September 2010
Rectification : S. 154 of Income-tax Act, 1961 : Interest u/s.234B not levied in assessment order relying on decision of Supreme Court : Subsequent retrospective amendment : Order not erroneous : Rectification not valid.
By K. B. Bhujle | Advocate
New Page 2
Reported :
51 Rectification : S. 154 of
Income-tax Act, 1961 : Interest u/s.234B not levied in assessment order relying
on decision of Supreme Court : Subsequent retrospective amendment : Order not
erroneous : Rectification not valid.
[Shriram Chits
(Bangalore) Ltd. v. JCIT, 325 ITR 219 (Karn.)]
For the A.Y. 1998-99, the
assessment was completed u/s.143(3) of the Act. Following the judgment of the
Supreme Court in CIT v. Ranchi Club Ltd.; 247 ITR 209 (SC) interest was
not levied u/s. 234B of the Act. Subsequently, in view of the subsequent
retrospective amendment to S. 234B by the Finance Act, 2001 the Assessing
Officer rectified the assessment order u/s.154 of the Act and levied interest
u/s.234B of the Act. The Tribunal upheld the order of rectification.
The Karnataka High Court
allowed the appeal filed by the assessee and held as under :
“(i) In view of the
judgment of the Supreme Court in CIT v. Max India Ltd.; 295 ITR 282,
it was not possible for the Assessing Officer to reopen the case since the
Assessing Officer had rightly passed the order relying upon the judgment of
CIT v. Ranchi Club Ltd.; 247 ITR 209 (SC) while passing the order of
assessment.
(ii) Just because there
was a subsequent amendment, the Assessing Officer could not reopen the file.
The order of rectification was not valid.”
