DCIT 2(1)(1), MUMBAI V. BHARAT PETROEUM CORPORATION LTD, MUMBAI

ITA 1163/MUM/2017

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 8076 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-12-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2009-2010
• Appeal Filed On: 20-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MISHRA
• Assessee Lawyers: J D J MISTRI
• Keywords: Rectification of order
• Section: 143(3); 234B; 154

Judgement Text

BHARAT PETROLEUM CORP LTD., MUMBAI ITA NO. 1163/MUM/2017 1 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH B, MUMBAI BEFORE SHRI JOGINDER SINGH, VICE-PRESIDENT AND SHRI M. BALAGANESH, ACCOUNTANT MEMBER ITA NO. : 1163/MUM/2017 (ASSESSMENT YEAR: 2009-10) DCIT 2(1)(1) ROAD NO. 561, 5 TH FLOOR, AAYAKAR BHAVAN, MUMBAI - 400020 VS BHARAT PETROLEUM CORPORATION LTD BHARAT BHAVAN, 4 & 6, CIRRIMBHOY ROAD, BALLARD ESTATE, MUMBAI 400 001 .: PAN: AAACB2902M (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S.K. MISHRA (DR) RESPONDENT BY : SHRI J. D.J. MISTRI, SR. ADVOCATE /DATE OF HEARING : 19-12-2018 / DATE OF PRONOUNCEMENT : 19-12-2018 ORDER PER M. BALAGANESH, AM : 1. THIS APPEAL BY THE REVENUE IS AGAINST THE ORDER OF THE LD. CIT(A)-3, MUMBAI FOR THE A.Y 2009-10, WHICH IN ITSELF DIRECTED AGAINST THE ORDER PASSED BY THE ASSESSING OFFICER (FOR SHORT THE A.O) U/S. 143(3) R.W.S 147 R.W.S 250 OF THE INCOME-TAX ACT, 1961 (FOR SHORT THE ACT). 2. THE ONLY ISSUE TO BE DECIDED IN THE INSTANT APPEAL IS AS TO WHETHER THE LD. CIT(A) WAS JUSTIFIED IN HOLDING THAT THE LD. A.O HAD WRONGLY CHARGED INTEREST U/S 220(2) OF THE ACT IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. THE BRIEF FACTS OF THIS ISSUE ARE THAT THE RETURN OF INCOME WAS FILED BY THE ASSESSEE ON 29.09.2009 DECLARING TAXABLE INCOME OF RS. 1497,44,74,604/- AND TAXES DUE AS PER THE RETURN OF INCOME FILED AMOUNTING TO RS. 543,05,15,057/- WAS PAID AT THE TIME OF FILING OF THE RETURN. IN THE ASSESSMENT MADE UNDER SECTION BHARAT PETROLEUM CORP LTD., MUMBAI ITA NO. 1163/MUM/2017 2 143(3) OF THE ACT DATED 29.12.2011, TAXABLE INCOME WAS DETERMINED AT RS. 1644,79,28,192/- AND RS. 66,24,88,320/- WAS DETERMINED AS PAYABLE BY THE ASSESSEE. INTIMATION UNDER SECTION 245 OF THE ACT DATED 20.02.2012 WAS RECEIVED INFORMING THE ASSESSEE THAT THE FOLLOWING AMOUNTS WERE DUE FROM THE ASSESSEE AS ON 20.02.2012 FOR THE A.Y 2006-07 RS. 1,42,24,358/- AND FOR THE A.Y 2009-10 RS. 66,24,88,320/-. AS A RESULT OF ORDER UNDER SEC. 154/250 FOR THE A.Y 1998-99 AND 2004-05, AN AMOUNT OF RS. 71,43,74,829/- WAS DETERMINED REFUNDABLE TO THE ASSESSEE AND THE SAME WAS PROPOSED TO BE SET OFF AGAINST THE OUTSTANDING DEMAND AS STATED ABOVE. SUBSEQUENTLY, ORDER GIVING EFFECT IN RESPECT OF ITATS ORDER WAS PASSED ON 12.03.2014 IN WHICH THE REFUND OF RS. 58,90,36,488/- WAS DETERMINED PAYABLE TO THE ASSESSEE. THIS AMOUNT WAS PAID TO THE ASSESSEE VIDE PAY ORDER DATED 27.04.2014. 4. THEREAFTER, THE IMPUGNED ORDER UNDER SEC. 154 OF THE ACT DATED 5TH MARCH 2015 WAS PASSED IN WHICH IT WAS STATED THAT IN THE ORDER PASSED UNDER SEC. 143(3) R.W.S 147 R.W.S 250 OF THE ACT DATED 12.03.2014, INTEREST U/S 234B WAS OMITTED TO BE CHARGED AND IN THIS IMPUGNED ORDER, THE INTEREST THAT WAS OMITTED TO BE CHARGED WAS LEVIED AMOUNTING TO RS. 20,17,58,208/-. HOWEVER, IN THE ITNS-150A IT WAS FOUND THAT INTEREST U/S 220(2) OF THE ACT AMOUNTING TO RS. 3,08,57,270/- WAS ALSO CHARGED. 5. THE ASSESSEE STATED THAT THE ASSESSMENT ORDER FOR THE A.Y 2011-12 WAS PASSED U/S 143(3) OF THE ACT ON 17.03.2015. VIDE LETTER DATED 23.03.2015, THE ASSESSEE POINTED OUT TO THE LD. AO THAT THE DEMAND SHOWN AS OUTSTANDING THEREON REQUIRED RECTIFICATION. ACCORDINGLY A RECTIFICATION ORDER U/S 154 OF THE ACT WAS PASSED FOR THE A.Y 2011-12 ON 22.04.2015 DETERMINING REFUND OF RS. 40,52,66,183/-. THIS REFUND WAS PARTLY ADJUSTED AGAINST THE DEMAND OF A.Y 2010-11 TO THE TUNE OF RS. 4137960/- AND DEMAND RAISED U/S 154 OF THE ACT DATED 05.03.2015 FOR A.Y 2009-10 TO THE TUNE OF RS. 256120660/-. THE REMAINING REFUND BHARAT PETROLEUM CORP LTD., MUMBAI ITA NO. 1163/MUM/2017 3 OF RS. 14,50,07,563/- WAS ISSUED TO THE ASSESSEE. THE ASSESSEE PLEADED THAT FOR THE A.Y 2009-10 AGAINST THE DEMAND OUTSTANDING AS PER THE ORDER U/S 143(3) OF THE ACT, THERE WAS A REFUND DUE THAT WAS ADJUSTED BY INTIMATION U/S 245 OF THE ACT. AGAINST THE DEMAND UNDER SEC. 154 O THE ACT DATED 5 TH MARCH 2015, ON ACCOUNT PAYMENT MADE ON 27 TH MARCH 2015 OF RS. 35,38,97,040/- WAS AVAILABLE AND VIDE ORDER UNDER SEC. 154 OF THE ACT FOR A.Y 2011-12 DATED 22.04.2015 REFUND OF RS. 14,50,07,563/- WAS GRANTED TO THE ASSESSEE AS EXPLAINED ABOVE, AND THEREFORE SINCE NO DEMAND WAS OUTSTANDING BEYOND 30 DAYS AFTER THE INTIMATION OF DEMAND UNDER SEC. 156, INTEREST UNDER SEC. 220(2) OF THE ACT CANNOT BE LEVIED. 6. THE LD. AO HOWEVER PROCEEDED TO CHARGE INTEREST U/S 220(2) OF THE ACT IN THE ORDER PASSED U/S 154 OF THE ACT ON THE GROUND THAT INTEREST U/S 234B OF THE ACT WAS NOT PAID BY THE ASSESSEE BEYOND 30 DAYS. THE LD. CIT(A) DISMISSED THIS ACTION OF THE A.O IN CHARGING INTEREST U/S 220(2) OF THE ACT BY OBSERVING AS UNDER: 6.2 I HAVE CAREFULLY GONE THROUGH THE RIVAL SUBMISSIONS AND THE FACTS OF THE CASE. THE A.O HAS WRONGLY CHARGED INTEREST U/S 220(2) OF THE ACT AS THE DEMAND OF RS. 76,16,60,559/- U/S 154 OF THE ACT WAS ADJUSTED AGAINST THE REFUND DETERMINED IN THE A.Y 2011-12 ON 27.03.2015. THE INTEREST U/S 220(2) IS TO BE CHARGED ONLY AFTER THE STATUTORY TIME OF 30 DAYS OF THE SERVICE OF THE NOTICE U/S 156. THE DEMAND RAISED FOR A.Y 2009-10 VIDE ORDER U/S 154 DATED 05.03.2015 HAS FALLEN DUE ONLY AFTER 30 DAYS, WHEREAS THE AO HAS CHARGED INTEREST U/S 220(2) ON THE SAME DATED I.E ON 05.03.2015. SINCE THE DEMAND WAS INTIMATED U/S 156, WHICH WAS ADJUSTED AGAINST THE REFUND DETERMINED IN THE A.Y 2011-12, NO AMOUNT WAS OUTSTANDING BEYOND 30 DAYS AND INTEREST U/S 220(2) IS NOT CHARGEABLE. IT IS ALSO BEEN HELD BY THE JURISDICTIONAL ITAT B BENCH MUMBAI IN THE CASE OF NANDALAL H MEHTA VS. ITO 25(1)(4), MUMBAI IN ITA NO. 6818/MUM/2010, IN WHICH IT HAS BEEN HELD THAT IF THE AO HAS ADJUSTED THE DEMAND AGAINST THE REFUND OF EARLIER YEARS, INTEREST U/S 220(2) OF THE IT ACT CANNOT BE CHARGED. 6.3 IN VIEW OF THE ABOVE FACTS AND THE ITAT DECISION ON THE ISSUE, I AM OF THE OPINION THAT THE AO HAS WRONGLY CHARGED THE INTEREST U/S 220(2) OF THE ACT, AS THE DEMAND DETERMINED ORDER U/S 154 DATED 05.03.2015 IS WRONG AS THE DEMAND HAS NOT FALLEN BHARAT PETROLEUM CORP LTD., MUMBAI ITA NO. 1163/MUM/2017 4 DUE AND SAME WAS FOUND ADJUST THE REFUND FOR A.Y 2011-12. IN VIEW OF THE SAME, GROUNDS NO. 1 TO 3 ARE ALLOWED. 7. AGGRIEVED THE REVENUE IS IN APPEAL BEFORE US. 8. WE HAVE HEARD RIVAL SUBMISSIONS. AT THE OUTSET, THE FACTS NARRATED HEREINABOVE REMAIN UNDISPUTED AND HENCE THE SAME ARE NOT REITERATED FOR THE SAKE OF BREVITY. WE FIND THAT THE INTEREST U/S 234B OF THE ACT WAS NOT CHARGED BY THE LD. AO WHILE RAISING THE DEMAND IN THE ORIGINAL ASSESSMENT. THIS WAS SOUGHT TO BE RECTIFIED BY THE LD. AO IN THE ORDER U/S 154 OF THE ACT. THIS DEMAND RAISED U/S 154 OF THE ACT ULTIMATELY GOT ADJUSTED WITH THE REFUNDS. WHEN THERE IS NO DEMAND OUTSTANDING MORE THAN 30 DAYS FROM THE DATE ON WHICH NOTICE U/S 154 OF THE ACT WAS SERVED ON THE ASSESSEE, THE PRIMARY CONDITION STIPULATED IN SEC. 220(1) OF THE ACT DOES NOT COME INTO OPERATION. HENCE THE CHARGING OF INTEREST U/S 220(2) WOULD BE AUTOMATICALLY OUTSIDE THE PURVIEW OF ANY LEVY. THESE FACTS WERE DULY APPRECIATED BY THE LD. CIT(A), WHICH IN OUR CONSIDERED OPINION, DOES NOT CALL FOR ANY INTERFERENCE. ACCORDINGLY, THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 9. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH DECEMBER, 2018 SD/- SD/- (JOGINDER SINGH) (M. BALAGANESH) VICE PRESIDENT ACCOUNTANT MEMBER MUMBAI, DATE: 19 TH DECEMBER, 2018 BHARAT PETROLEUM CORP LTD., MUMBAI ITA NO. 1163/MUM/2017 5 / COPY TO:- 1) / THE APPELLANT. 2) / THE RESPONDENT. 3) THE CIT/DRP -11, MUMBAI. 4) THE CIT/DIT CONCERNED , MUMBAI. 5) , , / THE D.R. K BENCH, MUMBAI. 6) [ \ COPY TO GUARD FILE. / BY ORDER / / TRUE COPY / / / , DY. / ASSTT. REGISTRAR I.T.A.T., MUMBAI *RAVI KUMAR. PS