DCIT 2(1)(1), MUMBAI V. ASIA INVESTMENTS LTD, MUMBAI

ITA 1139/MUM/2017

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 0676 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-11-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2004-2005
• Appeal Filed On: 17-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: PRASAD M BAPAT
• Keywords: Rectification of order
• Section: 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A , MUMBAI BEFORE SHRI C.N. PRASAD, HON'BLE JUDICIAL MEMBER AND SHRI RAJESH KUMAR , HON'BLE ACCOUNTANT MEMBER ITA NO. 1139 /MUM/201 7 (A.Y: 2004 - 05 ) D.C.I.T. 2(1)(1) R.NO. 561, 5 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400 020 V. M/S. ASIA INVESTMENTS LTD MAGNET HOUSE, DOG G ALL ROAD, BALLARD ESTATE, FORT, MUMBAI 400 038 PAN: AAACA 4539 K (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI PRASAD M BAPAT DEPARTMENT BY : SHRI ANOOP HIWASE DATE OF HEARING : 23.08.2018 DATE OF PRONOUNCEMENT : 16 .11 .2018 O R D E R PER C. N. PRASAD (JM) 1. THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 3, MUMBAI [HEREINAFTER IN SHORT LD.CIT(A)] DATED 16.11.2016 FOR THE ASSESSMENT YEAR 2004 - 05 IN SUSTAINING THE ORDER OF THE ASSESSING OFFIC ER IN LEVYING THE INTEREST U/S. 220(2) OF THE ACT. 2. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT INTEREST U/S. 220(2) OF THE ACT WAS CHARGED BY THE ASSESS ING OFFICER EVEN DURING 2 ITA NO.1139/MUM/2017 (A.Y: 2004 - 05) M/S. ASIA INVESTMENTS LTD THE PERIOD WHEN THE STAY O F DEMAND WAS GRANTED BY THE COMMISSIONER OF INCOME - TAX. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT , NO INTEREST IS CHARGEABLE U/S. 220(2) OF THE ACT WHEN THE DEMAND IS STA YED BY THE COMMISSIONER OF INCOM E - TAX AND THIS WAS CONSIDERED BY THE LD.CIT(A) AND DELETED THE INTEREST FOR THE PERIOD WHEN THE STAY WAS GRANTED AND LD. COUNSEL FOR THE ASSESSEE STRONGLY PLACED RELIANCE ON THE ORDER OF THE LD.CIT(A). 3. LD. DR VEHEMENTLY SUPPORTED THE O RDERS OF THE ASSESSIN G OFFICER. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE ORDERS OF THE AUTHORITIES BELOW . THE ONLY ISSUE TO BE DECIDED AS TO WHETHER ASSESSEE IS LIABLE FOR INTEREST U/S. 220(2) OF THE ACT FOR THE PERIOD WHEN THE STAY WAS GRANTED BY THE COMMISSIONER OF INCOME - TAX. THIS ASPECT OF THE MATTER HAS BEEN CONSIDERED WITH REFERENCE TO THE SUBMISSIONS OF THE ASSESSEE AND THE STAY GRANTED BY THE COMMISSIONER OF INCOME - TAX AND IT WAS HELD BY THE LD.CIT(A) THAT NO INTEREST IS CHARGEABLE U/S. 220(2) OF THE ACT DURIN G THE PERIOD WHEN THE STAY IS IN OPERATION OBSERVING AS UNDER: - 6.2 I HAVE CAREFULLY CONSIDERED RIVAL SUBMISSION AND FACTS OF THE CASE. THE NOTICE OF DEMAND WAS SERVED ON THE APPELLANT ON 26.12.2006 IN RESPECT OF ASSESSMENT ORDER PASSED ON 30.09.2006. TH EREFORE, THE DEMAND WAS FALL DUE ON 27.01.2007. THE APPELLANT WAS GRANTED STAYED OF DEMAND BY THE CIT - 2, MUMBAI ON 08.03.2007. ACCORDINGLY, THE APPELLANT PAID THE DEMAND ON 24.03.2007. THEREFORE, INTEREST UNDER SECTION 220(2) IS CHARGEABLE FOR 3 MONTHS ONL Y I.E., FROM 28.01.2007 TO 24.03.2007. FURTHER, ON RECEIPT THE ORDER OF ID.CIT(A), THE AO HAS GIVEN EFFECT TO SAID ORDER OF ID.CIT(A) ON 11.11.201 0 RAISING THE DEMAND OF RS.83,21,407/ - . THE DEMAND N OTICE WAS RECEIVED BY THE APPELLANT ON 15.12.2010 WHICH WA S FALLEN DUE ON 14.12.2011 I.E., AFTER LAPSED OF 30 DAYS. THE APPELLANT PAID DEMAND OF RS.83 LAKHS ON 23.03.2011 I.E., THE DELAY OF 3 MONTHS AND HENCE INTEREST UNDER SECTION 220(2) CHARGEABLE FOR 3 MONTHS I.E., FROM 14.01.2011 TO 3 ITA NO.1139/MUM/2017 (A.Y: 2004 - 05) M/S. ASIA INVESTMENTS LTD 23.03.2011. WHILE PASSING THE RECTIFICATION ORDER UNDER SECTION 154 DT. 0 9. 0 3.2 01 5, THE AO HAVE CHARGED INTEREST UNDER SECTION 220(2) OF THE IT ACT WHICH IS AS UNDER: - I. AMOUNT CHARGED OF RS.3,99,642/ - HAVE PANEL 28.02.2007 TO 24.03.2007 I.E., FOR 3 MONTHS. II. THE AO FURTHER CHARG ED INTEREST FOR THE PERIOD 01.04.2007 TO 09.03 .2015 AMOUNTING TO RS.83,72,207/ - . THE AO HAS WRONGLY CONSIDERED THE PERIOD FROM 01.04.2007 INSTEAD OF 14.11.2011 AS DURING THE PERIOD 01.04.2007 TO 14.11.2011, THE DEMAND WAS STAYED BY THE LD.CIT(A) - 2, MUMBAI. 6.3 FURTHER, THE APPELLANT PAID TAXES OF RS.83,21,407/ - ON 22.03.2011 FOR WHICH CREDIT WAS NOT GIVEN. THEREFORE, INTEREST UNDER SECTION 220(2) CHARGED BY THE AO FROM 22.03.2011 TILL 09.03.2015 IS NOT CORRECT, AS ENTIRE DEMAND WAS PAID BY THE APPELLANT ON 22.03.2011. AT THE MOST INTEREST SHOULD HAVE BEEN CHARGED FOR 3 MONTHS UNDER SECTION 220(2) I.E., FOR 14.01.2011 TO 22.03.2011 WHICH COMES OUT TO RS.2,61,631/ - . WITH THIS REMARKS, THE AO IS DIRECTED TO FOLLOW THESE FINDINGS AND GIVE CREDIT OF THE PERIOD ON WHICH ID.CIT HAS STAYED AND THE ASSESSEE'S SHOULD NOT BE TREATED IN DEFAULT. FURTHER, THE AO IS ALSO DIRECTED TO GIVE CREDI T OF TAXES PAID OF RS.83,21,407/ - WHICH WAS PAID BY THE APPELLANT ON 2 2.03.2011. THE DEMAND OF RS.2,61,600/ - - IS CONFIRMED. IN VIEW OF THE ABOVE, GROUNDS NO. 2 & 3 ARE PARTLY ALLOWED. 5. ON A CAREFUL CONSIDERATION OF THE ABOVE OBSERVATIONS OF THE LD.CIT(A) AND THE VIEW TAKEN BY HIM, WE DO NOT FIND ANY VALID REASON TO INTERFERE WITH THE LD.CIT(A) DECISION IN HOLDING THAT THERE SHALL NOT B E ANY INTEREST U/S. 220(2) OF THE ACT DURING THE PERIOD WHEN THE STAY WAS GRANTED TO THE ASSESSEE. THUS , WE SUSTAIN THE ORDER OF THE LD.CIT(A) AND REJECT THE GROUND RAISED BY THE REVENUE. 6. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 16 TH NOVEMBER , 2018 SD/ - SD/ - ( R AJESH KUMAR) ) (C.N. PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI / DATED 16 / 11 / 2018 GIRIDHAR , SR. PS 4 ITA NO.1139/MUM/2017 (A.Y: 2004 - 05) M/S. ASIA INVESTMENTS LTD COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY// BY ORDER (ASSTT. REGISTRAR) ITAT, MUM