record. In
taxation law, mistake is not merely an arithmetical or clerical error, but it
may be a mistake either of law or of facts. The Supreme Court in Satyanarayan Laxminarayan Hegde v. Mallikarjun Bhavanappa Thirumale AIR 1960
SC 137, has held that a mistake apparent from record
must be an obvious and apparent mistake and not something which can be
established by a long drawn process by reasoning on points on which there may
be conceivably two opinions. It is also a settled principle of law that if a
statutory provision is capable of two interpretations, taking one such
interpretation, cannot give rise to an error if one is of the view that the
other interpretation was more correct in the context. In the instant case, the assessee sought application of sub-section (3) of section
234B, whereas the Assessing Officer had applied sub-section (1) of section
234B. [
Sub-section (3) of section 234B is applicable
to a case where an order of reassessment/recomputation
is made under section 147 or section 153A, whereas the provisions of
sub-section (1) of section 234B are applicable to cases where the assessee is liable to pay advance tax and has failed to pay
such tax or has paid less than 90 per cent of the assessed tax. Explanation 2 to sub-section (1) of section
234B also provides that where an assessment for the first time is made under
section 147 or under section 153A, the assessment so made shall be regarded as
the regular assessment for the purpose of this section. In the instant case,
the return was initially processed under section 143(1)(a)
and subsequently assessment was completed under section 147 read with section
143(3). As held by the
The appeal was dismissed accordingly.
Case Review
CIT v. Rajkumar Dipchand Phade [2001] 249 ITR
520/116 Taxman 783 (Bom.) (para
8) followed.
Cases referred to
CIT v. Rajkumar Dipchand Phade [2001] 249 ITR
520/116 Taxman 783 (Bom.) (para
5), CIT v. Smt. Premlata
Jalani [2003] 264 ITR 744 (Raj.)
(para 5), Mahanagar Telephone Nigam
Ltd. v. Chairman, CBDT [2000] 246 ITR 173/112 Taxman 337 (
R.C. Jain for the Appellant. S.L. Men for the
Respondent.
nn