PIRAMAL ENTERPRISES LIMITED, MUMBAI V. DCIT, CPC, Bangalore

ITA 1293/MUM/2023

AI Insights

Piramal Enterprises Ltd. appealed against the order of the Commissioner of Income Tax (Appeals), which dismissed their appeal regarding the levy of interest under section 234C of the Income Tax Act, 1961. The interest was levied following the processing of the assessee's revised return, which declared a higher income due to long-term capital gains from the sale of shares. The Tribunal examined the timing of the advance tax payment and found that the assessee had complied with the tax payment schedule, thus rendering the interest levy under section 234C inappropriate.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 125491 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-07-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 04-07-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 16-04-2023
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Rectification of order; Capital Gains
• Section: 2; 115JB; 143(1); 250

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, MUMBAI BEFORE SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER AND SHRI SANDEEP SINGH KARHAIL, JUDICIAL MEMBER ITA no.1293/Mum./2023 (Assessment Year : 2017–18) Piramal Enterprises Ltd. Piramal Ananta, Agastya Corporate Park Kamani Junction, LBS Marg, Kurla West Mumbai 400 070 PAN – AAACN4538P ................ Appellant v/s Dy. Commissioner of Income Tax Central Processing Centre Bengaluru 500 560 ................ Respondent Assessee by : Shri Ronak Doshi a/w Shri Priyank Gandhi Revenue by : Shri Ashok Kumar Ambartha Date of Hearing – 05/07/2023 Date of Order – 19/07/2023 O R D E R PER SANDEEP SINGH KARHAIL, J.M. The present appeal has been filed by the assessee challenging the impugned order dated 23/02/2023, passed under section 250 of the Income Tax Act, 1961 ("the Act") by the learned Commissioner of Income Tax (Appeals), Delhi, National Faceless Appeal Centre, [“learned CIT(A)”], for the assessment year 2017–18. 2. In its appeal, the assessee has raised the following grounds:– “1. On the facts and in circumstances of the case and in law, the Ld. CIT(A) erred in dismissing the Appellant’s Appeal against levy of Interest under Piramal Enterprises Ltd. ITA no.1293/Mum./2023 Page | 2 Section 234C of the Act. By stating that the effective remedy in this case is to file an application u’s 154 for rectification of mistake. 2. The Id. CIT(A), inter–alia, erred in holding that: i. The effective remedy in the instant case is to file an application u/s 154 for rectification of mistake. ii. The appeal is not maintainable and liable to be dismissed as there is no adjustment to income made u/s 143(1). 3. The ld. CIT(A) failed to appreciate and ought to have held that: i. No interest u/s 234C of the Act is leviable in the Appellant's case in view of clause (a) to the First Proviso of Section 234C(1) of the Act, as the Appellant had sold shares only in the month of March 2017 (ie in last quarter of the Assessment Year 2017-18). ii. Without Prejudice, no adjustment beyond those as specified in section 143(1) of the Act can be made in the intimation order under Section 143(1) of the Act. 4. Thus, the Appellant prays that the interest levied under Section 234C of the Act be deleted. GENERAL The Appellant craves leaves to add to, alter and/or amend any of the above grounds of appeal on or before the date of hearing.” 3. The only dispute raised by the assessee is against the levy of interest under section 234C of the Act. 4. The brief facts of the case pertaining to this issue, as emanating from the record, are that the assessee is a non-banking financial company. For the year under consideration, the assessee originally filed its return of income on 30/10/2017 declaring a total income of Rs.45,55,02,970. Subsequently, the return of income was revised and ultimately total income of Rs.45,57,14,293 was declared under the normal provisions of the Act and Rs.49,89,29,337 under section 115JB of the Act. Since the tax payable under the MAT was higher than the normal provisions of the Act, the tax liability was discharged Piramal Enterprises Ltd. ITA no.1293/Mum./2023 Page | 3 under the MAT provisions by way of advance tax, and a refund was determined amounting to Rs.10,21,755. The said revised return was processed vide intimation dated 12/04/2009 issued under section 143(1) of the Act, whereby the entire income declared by the assessee was accepted, however, the AO levied interest amounting to Rs.43,12,368 under section 234C of the Act, which resulted in demand of Rs.32,90,613 as against the refund of Rs.10,11,760 claim by the assessee. 5. The learned CIT(A), vide impugned order, dismissed the appeal filed by the assessee on the basis that there is no adjustment to income made under section 143(1) of the Act and the only grievance of the assessee is regarding erroneous levy of interest under section 234C of the Act. The learned CIT(A) further held that an effective remedy in this regard is under section 154 of the Act for rectification of the mistake. Being aggrieved, the assessee is in appeal before us. 6. We have considered the submissions of both sides and perused the material available on record. From the perusal of the revised computation of income, forming part of the paper book, we find that during the year the assessee earned long-term capital gain of Rs.46,10,10,711 on the sale of shares. From Schedule 1 to revised competition of income, we find that the assessee sold the shares on 01/03/2017 and in this regard also paid advance tax of Rs.10,75,00,000 on 15/03/2017, as is evident from the challan of payment of advance tax on page 61 of the paper book. Therefore, from the above, it is evident that the tax payable by the assessee on the long-term capital gains earned from the sale of shares on 01/03/2017, i.e. at the rate of Piramal Enterprises Ltd. ITA no.1293/Mum./2023 Page | 4 20%, was duly paid by the assessee on the next due date of advance tax, which in the facts and circumstances of the present case was 15/03/2017. Thus, we are of the considered view that in terms of the 1 st proviso to section 234C(1) of the Act, interest under section 234C of the Act was wrongly levied vide intimation issued under section 143(1) of the Act. Accordingly, we direct the AO to delete the interest levied under section 234C of the Act. As a result, ground no.3(i) raised in assessee’s appeal is allowed. 7. In view of our aforesaid findings, other issues raised in assessee’s appeal are rendered academic and therefore, are left open. 8. In the result, the appeal by the assessee is allowed. Order pronounced in the open Court on 19/07/2023 Sd/- PRASHANT MAHARISHI ACCOUNTANT MEMBER Sd/- SANDEEP SINGH KARHAIL JUDICIAL MEMBER MUMBAI, DATED: 19/07/2023 Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); (4) The DR, ITAT, Mumbai; and (5) Guard file. True Copy By Order Pradeep J. Chowdhury Sr. Private Secretary Assistant Registrar ITAT, Mumbai