ACIT, CHENNAI V. M/s. Brakes India Ltd., CHENNAI

ITA 1559/CHNY/2008

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 4716 (ITAT-CHENNAI)
• Duration Of Justice: 11 year(s) 7 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-02-2020
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: misc
• Appeal Filed On: 21-07-2008
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MRS VIJAYA PRABHA JCITD R
• Assessee Lawyers: R VIJAYARAGHAVAN
• Keywords: Set aside
• Section: 244A; 263

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : CHENNAI , ! ' # $% BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENT & SHRI M. BALAGANESH, ACCOUNTANT MEMBER ./ I.T.A.NO.1559/CHNY/2008 / ASSESSMENT YEAR : 1989-90 ASSISTANT COMMISSIONER OF INCOME TAX, LARGE TAXPAYER UNIT, CHENNAI 600 101 VS. M/S.BRAKES INDIA LTD., PADI, CHENNAI 600 050. [PAN AAACB 2533 Q ] ( &' / APPELLANT) ( ()&' /RESPONDENT) / APPELLANT BY : MRS.VIJAYA PRABHA,JCIT,D.R /RESPONDENT BY : MR.R.VIJAYARAGHAVAN,ADVOCATE / DATE OF HEARING : 24 .02.2020 ! / DATE OF PRONOUNCEMENT : 25 .02.2020 $' / O R D E R PER M. BALAGANESH, ACCOUNTANT MEMBER: THESE APPEAL OF THE REVENUE ARISE OUT OF THE ORDER OF THE LD COMMISSIONER OF INCOME TAX (LTU APPEALS), CHENNAI, IN ITA NO.2/2008- 09/LTU(A) DATED 25.04.2008 FOR ASSESSMENT YEAR 198 9-90. ITA NO.1559/CHNY/2008 :- 2 -: 2. THE ONLY ISSUE TO BE DECIDED IN THE APPEAL OF R EVENUE IS WITH REGARD TO GRANT OF INTEREST UNDER SECTION 244A OF T HE ACT. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THIS TRIBUNAL IN ITA NOS.1705/MDS/1993 AND 1047/MDS/1996 DATED 06.02.2003 HAD SET ASIDE TH E ORDER OF THE ADMINISTRATIVE COMMISSIONER OF INCOME TAX UNDER SEC TION.263 OF THE ACT ON 15.03.1993 AND CONSEQUENTIAL ASSESSMENT ORDER FR AMED BY THE A.O. PURSUANT TO SECTION 263 PROCEEDINGS WAS QUASHED BY THE TRIBUNAL. LATER, THE REVENUE PREFERRED AN APPEAL BEFORE HONBLE MADR AS HIGH COURT IN TAX CASE APPEAL NO.813,814, 816 TO 819 OF 2009, WHI CH WAS DISPOSED OF BY THE HONBLE JURISDICTIONAL HIGH COURT VIDE ITS O RDER DATED 20.03.2019 WHEREIN THE HONBLE MADRAS HIGH COURT REMITTED THE MATTER BACK TO THIS TRIBUNAL TO DECIDE THE ISSUE IN THE LIGHT OF HONBL E SUPREME COURT DECISION IN THE CASE OF C.I.T VS. GUJARAT FLUORO CH EMICALS REPORTED IN 358 ITR 291(SC) AND IN ACCORDANCE WITH LAW. HENCE, THE PRESENT APPEAL IS TO BE DECIDED PURSUANT TO THE DIRECTIONS OF THE HONBL E MADRAS HIGH COURT. THEREAFTER, THE ASSESSMENT ORIGINALLY REVISED ON 16 .11.1992 WAS FURTHER REVISED TO GIVE EFFECT TO THE ORDER OF THE TRIBUNAL IN I.T.A. NO. NO.32/MDS./1993 DATED 06.02.2003. ACCORDINGLY, THE LD. A.O FRAMED THE ASSESSMENT GIVING EFFECT TO THE ORDER OF THE TRIBUN AL ON 04.01.2008 BY DETERMINING THE TOTAL INCOME AT 86,74,388/- WHICH ULTIMATELY RESULTED IN REFUND OF TAX DUE TO THE ASSESSEE. SINCE FINAL ASSE SSMENT RESULTED IN ITA NO.1559/CHNY/2008 :- 3 -: REFUND, THE ASSESSEE WAS ENTITLED FOR INTEREST UNDE R SECTION 244A OF THE ACT, WHICH WAS ALSO GRANTED BY THE LD. A.O IN THE F INAL ASSESSMENT FRAMED ON 04.01.2008. BUT WE FIND THAT THERE IS SOM E DISPUTE WITH REGARD TO THE ADJUSTMENT OF REFUND AND CONSEQUENTIAL INTER EST UNDER SECTION.244A OF THE ACT THEREON. THE ASSESSEE ACCOR DINGLY PREFERRED AN APPEAL BEFORE THE LEARNED CIT(A), WHO HELD THAT THE ASSESSEE IS ENTITLED TO INTEREST ON ANY AMOUNT WHICH ADMITTEDLY INCLUD ES INTEREST, THAT IS DUE TO THE ASSESSEE. IN FACT, THE LEARNED CIT(A) HE LD THAT THE ASSESSEE IS ENTITLED FOR INTEREST ON INTEREST. AGAINST THIS ORD ER OF LEARNED CIT(A), THE REVENUE IS IN APPAL BEFORE US. 4. WE FIND THAT THE LAW IS VERY WELL SETTLED THAT THE ASSESSEE IS IS NOT ENTITLED FOR INTEREST ON INTEREST. HOWEVER, THE MANNER IN WHICH ANY REFUND, WHICH HAS BEEN GRANTED PARTLY TO THE ASSESS EE IS TO BE ADJUSTED FIRST TOWARDS INTEREST DUE TO THE ASSESSEE, AND REM AINING PORTION SHOULD BE ADJUSTED TOWARDS THE TAX DUE TO THE ASSESSEE. TH IS ADJUSTMENT, IF MADE, WOULD BE JUST AND FAIR AND WOULD ALSO BE IN C ONSONANCE WITH THE PROVISIONS OF SECTION 140A OF THE ACT, WHICH TALKS ABOUT THE MANNER OF ADJUSTMENT OF AMOUNTS PAID BY THE ASSESSEE TO THE I NCOME TAX DEPARTMENT. IN THIS REGARD, WE FIND THAT THE ASSESS EE HAD FILED A PETITION UNDER RULE-27 OF ITAT RULES WITH THE FOLLOWING PRAY ER: ) IN COMPUTING THE INTEREST PAYABLE UNDER SECTION .244A, THE REFUNDS PAID BY THE DEPARTMENT SHOULD BE FIRST ADJUSTED AGA INST THE ITA NO.1559/CHNY/2008 :- 4 -: INTEREST IN THE AMOUNT REFUNDABLE BY THE DEPARTMENT AND ONLY THE BALANCE AMOUNT SHOULD BE ADJUSTED AGAINST THE TAX T O BE REFUNDED. B) INTEREST UNDER SECTION 244A SHOULD BE COMPUTED ON THE OUTSTANDING TAX AS ADJUSTED IN THE MANNER SPECIFIED IN THE GROUNDS ABOVE. C) UNDER SECTION 140A, THE AMOUNT PAID AS SELF ASS ESSMENT TAX IS FIRST ADJUSTED AGAINST THE INTEREST PAYABLE BY THE ASSESS EE AND ONLY THE BALANCE IS ADJUSTED AGAINST THE TAX PAYABLE. D) THIS IS THE MANNER OF ADJUSTMENT PRESCRIBED BY THE INCOME TAX ACT UNDER SECTION 140A AND THE SAME MANNER OF ADJUSTMEN T SHOULD ALSO BE APPLIED FOR CALCULATING INTEREST UNDER SECT ION 244A. WE FIND LOT OF FORCE IN THE PETITION UNDER RULE 27 OF ITAT RULES FILED BY THE ASSESSEE, WHICH DESERVE TO BE ADMITTED AND THE PRAYER SOUGHT FOR THEREON DESERVES TO BE ACCEPTED AS SUCH. WE ACCORDI NGLY DIRECT THE LD. A.O.TO FIRST ADJUST THE PART OF THE REFUND GRAN TED TO THE ASSESSEE TOWARDS INTEREST UNDER SECTION 244A OF THE ACT DUE TO THE ASSESSEE AND THE REMAINING PORTION IF ANY, SHALL BE ADJUSTED TOWARDS THE TAX PORTION DUE TO THE ASSESSEE. THIS WOULD BE IN SPIR IT AND IN CONSONANCE WITH THE PROVISIONS OF SECTION 140A OF THE ACT WHEN TAXES ARE PAID BY THE ASSESSEE TO THE INCOME TAX DEPARTME NT. THE SAME ITA NO.1559/CHNY/2008 :- 5 -: PATTERN OF SECTION 140A OF THE ACT SHOULD BE FOLLOW ED BY THE INCOME TAX DEPARTMENT WHILE GRANTING REFUND INCLUDING INTE REST UNDER SECTION 244A OF THE ACT. ACCORDINGLY, THE APPEAL OF REVENUE IS ALLOWED AND PETITION UNDER RULE 27 OF ITAT RULES PREFERRED BY T HE ASSESSEE IS ALLOWED. 5. IN THE RESULT, THE APPEAL OF REVENUE IS ALLOWED AND PETITION UNDER RULE 27 OF ITAT RULES PREFERRED BY THE ASSESS EE IS ALLOWED. ORDER PRONOUNCED ON 25 TH FEBRUARY, 2020, AT CHENNAI. SD/- SD/- ( ) (MAHAVIR SINGH) '#$ /VICE PRESIDENT %& '()* ) (M. BALAGANESH) # $% / ACCOUNTANT MEMBER +, / CHENNAI -. / DATED: 25 TH FEBRUARY,2020. K S SUNDARAM .*(( /0(10 / COPY TO: ( 1 . / APPELLANT 4. ( 2 / CIT 2. / RESPONDENT 5. 03)( 4 / DR 3. ( 2(56 / CIT(A) 6. )7(8 / GF