ACIT, CHENNAI V. M/s. Sundaram Non Conventional Energy Systems Ltd., CHENNAI

ITA 1443/CHNY/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 57800 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-01-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 10-01-2012
• Assessment Year: 2004-2005
• Appeal Filed On: 12-08-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K E B RANGAR AJAN JR
• Assessee Lawyers: R VIJAYARAGHAVAN
• Keywords: Rule of consistency; Reassessment proceedings
• Section: 143(3); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI BEFORE DR. O.K. NARAYANAN, VICE-PRESIDENT AND SHRI HARI OM MARATHA, JUDICIAL MEMBER ITA NOS.933 TO 940/MDS/2011 (ASSESSMENT YEARS: 1997-98 TO 2004-05) M/S. SUNDARAM NON-CONVENTION AL ENERGY SYSTEMS LTD., 98A, DR. RADHAKRISHNA SALAI, CHENNAI-600 004. PAN: AABCS5036L VS. ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE-VI(4), CHENNAI-600 034. (APPELLANT) (RESPONDENT) & ITA NOS.1436 TO 1443/MDS/2011 (ASSESSMENT YEARS: 1997-98 TO 2004-05) ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE-VI(4), AAYAKAR BHAVAN, 7 TH FLOOR, 121, M.G.ROAD, CHENNAI-600 034. VS. M/S. SUNDARAM NON- CONVENTIONAL ENERGY SYSTEMS LTD., 98A, DR. RADHAKRISHNA SALAI, CHENNAI-600 004. PAN: AABCS5036L (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI R.VIJA YARAGHAVAN, ADVOCATE REVENUE BY : SHRI K.E. B.RANGARAJAN, JR. STANDING COUNSEL DATE OF HEARING : 10 TH JANUARY, 2012 DATE OF PRONOUNCEMENT : 10 TH JANUARY, 2012 O R D E R PER BENCH: THIS IS A BUNCH OF 16 APPEALS 8 BY THE ASSESSEE AND 8 BY THE REVENUE PERTAINING TO ASSESSMENT YEARS 199 7-98 TO 2004-05. IT WOULD NOT ONLY BE CONVENIENT BUT ALSO SUBSERVE ITA NOS. 933 TO 940MDS/2011 & 1436 TO 1443/MDS/2011 2 THE RULE OF CONSISTENCY, IF WE DISPOSE THEM ALL O F BY A COMMON ORDER, PARTICULARLY WHEN ALMOST IDENTICAL IS SUE IS INVOLVED. THE APPEALS FILED AGAINST THE COMMON ORDE R OF COMMISSIONER OF INCOME TAX(APPEALS) DATED 28.02.201 1. 2. IN NUTSHELL, THE MOST RELEVANT FACTS LEADING TO THESE APPEALS ARE THAT THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF GENERATION OF ELECTRICITY THROUGH WINDM ILLS. THE ASSESSEE CLAIMED DEDUCTION UNDER SECTION 80IA OF T HE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS T HE ACT FOR SHORT) WHICH WAS DISALLOWED IN A REASSESSMENT PROC EEDINGS UNDERTAKEN UNDER SECTION 147 READ WITH SECTION 148 OF THE ACT. THE ASSESSEE COMPANY WAS SUCCESSFUL IN GETTIN G DESIRED RELIEF IN THE FIRST APPEAL. BUT THAT DECISI ON WAS REVERSED BY THE HONBLE ITAT VIDE ITS ORDER DATED 30.01.2009 AND THE ASSESSING OFFICERS ORDER WAS RESTORED BY W HICH AND AS A RESULT THE ASSESSEE WAS PUSHED TO SQUARE ONE A GAIN AS THE IMPUGNED CLAIM WAS DISALLOWED. CONSEQUENT UPON THE TRIBUNALS ORDER, THE ASSESSING OFFICER PASSED ORDE R GIVING EFFECT TO TRIBUNALS ORDER. TO BE MORE SPECIFIC ON FACTS, WE WILL NARRATE FACTS OF ASSESSMENT YEAR 1997-98, WHIC H IS THE ITA NOS. 933 TO 940MDS/2011 & 1436 TO 1443/MDS/2011 3 FIRST ASSESSMENT YEAR OUT OF ALL THE APPEALS BEFORE US. IN ASSESSMENT YEAR 1997-98, THE ASSESSEE COMPANY HAS S HOWN ITS TOTAL INCOME AT ` 1,82,810/- IN RETURN OF INCOME FILED ON 28.11.1997. THE ASSESSEE COMPANY HAS CLAIMED A REL IEF OF AN AMOUNT OF ` 19,70,517/- UNDER SECTION 80IA IN RESPECT OF INCOME FROM GENERATION AND DISTRIBUTION OF POWER. THIS CLAIM WAS ACCEPTED IN THE ORDER PASSED UNDER SECTION 143( 1) ON 24.02.1998. HOWEVER, LATER ON 10 TH NOVEMBER 2003, THROUGH NOTICE UNDER SECTION 148 REASSESSMENT PROCEEDINGS W ERE INITIATED AND THE REASSESSMENT WAS COMPLETED UNDER SECTION 143(3) / 147 ON 29.10.2004 WITHDRAWING THE BENEFIT UNDER SECTION 80IA. THIS ACTION OF THE ASSESSING OFFICER RESULTED IN TAX DEMAND OF ` 20,20,896/-. AGAINST THIS DEMAND, THE ASSESSEE COMPANY FILED STAY PETITION UNDER SECTION 220(6) BEFORE THE ASSESSING OFFICER. THE ASSESSEE COMPANY ALSO PREFERRED AN APPEAL BEFORE THE COMMISSIONER OF INCO ME TAX(APPEALS), AGAINST THE DENIAL OF RELIEF UNDER SE CTION 80IA. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) BY A COMMON ORDER DATED 30 TH JANUARY, 2006 PASSED FOR SIX ASSESSMENT YEARS FROM 1997-98 TO 2002-03, ALLOWED ITA NOS. 933 TO 940MDS/2011 & 1436 TO 1443/MDS/2011 4 ASSESSEES APPEALS. CONSEQUENTIALLY, THE DEMAND OF TAX GOT VACATED VIDE ORDER PASSED UNDER SECTION 150 DATED 2 7 TH FEBRUARY, 2006. BUT THE HONBLE TRIBUNAL VIDE ITS O RDER DATED 31.12.2007 REVERSED THE ORDER OF THE COMMISSIONER O F INCOME TAX(APPEALS) AND RESTORED THAT OF ASSESSING OFFICER. THEREFOR, AGAIN ORDER UNDER SECTION 150 DATED 30.01 .2009 WAS PASSED RAISING OUTSTANDING TAX DEMAND FROM ` 20,20,896 TO ` 29,84,524/-. THE GRIEVANCE OF THE ASSESSEE COMPANY IS AGAINST THIS INCREASE OF TAX DEMAND RESULTING FROM CHARGING OF INTEREST UNDER SECTION 220(2) OF THE ACT ON THE TAX DEMAND I.E. ` 20,20,896/- VIDE ORDER DATED 29.10.2004 FOR A PERI OD OF 50 MONTHS FROM DECEMBER, 2004 TO JANUARY, 2009. THE GRIEVANCE OF THE ASSESSEE IS BASED ON THE PREMISE T HAT WHEN THE TAX DEMAND GOT VACATED AS A RESULT OF ORDER DAT ED 27 TH FEBRUARY, 2006 PASSED BY THE ASSESSING OFFICER TO G IVE EFFECT TO THE ORDER OF THE COMMISSIONER OF INCOME TAX(APPE ALS) DATED 30.01.2006, NO SUCH INTEREST COULD BE CHARGED BECAUSE INTEREST UNDER SECTION 220(2) IS NOT CHARGEABLE WHE N THERE IS NEITHER EXISTING DEMAND NOR ANY DEFAULT ATTRIBUTAB LE TO ASSESSEE. THE ASSESSEE HAS NO DISPUTE REGARDING CHA RGING ITA NOS. 933 TO 940MDS/2011 & 1436 TO 1443/MDS/2011 5 OF INTEREST FROM THE DATE OF GIVING EFFECT TO TRIBU NALS ORDER (AND IF NOT PAID WITHIN DUE DATE MENTIONED IN SECTI ON 220(1) I.E. WITHIN 30 DAYS OF RECEIPT OF DEMAND AS PER ORD ER UNDER SECTION 150). FOR THIS PROPOSITION, LEARNED AUTHOR ISED REPRESENTATIVE HAS MAINLY RELIED ON THE FOLLOWING C ASE LAWS:- I) SESHASAYEE PAPER & BOARDS LTD. VS.CIT(2003) 260 ITR 419(MAD) II) VIKRANT TYRES LTD. VS. FIRST ITO (2001) 247 ITR 821(SC) III) BIRLA COTTON SPINNING & WEAVING MILLS LTD. VS. ITO (1995) 211 ITR 610(CAL). THUS, THE ASSESSEE HAS CLAIMED RELIEF OF ` 10,10,400/- IN THIS YEAR. SIMILAR IS THE POSITION IN ALL THE OTHER ASSE SSMENT YEARS. EXCEPT FOR THE AMOUNT OF TAX DEMAND AND RELIEF CLAI MED OTHER THINGS, LIKE THE FACTS, THE REASONS FOR RAISING DEM AND, STANDS OF PARTIES, ETC. ARE EXACTLY IDENTICAL. TO UNDERST AND THE EXACT FACTS AND FIGURES, WE DRAW A CHART WHICH WILL DEPIC T THE RELEVANT ASSESSMENT YEARS ALONG WITH THE DATE OF FI LING OF THE RETURN OF INCOME, TOTAL INCOME RETURNED; AMOUNT OF CLAIM MADE UNDER SECTION 80IA OF THE ACT; THE DATE OF INI TIAL ORDER ITA NOS. 933 TO 940MDS/2011 & 1436 TO 1443/MDS/2011 6 PASSED UNDER SECTION 143(1), THE DATE OF RE-ASSESSM ENT ORDER; THE AMOUNT OF DEMAND RAISED AS PER RE-ASSESS MENT ORDER; DEMAND OF TAX AND INTEREST PAYABLE AFTER DED UCTING TDS, ADVANCE TAX ETC., DATE OF ORDER BY CIT(A) IN T HE FIRST ROUND; DATE OF ORDER GIVING EFFECT TO CIT(A)S ORDE R IN FIRST ROUND, NET TAX DEMAND RAISED; DATE OF FILING OF APP EAL BEFORE HONBLE ITAT IN THE FIRST ROUND, DATE OF PASSING OR DER BY ASSESSING OFFICER GIVING EFFECT TO TRIBUNALS ORDER , CONSEQUENTIAL DETERMINATION OF TAXABLE INCOME AND T HE AMOUNT OF INTEREST LEVIED UNDER SECTION 220(2) OF T HE ACT: ASSESSMENT YEARS 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 20 03-04 2004-05 DATE OF FILING OF RETURN 28.11.97 30.11.98 31.12.99 29.11.00 31.10.01 31.10. 02 27.11.03 01.11.04 TOTAL INCOME RETURNED ` 1,82,810 1,30,950 1,10,900 67,01,530 82,87,780 1,79 ,160 1,84,760 1,76,200 CLAIM MADE U/S. 80IA OF THE ACT 19,70,517 30,69,607 77,24,358 27,93,542 34,45,142 1 ,33,16,479 98,31,047 1,35,74,084 DATE OF INITIAL ORDER PASSED U/S. 143(1) 24.02.98 26.03.01 08.03.02 14.03.02 31.01.03 21.02. 03 30.11.05 13.12.06 DATE OF RE- ASSESSMENT ORDER 29.10.04 29.10.04 29.10.04 29.10.04 29.10.04 29.10. 04 - - AMT. OF DEMAND OF TAX AS PER RE- ASSESSMENT ORDER ` 20,20,896 16,23,086 38,59,267 15,14,634 16,83,310 5 2,50,117 38,63,494 51,66,540 DATE OF ORDER OF 30.01.06 30.01.06 30.01.06 30.01.06 30.01.06 30.01. 06 25.10.07 14.12.07 ITA NOS. 933 TO 940MDS/2011 & 1436 TO 1443/MDS/2011 7 CIT(A) IN 1 ST ROUND DATE OF ORDER GIVING EFFECT TO CIT(A)S ORDER IN 1 ST ROUND 27.02.06 27.02.06 27.02.06 27.02.06 27.02.06 27.02. 06 08.01.08 14.02.08 NET DEMAND RAISED ` 80,000/- 487/- 50/- 28,228/- NIL NIL NIL NIL DATE OF ORDER OF ITAT IN 1 ST ROUND 31.12.2007 31.12.07 31.12.07 31.12.07 31.12.07 31.1 2.07 05.11.08 11.02.09 DATE OF ORDER OF ASSESSING OFFICER GIVING EFFECT TO TRIBUNALS ORDER 30.01.09 30.01.09 30.01.09 30.01.09 30.01.09 30.01. 09 24.02.09 10.06.09 CONSEQUENTIAL DETERMINATION OF TAXABLE INCOME ` 22,23,320 32,00,560 78,35,260 94,95,070 1,17,32,930 1,34,95,640 1,00,15,810 67,06,490 AMT. OF INTEREST LEVIED U/S.220(2) ` 10,10,400 8,11,500 19,29,600 7,57,300 8,45,797 26,2 5,050 14,68,092 15,49,950 3. AFTER GIVING EFFECT TO THE ORDER OF LEARNED COMM ISSIONER OF INCOME TAX (APPEALS), THE ASSESSEE WAS NOT LIABL E TO PAY ANY TAX AS PER THE LEARNED AUTHORISED REPRESENTATIV E. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) AFTER CONSIDERING THE FACTS OF THE CASE HAS HELD THAT AS ON THE DATES WHEN THE ORDERS WERE PASSED ON 30.01.2009, 24.02.20 09 AND 10.06.2009, GIVING EFFECT TO THE ORDER OF THE HONB LE ITAT, THERE BEING NO OUTSTANDING TAX LIABILITY DUE FROM T HE ASSESSE, THE ASSESSEE COULD NOT BE TREATED AS ASSESSE-IN-DE FAULT. HOWEVER FROM THE DATE OF ORDER PASSED GIVING EFFECT TO CIT(A)S ORDER DATED 27.12.2006, THE ASSESSEE HAS T O BE ITA NOS. 933 TO 940MDS/2011 & 1436 TO 1443/MDS/2011 8 TREATED AS AN ASSESSE-IN-DEFAULT, SINCE THE ASSESSE E HAS NOT PAID INTEREST UNDER SECTION 220(2) OF THE ACT. SO FOR THE PERIOD FROM THE DATE OF PASSING OF THE ORDER BY THE LEARNED CIT(A) AND UPTO THE ORDER PASSED BY THE ASSESSING OFFICER GIVEN EFFECT, THE ASSESSEE SHALL BE TREATED AS AN A SSESSE-IN- DEFAULT. HE HAS FURTHER FOUND THAT FOR THE PERIOD A FTER THE CIT(A)S ORDER DATED 27.12.2006, UNTIL THE DATE OF ORDER OF HONBLE ITAT DATED 30.01.2009, THE ASSESSEE IS NOT LIABLE TO PAY INTEREST, BEING THE ASSESSE-IN-DEFAULT. ACCORDI NGLY BOTH THE PARTIES HAVE AGGRIEVED AND HAVE FILED THEIR RES PECTIVE APPEALS. 4. AFTER HEARING BOTH SIDES, WE HAVE FOUND THAT ON THIS TICKLISH ISSUE, THERE ARE DECISIONS IN THE CASES OF SESHASAYEE PAPER & BOARDS LTD. VS.CIT(2003) 260 ITR 419(MAD); BIRLA COTTON SPINNING & WEAVING MILLS LT D. VS. ITO (1995) 211 ITR 610(CAL) AND VIKRANT TYRES LTD. VS. FIRST ITO (2001) 247 ITR 821(SC) AS WELL AS THE LATEST DECIS ION OF HONBLE DELHI HIGH COURT IN THE CASE OF GIRNAR INVE STMENT LTD. VS. CIT IN W.P(C) NO.5750/2010 DATED 5 TH JANUARY, 2012 . IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE, W E FEEL THAT ITA NOS. 933 TO 940MDS/2011 & 1436 TO 1443/MDS/2011 9 THIS ISSUE NEEDS TO BE REMANDED BACK TO THE CIT(A) SO THAT HE CAN ALSO CONSIDER THE DECISION OF GIRNAR INVESTM ENT LTD (SUPRA) RECENTLY RENDERED BY THE DELHI HIGH COURT AND ALSO OTHER DECISIONS ON WHICH HE HAS RELIED AND HAS TO P ASS A SPEAKING ORDER AS TO WHICH DECISION ACTUALLY APPLIC ABLE TO THE FACTS OF THE CASE AND WHY. ACCORDINGLY, ON THIS ISS UE HE HAS TO PASS A REASONED ORDER WHICH SPEAKS ABOUT THE APP LICATION OF THE CASE LAWS MENTIONED ABOVE. ACCORDINGLY, WE A LLOW ALL THE APPEALS BOTH OF ASSESSEE AS WELL AS REVENUE FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ON 10 TH JANUARY, 2012 AT CHENNAI. SD/- SD/- (DR. O.K.NARAYANAN) (HARI OM MARATHA) VICE PRESIDENT JUDICIAL MEMBER CHENNAI, DATED THE 10 TH JANUARY, 2012. SOMU COPY TO: (1) APPELLANT ( 4) CIT(A) (2) RESPONDENT (5) D.R. (3) CIT (6) G.F.