ACIT, Bangalore V. M/s. ING Vysya Bank Ltd., Bangalore

ITA 1533/BANG/2012

• Counselvise Citation: 153321114 RSA 2012
• Duration Of Justice: 3 year(s) 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-01-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 20-01-2015
• Assessment Year: misc
• Appeal Filed On: 20-11-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: LALITA RAMESWARAN
• Assessee Lawyers: P DHIVAHAR JT
• Keywords: Rectification of order
• Section: 143(3); 244A; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, JUDICIAL MEMBER AND SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER ITA NO.1533/BANG/2012 ASSESSMENT YEAR : 1991-92 THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 11(4), BANGALORE. VS. M/S. ING VYSYA BANK LTD., NO.22, M.G. ROAD, BANGALORE 560 001. PAN : AABCT 0529M APPELLANT RESPONDENT APPELLANT BY : SHRI P. DHIVAHAR, JT. CIT(DR) RESPONDENT BY : SMT. LALITA RAMESWARAN, C.A. DATE OF HEARING : 20.01.2015 DATE OF PRONOUNCEMENT : 28.01.2015 O R D E R PER N.V. VASUDEVAN, JUDICIAL MEMBER THIS APPEAL BY THE REVENUE IS AGAINST THE ORDER DATED 17.8.2002 OF THE CIT(APPEALS)-I, BANGALORE RELATING TO ASSESSMEN T YEAR 1991-92. 2. THE ASSESSEE IS A SCHEDULED BANK AND CARRIES ON BANKING BUSINESS. RETURN OF INCOME FOR THE A.Y. 1991-92 WA S FILED BY THE ASSESSEE ON 27.12.1991 ADMITTING A TAXABLE INCOME OF RS.10,0 1,37,310 AND A TAX LIABILITY THEREON OF RS. 4,60,63,163. A SUM OF RS. 7,27,42,407/- WAS CLAIMED AS TAX DEDUCTED AT SOURCE. THE RELEVANT TDS CERTIFI CATES WERE ALSO ITA NO. 1533/BANG/2012 PAGE 2 OF 7 ATTACHED TO THE RETURN. AN INTIMATION U/S 143(1) OF THE INCOME-TAX ACT DATED 10.01.1992 WAS ISSUED WHEREIN IT WAS MENTIONED THAT CREDIT FOR TDS AMOUNTING TO RS. 1,68,25,188 WAS NOT BEEN GIVEN AS THE CERTIFICATES WERE DEFECTIVE SUCH AS NOT PERTAINING TO THE ASSESSMENT YEAR UNDER CONSIDERATION, NO SEAL ON THE CERTIFICATE BY THE IS SUING AUTHORITY, DATE OF REMITTANCE TO GOVERNMENT ACCOUNT, EXEMPTION CERTIFI CATE, ETC. HENCE CREDIT FOR TDS WAS GIVEN TO THE EXTENT OF RS.5,59,17,219 O NLY BASED ON WHICH A REFUND OF RS.98,54,056 WAS WORKED OUT. THE INTEREST PAYABLE ON THIS WAS SHOWN AS RS.12,81,020. AN AMOUNT OF RS.60,99,535 WA S ADJUSTED FOR SOME EARLIER YEARS AND A REFUND ORDER DATED 12.03.1 992 FOR THE BALANCE AMOUNT OF RS.50,35,541 WAS ISSUED. 3. THE ASSESSEE HAD BY LETTER DATED 18.03.1992 REQU ESTED FOR THE RETURN OF TDS CERTIFICATES FOR WHICH CREDIT HAD NOT BEEN GIVEN TO ENABLE IT TO REMOVE THE DEFECTS AND RESUBMISSION AND OBTAINED TH EIR RETURN. THE RETURNED TDS CERTIFICATES INCLUDED THOSE ISSUED BY RBI AMOUNTING TO RS.1,20,50,430. RBI WAS EXEMPTED BY CBDT FROM FILLI NG UP COLUMNS 4 & 5 RELATING TO THE DATE OF REMITTANCE TO THE GOVERNME NT ACCOUNT, BANK BRANCH WHERE THE TAX IS DEPOSITED. ANOTHER THIRTY ONE CER TIFICATES (RS. 12,49,500) WERE ISSUED BY APSEB, APSFC & VYSYA BANK LEASING LI MITED WHO HAD OBTAINED EXEMPTION FROM USING THE PRINTED FORM. THE SE FACTS WERE REPRESENTED TO THE ASSESSING OFFICER VIDE ASSESSEE S LETTER DATED 17.06.1992 BASED ON WHICH A RECTIFICATION ORDER U/S 154 OF THE I.T. ACT WAS ISSUED ON 30.07.1992 WHEREIN FURTHER TDS CREDIT WAS GIVEN FOR ITA NO. 1533/BANG/2012 PAGE 3 OF 7 RS.1,47,98,234. HOWEVER THE ORDER MENTIONED THAT IN TEREST U/S 244A IS ALLOWED ONLY FROM THE DATE OF RECEIPT OF RECTIFIED TDS CERTIFICATES. 4. FURTHER CREDIT OF RS.11,00,508 WAS GIVEN ON 29.0 7.1993 BY AN ORDER U/S 154 AND RS. 8,44,294 BY ORDER DATED 26. 11.1993 (GIVING EFFECT TO THE CITS ORDER). THE REGULAR ASSESSMENT U/S 143(3) WAS COMPLETED ON 31.03.1994 ON A TOTAL INCOME OF RS.18,11,02,430 AS AGAINST RS.10,01,37,310 RETURNED BY THE ASSESSEE DUE TO ADD ING BACK OF VARIOUS ITEMS TOTALING TO RS.8,09,65,119. CONSEQUENTLY THE TAX PAYABLE WENT UP TO RS. 8,33,01,118. AFTER DEDUCTING THE TDS OF RS.7,26 ,60,255 SO FAR ADMITTED THERE WAS A BALANCE OF TAX PAYABLE BY THE ASSESSEE. 5. IN THE APPEAI FILED BY THE ASSESSEE AGAINST THE ADDITIONS, ORDERS WERE PASSED IN ITS FAVOUR BY THE CIT(A) DELETING RS . 4,68,08,506. A FURTHER SUM OF RS. 1,80,88,958 WAS DELETED ON GIVING EFFECT TO THE ORDERS OF THE TRIBUNAL VIDE ORDER DATED 10.03.2003. DUE TO THIS, AGAIN THE TOTAL TAXABLE INCOME CAME DOWN TO RS. 11,67,04,962 AND THE TAX PA YABLE TO RS. 5,36,84,283 AS AGAINST TDS OF RS. 7,26,60,255 RESUL TING IN A REFUND. WHILE PASSING THE ORDER FOR REFUND, THE AO HAS AGAIN TAK EN THE STAND THAT INTEREST U/S 244A IS NOT ALLOWABLE IN RESPECT OF TD S CERTIFICATES AMOUNTING TO RS. 1,67,43,036 SINCE DEFECTIVE CERTIFICATES WER E RECTIFIED. THE INTEREST AMOUNT WHICH IS THUS DENIED COMES TO RS. 25,11,450. 6. AGGRIEVED BY THE ORDER OF AO, THE ASSESSEE PREFE RRED APPEAL BEFORE THE CIT(A). THE LD. CIT(A) WAS OF THE VIEW THAT RE FUNDS TO THE EXTENT OF ITA NO. 1533/BANG/2012 PAGE 4 OF 7 RS.1,32,99,336 OUT OF A SUM OF RS.1,67,43,036 WAS N OT DELAYED FOR THE REASONS ATTRIBUTABLE TO THE ASSESSEE. FOLLOWING WE RE THE RELEVANT OBSERVATIONS OF THE CIT(A) ON THIS ISSUE:- 3. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE APPELLANT. THE MAIN ISSUE IN THIS APPEAL IS WITH R EGARD TO THE GRANTING OF INTEREST U/S 244A OF THE ACT. IT MAY BE SEEN FROM THE ABOVE THE TDS CERTIFICATES AMOUNTING TO RS.1,68,25, 188/- SUBMITTED BY THE APPELLANT WERE NOT ACCEPTED. THE A MOUNT DISPUTED IS INITIALLY RS.1,67,43,036/- ON WHICH THE APPELLANT REQUESTED FOR GRANT OF INTEREST U/S 244A OF THE ACT . IT IS SEEN FROM THE DETAILS THAT THE TDS CERTIFICATES AMOUNTING TO RS.1,32,99,930/- WERE NOT ACCEPTED BECAUSE THEY WER E NOT ISSUED IN A PROPER FORMAT. BUT THE APPELLANT SUBMITTED THE SAME BY GIVING VALID REASONS BY WAY OF EXEMPTION OR WAIVER BY THE CBDT IN THIS REGARD. THEREFORE, THE DELAY CANNOT BE ATTRIBUTED IN RESPECT OF THESE TDS CERTIFICATES AMOUNTING TO RS.1 ,32,99,930/-. HOWEVER, THERE WERE CERTAIN DEFECTS IN RESPECT OF T DS CERTIFICATES AMOUNTING TO RS.35,25,258/-, WHICH WERE RESUBMITTED BY THE APPELLANT TO THE ASSESSING OFFICER ONLY AFTER NECES SARY RECTIFICATIONS. IN VIEW OF THIS FACTUAL POSITION, T HE INTEREST U/S 244A OF THE ACT CANNOT BE DENIED FROM 01-04-1991 IN RESPECT OF DEFECTIVE TDS CERTIFICATES AMOUNTING TO RS.1,32,99, 336/- AS REGARDS TDS CERTIFICATES AMOUNTING TO RS.35,25,258/ - THE DELAY CAN BE ATTRIBUTED TO THE ASSESSEE AS THEY WERE DEFE CTIVE AND RECTIFIED LATER. THEREFORE, THE AO IS DIRECTED TO G RANT INTEREST U/S 244A OF THE ACT IN RESPECT OF RS.1,32,99,930/- AS A GAINST RS.1,67,43,036/- CLAIMED BY THE ASSESSEE WITH EFFEC T FROM 1/4/1991 AND FOR THE BALANCE AMOUNT FROM THE DATE O N WHICH THE RECTIFIED TDS CERTIFICATES ARE SUBMITTED. 7. AGGRIEVED BY THE ORDER OF CIT(APPEALS), THE REV ENUE HAS PREFERRED THE PRESENT APPEAL BEFORE THE TRIBUNAL. 8. THE EFFECTIVE GROUNDS OF APPEAL RAISED BY THE RE VENUE READ AS FOLLOWS:- ITA NO. 1533/BANG/2012 PAGE 5 OF 7 2. THE LEARNED CIT (A) HAS ERRED, WITHOUT APPRECI ATING THE FACTS AND CIRCUMSTANCES OF THE CASE, IN DIRECTING T HE AO TO GRANT INTEREST UNDER SEC 244A ON RS.1,32,99,930 WITH EFFE CT FROM 01.04.1991. 3. THE CIT (A) OUGHT TO HAVE APPRECIATED THAT THE ASSESSING OFFICER HAS MADE THE ORDER UNDER SEC 154 ON 29.07.1 993 BASED ON THE LETTER FURNISHED BY THE COMPANY ON 08.04.1993 S TATING THAT DEFECTIVE TDS CERTIFICATES WERE RECTIFIED AND HENCE , THE AO WAS JUSTIFIED IN COMPUTING THE INTEREST U/S 244A FROM J ULY 1993 AND NOT FROM 01.04.1991. 4. THE CIT(A) ERRED IN NOT MAKING A SPEAKING ORDER ELABORATING THE VALIDITY OF THE REASONS SUBMITTED B Y THE COMPANY, IN SO FAR AS THE VALIDITY OF THE REASONS ARE CONCER NED. 9. THE LD. DR REITERATED THE STAND OF REVENUE AS CO NTAINED IN THE GROUNDS OF APPEAL. WE HAVE CONSIDERED THE STAND TA KEN BY THE REVENUE IN THE GROUNDS OF APPEAL AND ARE OF THE VIEW THAT THE SAME ARE WITHOUT ANY MERIT. REFUSAL OF THE AO TO GIVE CREDIT FOR TDS WA S ITSELF ERRONEOUS. IN THIS REGARD, IT IS CLEARLY BROUGHT OUT IN THE STATEMENT OF FACTS FILED BY THE ASSESSEE BEFORE THE CIT(A) AS WELL AS BY THE LD. CI T(A) THAT TDS CERTIFICATES ISSUED BY RBI TOTALING TO RS.1,20,50,4 30 WERE CONSIDERED DEFECTIVE FOR THE REASON THAT COLS. 4 & 5 RELATING TO DATE OF REMITTANCES TO GOVT. ACCOUNT, BANK BRANCH WHERE TAX IS DEPOSITED W ERE NOT REQUIRED TO BE FILLED UP BY THE RBI IN VIEW OF THE EXEMPTION GRANT ED BY CBDT TO RBI IN THE MATTER OF FILLING UP THOSE COLUMNS. SIMILARLY, TDS CERTIFICATES TOTALING RS.12,49,500 WHICH WERE ISSUED BY APSCB, APSFC & VY SYA BANK LEASING LTD. WERE CONSIDERED DEFECTIVE AND TDS NOT GIVEN CREDIT BY THE AO FOR THE REASON THAT PRINTED FORMS HAD NOT BEEN USED BY THESE ENTITIES. IT ITA NO. 1533/BANG/2012 PAGE 6 OF 7 HAS ALSO BEEN BROUGHT IN THE STATEMENT OF FACTS FIL ED BEFORE THE CIT(A) THAT THESE ENTITIES WERE EXEMPT FROM USING PRINTED FORMS . IT CAN THUS BE SEEN THAT THE REVENUE WAS AT FAULT IN NOT GRANTING CREDI T FOR TDS. THE ASSESSEE HAD DULY BROUGHT TO THE NOTICE OF AO THE FACT THAT CREDIT FOR TDS WAS WRONGLY DENIED BY THE AO. THE AO ACCEPTED THE CLAI M OF ASSESSEE. IN SUCH CIRCUMSTANCES, IT CANNOT BE SAID THAT PROCEEDI NGS RESULTING IN REFUND WERE DELAYED BY THE ASSESSEE AND CONSEQUENTLY THE A O COULD NOT WITHDRAW INTEREST FOR ANY PERIOD U/S. 244A OF THE A CT. IN OUR VIEW, THE LD. CIT(A) HAS RIGHTLY COME TO THE CONCLUSION THAT AS F AR AS PROCEEDINGS RELATING TO REFUND TO THE EXTENT OF RS.1,32,99,336 WAS CONCERNED, THE ASSESSEE WAS NOT AT FAULT AND THEREFORE INTEREST CA NNOT BE DENIED FOR ANY PERIOD IN RESPECT OF THE AFORESAID SUM. WE FIND NO GROUNDS TO INTERFERE WITH THE ORDER OF LD. CIT(APPEALS). 10. CONSEQUENTLY, APPEAL OF THE REVENUE IS DISMISSED . PRONOUNCED IN THE OPEN COURT ON THIS 28 TH DAY OF JANUARY, 2015. SD/- SD/- ( ABRAHAM P. GEORGE ) ( N.V. VASU DEVAN ) ACCOUNTANT MEMBER JUDICIAL MEMBER BANGALORE, DATED, THE 28 TH JANUARY, 2015. /D S/ ITA NO. 1533/BANG/2012 PAGE 7 OF 7 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR / SENIOR PRIVATE SECRETARY ITAT, BANGALORE.