NOVARTIS INDIA LTD, MUMBAI V. ACIT CIR 7(1), MUMBAI

ITA 1249/MUM/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 7870 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-03-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Next Hearing Date: 24-02-2011
• Assessment Year: 1995-1996
• Appeal Filed On: 16-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUM EET KUMAR
• Assessee Lawyers: J D MISTRY
• Section: 244A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'J' BENCH, MUMBAI BEFORE SHRI R.V. EASWAR, PRESIDENT AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA NO. 1249/MUM/2010 (ASSESSMENT YEAR: 1995-96) M/S. NOVARTIS INDIA LIMITED ACIT, CIRCLE - 7(1) SANDOZ HOUSE, SHIVSAGAR ESTATE AAYAKAR BHAVAN, M.K. ROAD DR. ANNIE BESANT ROAD, WORLI VS. MUMBAI 400020 MUMBAI 400018 PAN - AAACH 2914 F APPELLANT RESPONDENT APPELLANT BY: SHRI J.D. MISTRY RESPONDENT BY: SHRI SUMEET KUMAR O R D E R PER B. RAMAKOTAIAH, A.M. THIS APPEAL BY ASSESSEE IS AGAINST THE ORDER OF THE CIT(A)- XIII, MUMBAI DATED 12.10.2009. 2. ASSESSEE HAS RAISED THE FOLLOWING GROUND: - THE COMMISSIONER OF INCOME-TAX (APPEALS)-13, MUMBA I [HEREINAFTER REFERRED AS THE CIT(A)] ERRED IN DIRECTING THE AO T O GRANT INTEREST UNDER SECTION 244A FROM APRIL, 2003 TO 9 TH SEPTEMBER, 2005 BEING THE DATE OF GRANT OF REFUND AS AGAINST FROM MARCH 2003 TO 9 TH SEPTEMBER, 2005 BEING THE DATE OF RECEIPT OF REFUND. 3. THE ISSUE IN THIS APPEAL IS WITH REFERENCE TO THE G RANT OF INTEREST UNDER SECTION 244A. THERE IS NO DISPUTE WITH REFERENCE TO THE SANCTION OF INTEREST UNDER THAT SECTION. THE PERIOD FOR WHICH THE INTERE ST IS TO BE SANCTIONED WAS DISPUTED. THE ASSESSEES CONTENTION WAS THAT THE CI T(A) ERRED IN GRANTING FROM APRIL 2003 TO 31.08.2005 WHEREAS THE ASSESSEE COMPANY IS ENTITLED FROM APRIL 2003 TO SEPTEMBER 2005 (BEING DATE OF RE CEIPT ON 09.09.2005). THE DIRECTION OF THE CIT(A) IS AS UNDER: - THE AO HAS COMPUTED INTEREST UNDER SECTION 244A ON THE AMOUNT OF REFUND GRANTED VIE THE ORDER UNDER APPEAL FROM APRI L 2003 TO APRIL 2004 (BEING THE DATE OF PASSING OF THE ORDER UNDER APPEAL). IT HAS ITA NO. 1249/MUM/2010 M/S. NOVARTIS INDIA LIMITED 2 BEEN ALLEGED THAT THE ORDER DATED 13 TH APRIL, 2005 PASSED BY THE AO WAS RECEIVED BY THE APPELLANTS ON 9 TH SEPTEMBER, 2005. THE APPELLANTS HAS STATED THAT THEY ARE ENTITLED T O INTEREST UNDER SECTION 244A FROM APRIL, 2003 TO SEPTEMBER, 2005 (B EING THE DATE OF RECEIPT OF THE REFUND ORDER). THE AO SHALL RE-VERIFY THE FACTS AND IS DIRECTED T O GRANT INTEREST U/S 244A FROM 1 ST APRIL, 2003 TO THE DATE ON WHICH THE REFUND WAS GRANTED (AFTER VERIFYING THE FACTS). 4. AS SEEN FROM THE COMPUTATION OF TAX (ITNS 150A) E NCLOSED TO THE ORDER DATED 13.04.2005 THE PERIOD FOR WHICH THE INT EREST WAS GRANTED WAS NOT MENTIONED. THE CIT(A) HAS ALREADY GIVEN DIRECTI ONS TO VERIFY THE FACTS AND GRANT INTEREST FROM 1 ST APRIL, 2003 TO THE DATE ON WHICH THE REFUND WAS GRANTED. 5. THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CITI B ANK VS. CIT IN ITA NO. 6 OF 2001 DATED 17.07.2003 HAS CONSIDERED THE I SSUE AND DECIDED AS UNDER: - 2. AT THE OUTSET, WE MAY MENTION THAT THE EXPRESSI ON REFUND ORDER STANDS FOR THE PAY ORDER WHICH IS ACTUALLY RECEIVED BY THE ASSESSEE PURSUANT TO THE ORDER SANCTIONING THE REFUND. THERE FORE, THE ABOVE QUESTION HAS TO BE READ IN THE CONTEXT OF THE SAID CLARIFICATION. ON SEVERAL OCCASIONS, THE REFUND ORDER IS NOT ACCOMPAN IED BY A SUPPORTING CHEQUE/PAY ORDER. THE CHEQUE IS RECEIVED BY THE ASSESSEE AFTER THE REFUND ORDER IS ISSUED BY THE DEPARTMENT. CONSEQUENTLY, THERE IS A TIME-GAP BETWEEN THE REFUND ORDER AND TH E RECEIPT OF THE CHEQUE/PAY ORDER. THE ASSESSEE CLAIMS INTEREST FOR THIS TIME-GAP. A SIMILAR POINT AROSE BEFORE THE BOMBAY HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME-TAX VS. PFIZER LIMITED REPOR TED IN 191 ITR 626. IN VIEW OF THE SAID JUDGMENT, WE ANSWER THE AB OVE QUESTION IN THE NEGATIVE I.E. IN FAVOUR OF THE ASSESSEE AND AGA INST THE DEPARTMENT. THEREFORE, THE A.O. IS DIRECTED TO EXAMINE THE DATE S AND ALLOW INTEREST. INCIDENTALLY, THE REFUND SEEMS TO HAVE BEEN ADJUSTE D TO SOME OTHER DEMANDS. THE A.O. IS DIRECTED TO EXAMINE THE RESPEC TIVE DATES AND GRANT THE INTEREST, BEARING IN MIND THE ABOVE JUDICIAL PRINCI PLES BY DETERMINING THE STARTING DATE AND THE PERIOD FOR WHICH THE INTEREST IS TO BE GRANTED, CLEARLY MENTIONING THE DATES AND HOW THEY WERE ARRIVED AT I N A DETAILED ORDER. THE ASSESSEE HAS A RIGHT TO KNOW THE PERIOD FOR WHICH T HE INTEREST WAS GRANTED. THE ASSESSEE SHOULD BE GIVEN AN OPPORTUNITY BEFORE DECIDING THE ISSUE SO ITA NO. 1249/MUM/2010 M/S. NOVARTIS INDIA LIMITED 3 THAT THE DISPUTES IF ANY CAN BE EXAMINED AT THE THR ESHOLD ITSELF. A.O. IS DIRECTED ACCORDINGLY. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FO R STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH MARCH 2011. SD/- SD/- (R.V. EASWAR) (B. RAMAKOTAIAH) PRESIDENT ACCOUNTANT MEMBER MUMBAI, DATED: 18 TH MARCH 2011 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) XIII, MUMBAI 4. THE CIT VII, MUMBAI CITY 5. THE DR, J BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.