Kerala State Financial Enterprises, Trichur V. ACIT, Trichur

CO 26/COCH/2009

• Counselvise Citation: [2011] 122 COUNSELVISE.COM (IT) 6737 (ITAT-COCHIN)
• Duration Of Justice: 2 year(s) 6 month(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 30-12-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 08-12-2011
• Assessment Year: 1995-1996
• Appeal Filed On: 29-06-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S R SENAPATI
• Assessee Lawyers: JOSE POTTOKKARAN
• Section: 244A; 234B; 154

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.R.S.GANESAN (JM) & SHRI SANJAY ARORA (AM) I.T.A.NO.193/COCH/2009 ASSESSMENT YEAR 1995-96 ACIT, CIR.1(1), TRICHUR VS THE KERALA STATE FINANCIAL ENTERPRISES LTD BHADRATHA, MUSEUM ROAD, TRICHUR (APPELLANT) (RESPONDENT) C.O. NO.26/COCH/2009 (ARISING OUT OF I.T.A.NO.193/COCH/2009) ASSESSMENT YEAR 1995-96 THE KERALA STATE FINANCIAL ENTERPRISES LTD, TRICHUR VS ASSIST.COMMISSIONER OF INCOME-TAX, CIR.1(1), TRICHUR (APPELLANT) (RESPONDENT) REVENUE BY SHRI S.R. SENAPATI, SR.DR ASSESSEE BY SHRI JOSE POTTOKKARAN DATE OF HEARING 08 - 12 - 2011 DATE OF PRONOUNCEMENT 30 - 12 - 2011 2 O R D E R PER N.R.S. GANESAN (JM) THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME-TAX(A)-V, KOCHI DATED 29-12- 2008 AND PERTAINS TO ASSESSMENT YEAR 1995-96. THE ASSESSEE HAS FILED THE CROSS OBJECTION AGAINST THE VERY SAME ORDER OF COMM ISSIONER OF INCOME-TAX(A). THEREFORE, WE HAVE HEARD THE APPEAL OF THE REVENUE AND CROSS OBJECTION OF THE ASSESSEE TOGETHER AND DI SPOSE OF THE SAME BY THIS COMMON ORDER. 2. THE FIRST GROUND OF APPEAL IS WITH REGARD TO ADD ITION OF INTEREST- TAX TO THE TAXABLE INCOME OF THE ASSESSEE. 3. SHRI S.R SENAPATI, THE LD.DR SUBMITTED THAT FOR THE ASSESSMENT YEARS 1994-95, 1995-96, 1998-99 AND 1999-2000, THIS TRIBUNAL CONSIDERED THIS ISSUE IN ITA NOS.650 TO 653/COCH/20 07 AND FOUND THAT THE RELIEF OBTAINED IN THE INTEREST TAX ASSESSMENT HAS TO BE TAXED IN THE YEAR IN WHICH THE BENEFIT WAS RECEIVED, THEREFO RE, IT CANNOT BE ASSESSED IN THE SUBSEQUENT ASSESSMENT YEAR. THE TR IBUNAL HAS ALSO FOUND THAT THE RELIEF GRANTED TO THE ASSESSEE BY TH E APPELLATE AUTHORITY IN THE INTEREST-TAX ASSESSMENT IS A SUBSEQUENT DEVE LOPMENT AFTER COMPLETION OF THE IMPUGNED INCOME-TAX ASSESSMENT AN D THEREFORE, SUCH A SUBSEQUENT EVENT IS NOT A MISTAKE APPARENT O N THE INCOME-TAX ASSESSMENT. HOWEVER, THE REVENUE HAS FILED THE APPE AL AGAINST THE 3 ORDER OF THE TRIBUNAL WHICH IS PENDING BEFORE THE HI GH COURT. ON A QUERY FROM THE BENCH WHETHER THE HIGH COURT STAYED T HE OPERATION OF THE ORDER OF THIS TRIBUNAL FOR THE EARLIER ASSESSME NT YEARS, THE LD.DR VERY FAIRLY SUBMITTED THAT THE HIGH COURT HAS NOT G RANTED ANY STAY. 4. WE HAVE HEARD, SHRI JOSE POTTOKKARAN, THE LD.REP RESENTATIVE FOR THE ASSESSEE ALSO. FOR THE YEAR UNDER CONSIDERATIO N ALSO, THE ASSESSING OFFICER RECTIFIED THE ORDER OF THE ASSESS MENT U/S 154 WHILE GIVING EFFECT TO THE ORDER OF THE COMMISSIONER OF I NCOME-TAX(A) DATED 31-08-2007 FOR THE ASSESSMENT YEAR 1995-96. FROM T HE ORDER OF THE LOWER AUTHORITIES IT APPEARS THAT THE INTEREST-TAX REFUND RELATING TO ASSESSMENT YEAR 1995-96 WAS OFFERED AS INCOME FOR T HE ASSESSMENT YEAR 2005-06 IN WHICH YEAR THE ASSESSEE RECEIVED TH E REFUND. WHEN THE ASSESSEE OFFERED INTEREST-TAX REFUND IN THE YEA R IN WHICH THE REFUND WAS ACTUALLY RECEIVED, WE DO NOT FIND ANY RE ASON TO MAKE ANY ADDITION FOR THE YEAR UNDER CONSIDERATION. BY FOLL OWING THE ORDER OF THIS TRIBUNAL FOR EARLIER ASSESSMENT YEARS REFERRED ABOVE WE UPHOLD THE ORDER OF THE COMMISSIONER OF INCOME-TAX(A). 5. THE NEXT ISSUE ARISES FOR CONSIDERATION IS CHARG ING OF INTEREST U/S 234D OF THE INCOME-TAX ACT. 6. WE HEARD THE LD.DR AND THE LD.REPRESENTATIVE FOR THE ASSESSEE. ADMITTEDLY THIS ISSUE WAS ALSO CONSIDERED BY THIS T RIBUNAL IN THE 4 ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 1994-95 IN ITA NO.192/COCH/2009 DATED 16-09-2011. THIS TRIBUNAL P LACING RELIANCE ON THE JUDGMENT OF KERALA HIGH COURT IN COMMISSIONE R OF INCOME-TAX VS KERALA CHEMICALS AND PROTEINS LTD (2010) 323 ITR 584 (KER) FOUND THAT CHARGING OF INTEREST U/S 234B IS LEGALLY VALID . HOWEVER, THIS TRIBUNAL FOUND THAT INITIAL REFUND FOR THE ASSESSME NT YEAR 1994-95 WAS GRANTED ON 03-01-1996 AND CLARIFIED THAT THE INTERE ST SHALL BE RESTRICTED TO THE PERIOD 01-06-2003 ONWARDS. BY FO LLOWING THE DECISION OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL AND THE JUDGMENT OF THE HIGH COURT, WE UPHOLD THE LEVY OF INTEREST. HOWE VER, THE QUANTUM OF INTEREST MAY BE DECIDED BY THE ASSESSING OFFICER , AFTER CONSIDERING THE REFUND, IF ANY, GRANTED INITIALLY. WITH THE AB OVE OBSERVATION, THE ORDER OF THE COMMISSIONER OF INCOME-TAX(A) IS UPHEL D. 7. THE NEXT GROUND OF APPEAL IS WITH REGARD TO INTE REST U/S 244A OF THE ACT. BOTH THE REPRESENTATIVES FOR THE REVENUE AND THE ASSESSEE HAS FAIRLY CONCEDED THAT THIS ISSUE HAS ALSO CONSID ERED BY THE TRIBUNAL IN THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2004-05. THIS TRIBUNAL, AFTER CONSIDERING THE FACTS OF THE CASE F OUND THAT INTEREST U/S 244A IS COMPENSATORY. ACCORDINGLY, WE UPHOLD THE L EVY OF INTEREST/S 244A OF THE ACT. BY FOLLOWING THE ORDER OF THIS TR IBUNAL FOR THE ASSESSMENT YEAR 1994-95 WE UPHOLD THE ORDER OF COMM ISSIONER OF INCOME-TAX(A) AND DISMISS THE GROUND RAISED BY THE REVENUE. 5 8. NOW COMING TO THE CROSS OBJECTION, THE CROSS OBJ ECTION IS ONLY FILED TO SUPPORT THE ORDER OF COMMISSIONER OF INCOM E-TAX(A). NO INDEPENDENT ISSUE IS RAISED IN THE CROSS OBJECTION. THEREFORE, THE CROSS OBJECTION IS NOT MAINTAINABLE. ACCORDINGLY, THE SA ME IS DISMISSED. 9. IN THE RESULT, BOTH THE APPEAL OF THE REVENUE AN D THE CROSS OBJECTION OF THE ASSESSEE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH DECEMBER, 2011 SD/- SD/- (SANJAY ARORA) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER ERNAKULAM, DT : 30 TH DECEMBER, 2012 PK/- COPY FORWARDED TO: 1. ACIT, CIR.1, TRICHUR 2. THE KERALA STATE FINANCIAL ENTERPRISES LTD, BHADRA THA, MUSEUM ROAD, TRICHUR 3. THE COMMISSIONER OF INCOME-TAX(A)-I, KOCHI 4. THE COMMISSIONER OF INCOME-TAX, TRICHUR 5. THE DR (TRUE COPY) BY ORDER ASSTT.REGISTRAR, INCOME-TAX APPELLATE TRIBUNAL , COCHIN 6