SHRENIK KUMAR N BALDOTA, MUMBAI V. ASST CIT CEN CIR 2(1), Bangalore

ITA 1282/MUM/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 2921 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 6 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-09-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2007-2008
• Appeal Filed On: 26-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJNISH K ARVIND
• Keywords: Rectification of order; Revised return
• Section: 143(3); 153A; 234B; 131; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI E BENCH , MUMBAI BEFORE SHRI SHAILEND RA K UMAR YADAV, JUDICIAL MEMBER, AND SHRI RAJESH KUMAR , ACCOUNTANT MEMBER . ITA. NO. 1282 / M UM /20 1 4 (ASSESSMENT YEAR: 2 0 0 7 - 0 8 ) SHRENIK KUMAR N BALDOTA APPELLANT 194 NARENDRA BHAVNA, STATION ROAD WADALA , MUMBAI . VS. A CIT , CIRCLE - 2 (1) RESPONDENT BANGALORE PAN: AABPB 4468N / BY APPELLANT : SHRI SATISH MODY , A.R. / BY RESPONDENT : SHRI RAJNISH K. ARVIND , D.R. / DATE OF HEARING : 18 . 0 8 .201 6 / DATE OF PRONOUNCEMENT : 14. 0 9 .201 6 ORDER PER RAJESH KUMAR , A . M: THE COMMON ISSUE RAISED IN THE GROUNDS OF APPEAL IS WITH RESPECT TO UPHOLDING AND CONFIRMING THE CHARGING OF INTEREST U/S.234B(2) TILL THE DATE OF FILING OF REVISED RETURN OF INCOME AND NOT TILL THE DATE OF PAYMENT OF TAX BY CONFIRMING TH E VALIDITY OF ORDER PASSED U/S 154 OF THE ACT BY THE AO . I T A NO . 1282 / M UM / 1 4 A.Y. 200 7 - 0 8 [ SHRENIK KUMAR N. BALDOLA VS. ACIT ] PAGE 2 2 . THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSMENT WAS COMPLETED U/S.143(3) R.W.S. 153A OF THE ACT ON 31.12.2009. A SEARCH U/S.132 WAS CONDUCTED IN THE PREMISES OF THE ASSESSEE ON 26.10.2007. DU RING THE COURSE OF SEARCH OPERATION VARIOUS DOCUMENTS AND ACCOUNTS WERE SEIZED AND ACCORDINGLY NOTICE U/S.153A OF THE INCOME TAX ACT WAS ISSUED WHICH WAS COMPLIED WITH BY THE ASSESSEE BY SUBMITTING THAT THE REVISED RETURN MAY BE TREATED AS COMPLIANCE TO TH E SAID NOTICE WHEREIN THE ASSESSEE HAD DECLARED A TOTAL INCOME OF RS.7,36,80,646/ - . THE SAID INCOME WAS INCLUSIVE OF AMOUNT OFFERED DURING THE SEARCH OF RS.6 CRORE AND ALSO PAID TAX THEREON BY GIVING A DEMAND DRAFT OF RS.2 CRORE OVER TO THE INCOME TAX DEPARTMENT. T HE ASSESSING OFFICER ALLOW ED THE CREDIT OF RS.2 CRORE PAID WHILE MAKING THE ASSESSMENT U/S.143(3) R.W.S.153A OF THE ACT VIDE ORDER DATED 31.12.2009 . THEREAFTER, A RECTIFICATION ORDER U/S.154 OF THE ACT WAS PASSED ON 18.01.2010 WITHDRAWI NG THE CREDIT OF TAX PAID OF RS. 2.00 CRORES AND ALSO THE INTEREST U/S 234B OF THE ACT WAS RECOMPUTED ACCORDINGLY. 3. AGGRIEVED BY THE ORDER OF ASSESSING OFFICER, THE ASSESSEE PREFERRED APPEAL BEFORE CIT(A) WHO DIRECTED THE ASSESSING OFFICER TO CHARGE IN TEREST U/S.234B TILL THE DATE OF FILING OF THE REVISED RETURN AND NOT TILL THE DATE OF PAYMENT OF TAX BY OBSERVING AS UNDER: 6. THE FACTS OF THE CASE AND THE CONTENTIONS OF THE APPELLANT ARE CAREFULLY EXAMINED. IT IS SEEN THAT THE APPELLANT HAD OFFERED UND ISCLOSED INCOME OF RS.6 CRORES, I T A NO . 1282 / M UM / 1 4 A.Y. 200 7 - 0 8 [ SHRENIK KUMAR N. BALDOLA VS. ACIT ] PAGE 3 DURING THE PROCEEDINGS U/S . 131 OF THE ACT, FOR THE A.Y.2007 - 08 ON 8 TH FEBRUARY, 2008 AND ALSO DEPOSITED A DD FOR AN AMOUNT OF RS.2 CR OR ES WITH THE INCOME - TAX DEPARTMENT. THIS ACTION ON THE PART OF THE APPELLANT APPEARS TO B E VOLUNTARY IN NATURE. HOWEVER, THE APPELLANT HAS NOT FILED THE REVISED RETURN OF INCOME IMMEDIATELY. IT IS SEEN FROM THE RECORDS THAT THE REVISED RETURN OF INCOME WAS FILED AS LATE AS ON 9 TH SEPTEMBER, 2008 IN RESPECT OF THE A.Y. 2007 - 08. THERE WAS NO TAX LIABILITY OUTSTANDING AGAINST THE APPELLANT FOR THE A.Y. 2007 - 08 AS ON 8 TH FEBRUARY, 2008, THE DATE ON WHICH A DD FOR RS.2 CRORES WAS HANDED OVER TO THE DEPARTMENT. THE SAID AMOUNT OF RS.2 CRORES WAS DEPOSITED IN THE PERSONAL DEPOSIT ACCOUNT (PD A/C) OF T HE JURISDICTIONAL COMMISSIONER OF INCOME - TAX, WHICH IS THE NORMAL PROCEDURE FOLLOWED BY THE DEPARTMENT. IN THE ABSENCE OF ANY CRYSTALIZED OUTSTANDING TAX LIABILITY IN RESPECT OF A.Y. 2007 - 08, THE SUM OF RS.2 CRORES DEPOSITED BY WAY OF DEMAND DRAFT COULD NO T HAVE BEEN SET OFF IMMEDIATELY. AS NOTED ABOVE, THE REVISED RETURN OF INCOME WAS NOT FILED BY THE APPELLANT IMMEDIATELY AND THE SAME WAS FILED ONLY ON 9 TH SEPTEMBER, 2008. A MERE STATEMENT GIVEN BY THE APPELLANT U/S . 1 31 OF THE ACT AND DEPOSITING OF CERTA IN SUM WITH THE DEPARTMENT, DO NOT AMOUNT TO COMPLYING WITH THE PROVISIONS OF THE INCOME - TAX ACT FOR THE PURPOSE OF ARRIVING AT THE TAX LIABILITY FOR THE A.Y. 2007 - 08. THERE WAS NO ADVANCE TAX LIABILITY, SINCE THE RELEVANT PREVIOUS YEAR I.E., F.Y. 2006 - 07 HAD ELAPSED LONG BACK. IN THIS CONTEXT, IT IS PERTINENT TO OBSERVE THAT DETERMINATION OF TAX LIABILITY/ ADDITIONAL TAX LIABILITY UNDER THE INCOME - TAX ACT HAS TO BE BASED ON EITHER THE RETURN OF INCOME FILED (INCLUDING A REVISED RETURN OF INCOME) OR / AND ON COMPLETION OF ASSESSMENT (INCLUDING REASSESSMENT) U/S 143(3) OF THE INCOME - TAX ACT. IN THIS CASE, THE EARLIEST POINT OF TIME THE ADDITIONAL TAX LIABILITY WAS CRYSTALIZED FOR THE A. Y. 2007 - 08 WAS THE DATE OF FILING OF THE REVISED RETURN OF INCOME, WHICH W AS 9 TH SEPTEMBER, 2008. IN THE ABSENCE OF ANY SUCH CRYSTALIZED TAX LIABILITY, INCOME - TAX DEPARTMENT HAD NO AUTHORITY TO SET OFF THE DEPOSIT OF RS.2 CRORES AGAINST THE TAX LIABILITY OF THE APPELLANT IN RESPECT OF A.Y. 2007 - 08. BASED ON THE REQUEST OF THE AP PELLANT, EITHER MADE EARLIER TO THE DATE OF FILING OF RETURN OF INCOME OR WHILE FILING THE REVISED RETURN OF INCOME. AO WAS DU T Y BOUND TO GIVE CREDIT TO THE DEPOSIT OF RS.2 CRORES IN TERMS OF SELF - ASSESSMENT TAX U/S 140A OF THE ACT. ACCORDINGLY, THE A.O. I S HEREBY DIRECTED TO GIVE CREDIT TO THE SUM OF RS.2 CRORES AS SELF - ASSESSMENT TAX PAID ON THE DATE OF F ILING OF THE RETURN OF INCOME. I T A NO . 1282 / M UM / 1 4 A.Y. 200 7 - 0 8 [ SHRENIK KUMAR N. BALDOLA VS. ACIT ] PAGE 4 7. THE OTHER CONTENTION OF THE APPELLANT THAT A.O. HAS NOT GIVEN ADEQUATE OPPORTUNITY WHILE CARRYING OUT THE RECTIFICATION U/S . 154 OF THE ACT IS EXAMINED. IT IS SEEN FROM THE RECTIFICATION ORDER THAT APPELLANT HAD BY HIS LETTER DATED 12.01.2010 HAD POINTED OUT CERTAIN MISTAKES IN CALCULATION OF TAXES. WHILE EXAMINING THE ISSUES RAISED BY THE APPELLANT, A.O. HAS ALSO CARRIED O UT THE RECTIFICATION AND HAS WITHDRAWN THE CREDIT FOR RS.2 CRORES. DURING THE APPELLATE PROCEEDINGS, THE APPELLANT HAS BEEN GIVEN ADEQUATE OPPORTUNITIES TO EXPLAIN ITS STAND. SINCE A.O. HAS CARRIED OUT THE TAX CALCULATIONS, WHICH ARE IN THE NATURE OF MISTA KES APPARENT FROM RECORD AND SUCH RECTIFICATION HAS BEEN CARRIED OUT, WHILE EXAMINING THE MISTAKES POINTED OUT BY THE APPELLANT HIMSELF, IT IS HEREBY HELD THAT THE RECTIFICATION ORDER PASSED UNDER SECTION 154 OF THE ACT IS A VALID ORDER. FURTHER, I HAVE NO T AGREED WITH THE A.O. AS REGARDS THE DATE UPTO WHICH INTEREST U/S 234B OF THE ACT HAS TO BE LEVIED. WHILE THE A.O. HAS LEVIED INTEREST U/S 234B OF THE ACT UPTO 31.12.2009, WHICH IS THE DATE OF ASSESSMENT ORDER PASSED U/S 143(3) R.W.S. 153 A OF THE ACT, I HAVE DIRECTED THE A.O. TO G IVE CREDIT TO THE DEPOSIT OF RS.2 CRORES AS SELF AS SESSMENT TAX PAID ON THE DATE OF FILING OF THE RETURN OF INCOME. SINCE THE BASIC GRIEVANCE OF THE APPELLANT IS FULLY ADDRESSED AND RESOLVED IN HIS FAVOUR, THIS GROUND OF APPEAL I S DISMISSED AS INFRUCTUOUS. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT THE ASSESSEE HAS BEEN DENIED THE CREDIT OF TAX PAID AMOUNTING TO RS.2 CRORE WHILE PASSING THE RECTIFICATION ORDER U/S.154 OF THE ACT ON 18 .01 . 2010 AND ALSO CHARGED INTEREST U/S 234B ACCORDINGLY. THE CIT(A) DURING THE APPELLATE PROCEEDINGS BEFORE HIM DIRECTED THE AO TO CHARGE INTEREST U/S.234B TILL THE FILING OF THE REVISED RETURN OF INCOME . LEARNED AR VEHEMENTLY SUBMITTED BEFORE US THAT NO I NTEREST U/S.234B COULD BE CHARGED AND LEVIED AFTER THE DATE OF PAYMENT I.E INTEREST U/S 234B COULD ONLY BE CHARGED UPTO THE DATE OF PAYMENT OF TAX OF RS.2 CRORE S AND NOT THEREAFTER . WE , AFTER CLOSELY PERUSING THE PROVISIONS OF SECTION 234B OF THE I T A NO . 1282 / M UM / 1 4 A.Y. 200 7 - 0 8 [ SHRENIK KUMAR N. BALDOLA VS. ACIT ] PAGE 5 ACT, FIN D THAT THERE IS A MERIT IN THE ARGUMENT S OF LEARNED AR THAT INTEREST CAN ONLY BE CHARGED TILL THE DATE OF PAYMENT AND NOT TILL THE DATE OF FILING OF REVISED RETURN AS HAS BEEN HELD AND DIRECTED BY LD. CIT(A) . WE ARE NOT IN AGREEMENT WITH REASONING OF CI T(A) THAT INTEREST SHOULD BE CHARGED TILL THE DATE OF FILING REVISED RETURN WHEN THE ASSESSEE HAS PAID THE TAX PRIOR TO FILING THE REVISED RETURN OF INCOME TAX. W E , THEREFORE , SET ASIDE THE ORDER OF CIT(A) AND DIRECT THE AO TO CHARGE INTEREST U/S 234B ONL Y TILL THE DATE OF PAYMENT AND NOT THERE AFTER . SINCE THE ISSUE OF CHARGING INTEREST U/S 234B OF THE ACT HA S BEEN DECIDED IN FAVOUR OF THE ASSESSEE ,THE ISSUE RAISED IN THE GROUND NO 1 IS RENDERED ACADEMIC. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON THIS THE 14TH DAY OF SEPTEMBER , 201 6 . SD SD (SHAILENDRA KUMAR YADAV) ( RAJESH KUMAR ) JUDICIAL MEMBER ACCOUNTANT MEMBE R MUMBAI : DATED 14 /0 9 /201 6 PRABHAT KESARWANI / COPY OF ORDER FORWARDED TO: - 1 . / REVENUE 2 . / ASSESSEE 3 . / CONCERNED CIT 4. - / CIT (A) 5 . , , / DR, ITAT, MUMBAI 6 . / GUARD FILE. BY ORDER / , TRUE COPY / , ,