Dy. Commissioner of Income-tax, Satara V. The United Western Bank Ltd., Satara

ITA 1436/PUN/2007

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 56601 (ITAT-PUNE)
• Duration Of Justice: 4 year(s) 1 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-12-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 07-12-2011
• Assessment Year: 1996-1997
• Appeal Filed On: 06-11-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MEETHALI MADHUSMI THA
• Section: 143(3); 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI I C SUDHIR, JUDICIAL MEMBER AND SHRI G.S. PANNU, ACCOUNTANT MEMBER ITA NO 1436/PN/07 (ASSTT. YEAR: 1996-97) DY. COMMISSIONER OF INCOME-TAX, .. APPELLANT CIR.3, PUNE VS. THE UNITED WESTERN BANK LTD., .. RESPONDENT 172/4 RAVIWAR PETH, SATARA PAN AABCT0177D APPELLANT BY: SMT MEETHALI MADHUSMI THA RESPONDENT BY: SHRI C H NANIWADEKAR DATE OF HEARING : 07.12.2011 DATE OF PRONOUNCEMENT : 08.12.2011 ORDER PER G.S. PANNU, AM THIS APPEAL BY THE REVENUE ARISES OUT OF THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-II, PUNE DATED 10.07.2007 WHICH, IN TURN, HAS ARISEN FROM AN ORDER DATED 16.1 .2007 PASSED BY THE ASSESSING OFFICER UNDER SECTION 154 OF THE INCOME-T AX ACT, 1961 (IN SHORT THE ACT) PERTAINING TO THE ASSESSMENT YEAR 1996-97. 2. THIS APPEAL WAS EARLIER DISMISSED BY THE TRIBUNA L VIDE ITS ORDER DATED 17.9.12009 FOR WANT OF CLEARANCE FROM THE COM MITTEE ON DISPUTES. SUBSEQUENTLY, THE HONBLE BOMBAY HIGH COU RT VIDE ITS ORDER IN INCOME-TAX APPEAL NO. 2634 OF 2010 DATED 12.7.20 11 HAS SET ASIDE THE ORDER OF THE TRIBUNAL AND HAS HELD THAT THE CLE ARANCE FROM THE COD IS NOT MANDATORY, FOLLOWING THE JUDGMENT OF THE HON BLE APEX COURT IN THE CASE OF ELECTRONICS CORPORATION OF INDIA LTD. V . UNION OF INDIA 51 DTR 193. AS A RESULT, THEREOF, THE CAPTIONED PROCEE DINGS HAVE BEEN LISTED FOR HEARING. 2 3. ALTHOUGH REVENUE HAS RAISED MULTIPLE GROUNDS OF APPEAL, BUT ESSENTIALLY THE GRIEVANCE OF THE REVENUE IS AGAINST THE ACTION OF THE COMMISSIONER OF INCOME-TAX (APPEALS) IN DELETING TH E INTEREST OF RS 27,56,821/- LEVIED ON THE ASSESSEE FOLLOWING THE PR OVISIONS OF SECTION 234D OF THE ACT. 4. IN BRIEF, THE FACTUAL BACKGROUND GIVING RISE TO THE IMPUGNED DISPUTE CAN BE SUMMARIZED AS FOLLOWS. BY A LETTER D ATED 18.12.2006, IT WAS POINTED OUT BY THE ASSESSEE THAT A REFUND F RS 6,78,32,796/- WAS RECEIVED BY IT ON 1.4.2006 IN CONSEQUENCE OF THE OR DER OF THE TRIBUNAL, PUNE BENCH, IN ITA NO 205/PN/99 DATED 20.4.2005. TH E ASSESSEE NOTICED A MISTAKE IN THE ABOVE REFUND INSOFAR AS TH E REFUND WAS GRANTED BY THE ASSESSING OFFICER AS IF THE RELIEF W AS GIVEN BY THE TRIBUNAL IN RESPECT OF THE ADDITIONS MADE UNDER SEC TION 143(3) OF THE ACT WHILE IN FACT THE DECISION OF THE TRIBUNAL WAS TO THE EFFECT OF REDUCTION/WITHDRAWAL OF ADDITIONAL TAX LEVIED UNDER SECTION 143(1A) OF THE ACT. ACCORDING TO THE ASSESSEE, AS THE ISSUE BE FORE THE TRIBUNAL WAS REGARDING THE SCOPE OF SECTION 143(1A), THE ORD ER GIVING EFFECT TO THE ORDER OF THE TRIBUNAL PASSED BY THE ASSESSING O FFICER WAS INCORRECT. THE ASSESSING OFFICER DISCUSSED THE ENTI RE HISTORY OF THE CASE IN THE ORDER UNDER SECTION 154 OF THE ACT AND CAME TO A CONCLUSION THAT THERE WAS A MISTAKE APPARENT FROM R ECORD INSOFAR AS THE REFUND OF RS 6,78,32,796/- WAS INCORRECTLY GIVE N. THE ASSESSING OFFICER, THEREFORE, PROCEEDED TO RECTIFY THE MISTAK E, BUT AT THE SAME TIME, CHARGED THE ASSESSEE WITH INTEREST OF RS 27,5 6,821/- UNDER SECTION 234D OF THE ACT FROM 1.4.2006 TO 18.12.2006 , I.E. TILL THE DATE OF PASSING THE ORDER UNDER SECTION 154 OF THE ACT. SUB SEQUENTLY, THE ASSESSEE MOVED AN APPLICATION DATED 5.1.2006 AGAINS T THE ORDER UNDER SECTION 154 PASSED BY THE ASSESSING OFFICER STATING THAT INTEREST UNDER SECTION 234D LEVIED BY THE ASSESSING OFFICER WAS NO T TENABLE. THE 3 ASSESSING OFFICER, HOWEVER, REJECTED THE SAID APPLI CATION. AGAINST THE SAME, ASSESSEE WENT IN APPEAL BEFORE THE COMMISSION ER OF INCOME-TAX (APPEALS), WHO DIRECTED DELETION OF THE INTEREST UN DER SECTION 234D OF THE ACT LEVIED BY THE ASSESSING OFFICER. AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS), REVENUE IS IN APPEAL BEFORE US. 5. BEFORE US, THE LEARNED REPRESENTATIVE FOR THE RE SPONDENT ADVERTED TO A PRELIMINARY ISSUE RELATING TO THE APP LICABILITY OF SECTION 234D FOR THE INSTANT ASSESSMENT YEAR AND SUBMITTED THAT THE SAME HAS BEEN ADJUDICATED IN FAVOUR OF THE ASSESSEE BY THE H ONBLE DELHI HIGH COURT IN THE CASE OF DIRECTOR OF INCOME-TAX V. JACA BS CIVIL INCORPORATED 330 ITR 578 (DEL). IT IS SOUGHT TO BE MADE OUT THAT APART FROM OTHER GROUNDS, ONE OF THE REASONS FOR DELETION BY THE COM MISSIONER OF INCOME-TAX (APPEALS) OF THE INTEREST CHARGED BY THE ASSESSING OFFICER UNDER SECTION 234D IS THE PROPOSITION THAT THE PROV ISIONS OF SECTION 234D WERE NOT APPLICABLE FOR THE INSTANT ASSESSMENT YEAR, AND THE SAME HAS BEEN SINCE UPHELD BY THE HONBLE DELHI HIG H COURT IN THE CASE OF JACABS CIVIL INCORPORATED (SUPRA). ON THIS PROPOSITION, THE LEARNED CIT-DEPARTMENTAL REPRESENTATIVE, APPEARING FOR THE REVENUE, HAS NOT BROUGHT ANY CONTRARY DECISION TO OUR NOTICE , ALTHOUGH ON OTHER ASPECTS OF THE MATTER THE ACTION OF THE ASSESSING O FFICER IS SOUGHT TO BE DEFENDED. 6. HAVING HEARD THE RIVAL SUBMISSIONS ON THE SHORT POINT RELATING TO THE APPLICABILITY OF SECTION 234D OF THE ACT IN THE INSTANT ASSESSMENT YEAR, WE PROCEED TO DISPOSE OF THE APPEAL AS FOLLOW S. SECTION 234D OF THE ACT PROVIDES FOR CHARGING OF INTEREST ON EXCESS REFUND GRANTED TO THE ASSESSEE. SECTION 234D HAS BEEN INSERTED BY THE FINANCE ACT, 2003 WITH EFFECT FROM 1.6.2003. CONSEQUENTLY, IT IS MADE OUT BY THE 4 ASSESSEE THAT THE SAME IS APPLICABLE ONLY FROM THE ASSESSMENT YEAR 2004-05 ONWARDS AND NOT IN THE EARLIER ASSESSMENT Y EARS AND, THEREFORE, NO INTEREST UNDER SECTION 234D COULD BE LEVIED FOR THE INSTANT ASSESSMENT YEAR. THE ASSESSMENT YEAR BEFORE US IS 1996-97, WHICH IS PRIOR TO THE ASSESSMENT YEAR 2004-05. THE HONBLE DELHI HIGH COURT IN THE CASE OF JACABS CIVIL INCORPORATED (SUP RA) HAS AFFIRMED THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL IN TH E CASE OF ITO V. EKTA PROMOTERS PVT. LTD. 305 ITR (AT) 1 (DEL) TO THE EF FECT THAT SECTION 234D OF THE ACT WAS APPLICABLE ONLY FROM THE ASSESS MENT YEAR 2004-05 ONWARDS AND NOT IN THE EARLIER ASSESSMENT YEARS AND , AS A RESULT THEREOF, WE ARE INCLINED TO AFFIRM THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS) HOLDING THAT IN THE PRESENT CA SE NO INTEREST UNDER SECTION 234D COULD BE LEVIED FOR THE INSTANT ASSESS MENT YEAR. CONSEQUENTLY, THE ORDER OF THE COMMISSIONER OF INCO ME-TAX (APPEALS) IS AFFIRMED ON THIS LIMITED ASPECT WITHOUT GOING IN TO MERIT OF OTHER POINTS MADE OUT BY THE COMMISSIONER OF INCOME-TAX ( APPEALS). 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. DECISION PRONOUNCED IN THE OPEN COURT ON THE 8 TH DAY OF DECEMBER, 2011. SD/- SD/- (I C SUDHIR) (G .S. PANNU) JUDICIAL MEMBER ACCOUNTANT MEM BER PUNE, DATED: 8 TH DECEMBER, 2011 B COPY TO:- 1) APPELLANT 2) RESPONDENT 3) THE CIT (A)-II, PUNE 4) CIT-II, PUNE 5) DR, B BENCH, ITAT, PUNE. 6) GUARD FILE TRUE COPY BY ORDER SR. PS, I.T.A.T., PUNE 5