RELIANCE JIO INFOCOMM LTD, MUMBAI V. ACIT CENTRALISED PROCESSING CELL-TDS, MUMBAI

ITA 1251/MUM/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 1638 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-09-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2014-2015
• Appeal Filed On: 05-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D G
• Keywords: TDS
• Section: 244A; 200A; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH D, MUMBAI BEFORE SHRI RAJESH KUMAR, ACCOUNTANT MEMBER AND SHRI RAM LAL NEGI, JUDICIAL MEMBER ITA NO.1251/M/2018 ASSESSMENT YEAR: 2014-15 M/S. RELIANCE JIO INFOCOMM LTD., 9 TH FLOOR, MAKER CHAMBERS, IV, NARIMAN POINT, MUMBAI 400 021 PAN: AABCI6363G VS. ACIT (CPC)-TDS CPC, AAYAKAR BHAVAN, SECTOR-3, VAISHALI, GHAZIABAD, U.P. 201010, AYURVEDIC HOSPITAL BUILDING, CHARNI ROAD (WEST), MUMBAI - 400020 (APPELLANT) (R ESPONDENT) PRESENT FOR: ASSESSEE BY : SHRI JITENDRA JAIN, A.R. REVENUE BY : SHRI D.G. PANSARI, D.R. & SHRI AMIT PRATAP SINGH, D.R. DATE OF HEARING : 27.09.2019 DATE OF PRONOUNCEMENT : 29.10.2019 O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSES SEE AGAINST THE ORDER DATED 22.01.2018 OF THE COMMISSIO NER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS TH E CIT(A)] RELEVANT TO ASSESSMENT YEAR 2014-15. 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APP EAL: THE GROUNDS OF APPEAL SET BELOW ARE WITHOUT PREJUDI CE TO EACH OTHER. GROUND NO. 1: ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ['CIT(A)'] HAS ERRED IN HOLDING THAT MONTH REFERRED UNDER SECTION 201(1 A) OF THE ACT REFERS T O 'BRITISH CALENDAR MONTH AND NOT A PERIOD OF 30 DAYS, THEREBY CONFIRMING THE ORD ER OF THE ASSESSING OFFICER. ITA NO.1251/M/2018 M/S. RELIANCE JIO INFOCOMM LTD. 2 GROUND NO. 2: ON THE FACTS AND CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ['CIT(A)*] FAI LED TO APPRECIATE THE MEANING OF THE WORDS / PHRASE / CONNOTATION 'COMPRISED IN A PERIOD' APPEARING IN RULE 119A(B) AND HAS ERRED IN HOLDING THAT THERE IS NO M ENTION OF CALCULATION OF A PERIOD IN RULE 119A. GROUND NO. 3: ON THE FACTS AND CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ORDER OF THE ASS ESSING OFFICER FOR LEVY OF INTEREST UNDER SECTION 220(2) AS A CONSEQUENCE TO GROUND NO. 1 AND 2. THE APPELLANT CRAVES LEAVE TO ADD TO, AMEND OR ALTE R, BY DELETION, SUBSTITUTION, MODIFICATION, OR OTHERWISE, THE ABOVE GROUNDS OF AP PEAL, EITHER BEFORE OR DURING THE HEARING OF THE APPEAL OR TILL THE FINAL DISPOSA L OF THE APPEAL. 3. THE ONLY CONTROVERSY INVOLVED IN THE PRESENT APP EAL IS AGAINST THE MEANING TO BE ASSIGNED TO THE WORD MON TH FOR THE PURPOSE OF CALCULATION OF INTEREST UNDER SECTION 20 1(1A) OF THE ACT. 4. THE FACTS IN BRIEF ARE THAT THE AO PASSED ORDER UNDER SECTION 154 READ WITH SECTION 200A OF THE INCOME TAX ACT (HEREINAFTER CALLED AS ACT) ON 23.10.2015 RAISING A DEMAND OF RS.1,370/- ON THE ASSESSEE ON ACCOUNT OF INTEREST O N LATE DEDUCTION/COLLECTION .THE AO HAS CALCULATED THE INT EREST UNDER SECTION 201(1A) FOR 12 MONTHS BY TAKING PERIOD COMM ENCING FROM 01.07.2013 ENDING ON 30.06.2014 THEREBY ROUNDI NG OFF THE STARTING AND THE ENDING MONTH. ACCORDING TO THE AS SESSEE, THE TAX WAS DUE TO BE DEDUCTED ON 22.07.2013 BUT HAS BE EN DEDUCTED ON 19.06.2014 AND THUS CALCULATED THE INTE REST UNDER SECTION 201(1A) FOR 11 MONTHS STARTING FROM 22.07.2 013 ENDING ON 19.06.2014 BY ROUND OFF THE LAST MONTH I.E. JUNE 2014 AS ONE MONTH. THE PROVISIONS OF SECTION 201(1A) OF THE AC T PROVIDES FOR CHARGING OF INTEREST AT THE RATE OF 1% FOR EVERY MO NTH OR PART OF THE MONTH COMMENCING FROM THE DATE OF WHICH TAX WAS DEDUCTIBLE TO THE DATE ON WHICH THE TAX WAS ACTUA LLY DEPOSITED. ITA NO.1251/M/2018 M/S. RELIANCE JIO INFOCOMM LTD. 3 BESIDES RULE 119A(B) OF THE IT RULES PRESCRIBES THA T WHERE INTEREST IS TO BE CALCULATED FOR EVERY MONTH OR PAR T OF THE MONTH COMPRISING A PERIOD IN A FRACTION OF MONTH SHALL BE DEEMED TO BE FULL MONTH. 5. THE LD. CIT(A) DISMISSED THE APPEAL OF THE ASSES SEE BY HOLDING THAT THE MONTH REFERRED TO UNDER SECTION 20 1(1A) OF THE ACT REFERS TO CALENDAR MONTH AND NOT A PERIOD OF 3 0 DAYS AS RECKNONED BY THE ASSESSEE AND ACCORDINGLY DISMISSED THE APPEAL OF THE ASSESSEE BY HOLDING THAT THE MONTH SHOULD BE INCORPORATED AS BRITISH CALENDAR MONTH FOR THE PURP OSE OF CALCULATION OF INTEREST UNDER SECTION 201(1A) OF TH E ACT. 6. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL ON RECORD, WE OBSERVE THAT THE CONTROVERSY BEFORE US I S WHETHER THE CALCULATION OF INTEREST UNDER SECTION 201(1A) OF TH E ACT HAS TO BE CALCULATED ON THE BASIS OF CALENDAR BRITISH MONTH O R A MONTH COMPRISING 30 DAYS STARTING FROM THE DATE ON WHICH TAX WAS DEDUCTABLE TO THE SAME DATE IN THE NEXT MONTH. IN OUR OPINION, THE MONTH AS REFERRED TO SECTION 201(1A) OF THE ACT HAS TO BE A PERIOD OF 30 DAYS STARTING FROM THE DATE ON WHICH T HE TAX WAS DEDUCTABLE TO THE SAME DATE IN THE NEXT MONTH AND I F THE LAST MONTH IS A FRACTION THEN THE TERMINAL MONTH SHOULD BE ROUNDED OFF OR TREATED AS FULL MONTH. THIS CONSTRUCTION WO ULD BE IN ACCORDANCE WITH THE PRINCIPLE THAT INTEREST IS A CO MPENSATION FOR THE VALUE OF MONEY FOR WHICH THE MONEY TO BE DEPOSI TED IN THE CENTRAL EXCHEQUERS REMAINED WITH THE ASSESSEE. PRI OR TO 22.07.2013 THERE WAS NO OBLIGATION TO DEDUCT TAX AN D HENCE INTERPRETATION GIVEN BY THE REVENUE FAILS BECAUSE T HE REVENUE WILL BE ENTITLED TO EVEN FOR THE PERIOD WHEN THERE IS NO DEFAULT. ITA NO.1251/M/2018 M/S. RELIANCE JIO INFOCOMM LTD. 4 THIS ISSUE HAS BEEN SETTLED BY A CATENA OF DECISION S. IN THE CASE OF OIL AND NATURAL GAS COMMISSION VS. ACIT IN ITA N O.1955 TO 1965/AHD/2015, THE CO-ORDINATE BENCH OF THE TRIBUNA L HAS HELD THAT A MONTH AS PER BRITISH CALENDAR AND A MONTH RE CKONED AS PER BRITISH CALENDAR ARE NOT THE SAME THING AND CAN NOT BE USED INTER CHANGEABLY WHILE FORMER REFERRED TO CALENDAR MONTH BY ITSELF, THE LATER REFERRED TO A PERIOD OF TIME WHIC H QUALIFIED TO BE TREATED AS A MONTH. THE DISTINCTION BETWEEN THE SC OPE OF THESE TWO EXPRESSIONS CAN NOT BE IGNORED. IN THIS CASE, THE INTEREST WAS TO BE CHARGED FROM THE PERIOD OF 16.11.2010 TO 14.12.2012 WHICH IS APPARENTLY LESS THAN 25 MONTHS BECAUSE TIL L 14.12.2012, THE PERIOD OF 25 MONTHS HAS NOT LAPSED FROM 16 TH NOVEMBER,2010 AND THE PERIOD ELAPSED IS 24 MONTHS 2 8 DAYS. GOING BY THE PROVISION OF GENERAL CLAUSES ACT THE P ERIOD OF TIME BETWEEN 16.11.2010 TO 14.12.2012 IS LESS THAN 25 MO NTHS AND ACCORDINGLY INTEREST UNDER SECTION 201(1A) OF THE A CT COULD NOT HAVE BEEN LEVIED FOR MORE THAN 25 MONTHS. SIMILARL Y, IN THE CASE OF DCIT, TDS CIRCLE, AHMEDABAD VS. M/S. SUZLON GUJARAT WIND PARK LTD. IN ITA NO.2931 TO 2933/AHD/2015 A.Y. 2013-14 THE CO-ORDINATE BENCH OF THE TRIBUNAL HAS HELD AS U NDER: 3. THE ONLY CONTROVERSY BEFORE US IS AS TO WHET HER, FOR THE PURPOSE OF LEVY OF INTEREST U/S 201(1A), THE TERM 'MONTH' COULD BE GIV EN ORDINARY SENSE, I.E., 'A PERIOD OF 30 DAYS' OR WHETHER IT COULD BE TREATED AS 'BRIT ISH CALENDAR MONTH' AS PER GENERAL CLAUSES ACT . THE ASSESSING OFFICER WORKED OUT AMOUNT OF INTERE ST U/S 201(1A) BASED ON BRITISH CALENDAR MONTH, WHEREAS CI T(A) DIRECTED THE ASSESSING OFFICER TO WORK OUT INTEREST BY ADOPTING PERIOD OF 30 DAYS AS ONE MONTH. I FIND THAT THIS ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASS ESSEE BY THE DECISION OF HON'BLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. ARVIND MILLS LTD , REPORTED IN 16 TAXMANN.COM 291 (GUJ), WHEREIN HON'BLE COURT HAS HE LD THAT FOR THE PURPOSES OF SECTION 244A , TERM 'MONTH' MUST BE GIVEN ORDINARY SENSE OF TERM , I.E., 30 DAYS OF PERIOD AND NOT BRITISH CALENDAR MONTH AS DEFINED UN DER SECTION 3(35) OF GENERAL CLAUSES ACT. SIMILAR VIEW HAS BEEN TAKEN BY THE ITA T IN THE CASE OF OIL & NATURAL GAS COMMISSION VS. ACIT (TDS), SURAT, REPORTED IN [2015 ] 62 TAXMANN.COM 133 (AHMEDABAD-TRIB), WHEREIN IT WAS HELD THAT 'LEVY OF INTEREST U/S 201(1A) IS COMPENSATORY IN NATURE AND THUS GAP OF TIME BETWEEN POINT OF TIME WHEN TAX OUGHT TO HAVE BEEN DEDUCTED AT SOURCES VIS--VIS PO INT OF TIME WHEN TAX WAS ITA NO.1251/M/2018 M/S. RELIANCE JIO INFOCOMM LTD. 5 ACTUALLY DEDUCTED ARE TO BE SEEN AND IT IS IN THIS CONTEXT THAT CONNOTATION OF EXPRESSION 'MONTH' IS TO BE EXAMINED.' IN VIEW OF A FORESAID DECISIONS, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) WHICH IS HEREBY UPHELD. 7. IN THE CASE OF NAVAYUGA QUAZIGUND EXPRESSWAWY (P ) LTD. DCIT IN ITA NO.1651/HYD/2014 177 TTJ (HYD) 390 THE CO- ORDINATE BENCH OF THE TRIBUNAL HAS HELD THAT MONTH FOR THE PURPOSE OF COMPUTING OF INTEREST UNDER SECTION 201( 1A) HAS TO BE GIVEN ORDINARY MEANING OF THE TERM 30 DAYS AND N OT OF BRITISH CALENDAR MONTH. SIMILARLY, THE CO-ORDINATE BENCH O F THE TRIBUNAL IN THE CASE OF RADHA SOAMI SATSANG BEAS VS . DCIT IN ITA NO.179/CHD/2016 VIDE ORDER DATED 11.08.2016 HAS HELD THAT FOR THE PURPOSE OF CALCULATION OF INTEREST UND ER SECTION 201(1A) THE MONTH SHOULD BE INCORPORATED IN THE ORD INARY SENSE OF THE TERM I.E. 30 DAYS OF THE PERIOD AND NOT OF T HE BRITISH CALENDAR MONTH. IN VIEW OF THE DISCUSSION HEREINAB OVE IN THE LIGHT OF RATIO LAID DOWN BY THE VARIOUS FORUMS, WE ARE OF THE VIEW THAT THE 30 DAYS IN A MONTH HAS TO BE COMPUTED BY T AKING THE ORDINARY MEANING OF THE TERM MONTH AND SHOULD BE TAKEN AS 30 DAYS AND NOT AS BRITISH CALENDAR MONTH. 8. THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 29.10.2019. SD/- SD/- ( RAM LAL NEGI) (RAJESH KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 29.10.2019. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI ITA NO.1251/M/2018 M/S. RELIANCE JIO INFOCOMM LTD. 6 THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORDER DY/ASS TT. REGISTRAR, ITAT, MUMBAI.