Sri B.M.Malani (HUF), Hyderabad V. ITO, Hyderabad

ITA 159/HYD/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 66423 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 8 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 11-07-2011
• Assessment Year: 1995-1996
• Appeal Filed On: 03-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMISHA S GUPT
• Assessee Lawyers: G KALYAN DAS
• Section: 244A; 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NO. 159/2011 ASSESSMENT YEAR: 1995-06 SRI B.M. MALANI(HUF), ... APPELLANT HYDERABAD. (PAN AFCPM 7838P) VS. INCOME TAX OFFICER, RESPONDENT WARD 10(4), HYDERABAD. APPELLANT BY : SHRI G. KALYAN DAS RESPONDENT BY : SMT. AMISHA S. GUPT DATE OF HEARING : 18/10/2012 DATE OF PRONOUNCEMENT : 31/10/ 2012 ORDER PER ASHA VIJAYARAGHAVAN, J.M.: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF CIT(A)-VI, HYDERABAD DATED 15/11/2010 FOR THE AS SESSMENT YEAR 1995-96. 2. SINCE SRI B.M. MALANI HAVING EXPIRED, THE LEGAL REPRESENTATIVE SMT. ARUNA MALANI, WIFE OF LATE SRI B.M. MALANI HAS BEEN BROUGHT ON RECORD. 2 ITA NO. 159/HYD/2011 SRI B.M. MALANI (HUF) 3. BRIEFLY THE FACTS OF THE CASE ARE THAT THE CIT(A ) PASSED AN ORDER DATED 22/03/2003 FOR AY 1995-06 IN FAVOUR OF THE ASSESSEE WITH A DIRECTION FOR GIVING REFUND AND INT EREST. ON FURTHER APPEAL BY THE DEPARTMENT, THE ITAT IN ITA 896/HYD/2003 PASSED AN ORDER DATED 27/04/2007 UPHOL DING THE ORDER OF THE CIT(A) DISMISSING THE APPEAL OF TH E REVENUE. AS PER THE ORDER OF THE ITAT, THE AO WAS REQUIRED T O PASS CONSEQUENTIAL ORDER FOR AY 1995-06 TO GRANT INTERES T U/S 244A OF THE ACT. THE AO PASSED REFUND ORDER DATED 22/06 /2010 CONSEQUENT TO THE ORDER OF THE ITAT IN ITA NOS. 119 8, 1199, 1200 & 202/HYD/2008, DATED 30/11/2009, AND THE CONSEQUENTIAL ORDER DATED 14/07/2009 AND THE RECTIF ICATION ORDER DATED 28/02/2002 FOR THE AY 1995-06 AND ARRIV ED AT THE BALANCE REFUNDABLE AMOUNT OF RS. 68,19,291/-. 4. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE P REFERRED THE APPEAL BEFORE THE CIT(A) AND RAISED THE FOLLOWI NG GROUNDS OF APPEAL: 1. THE CONSEQUENTIAL ORDER OF THE LEARNED AO IS CON TRARY TO LAW AND THE FACTS. 2. THE LEARNED AO ERRED IN QUANTIFYING THE AMOUNT O F INTEREST PAYABLE TO THE APPELLANT U/S 244A OF THE ACT ON THE AMOUNT OF ADVANCE TAX RS. 42 LAKHS AT RS. 47.43 LAKHS AGAINST CORRECT AMOUNT RS. 61.13 LAKHS IN THE CONSEQUENTIAL ORDER DATED 31/01/2008. THE LEARNED A O FAILED TO NOTE BY QUANTIFYING INTEREST AT RS. 47.43 LAKHS HAS DENIED FURTHER RELIEF ALLOWABLE TO THE APPELLAN T UNDER LAW. 3. THE APPELLANT CONTENDS THAT THE LEARNED AO HAVIN G DELAYED INORDINATELY, PAYMENT OF INTEREST INORDINAT ELY, INCONFORMITY WITH LAW OF SUPREME COURT, THE APPELLA NT IS ENTITLED TO INTEREST ON THE AMOUNT OF INTEREST PAYA BLE AND THEREFORE THE LEARNED AO BE DIRECTED TO GRANT INTER EST FOR 3 ITA NO. 159/HYD/2011 SRI B.M. MALANI (HUF) THE DELAY ON THE AMOUNT OF INTEREST PAYABLE TO THE APPELLANT PURSUANT TO APPELLATE ORDERS. 4. THE LEARNED AO FURTHER ERRED IN ADJUSTING THE RE FUND PAYABLE TO THE APPELLANT FOR THE ABOVE YEAR AGAINST THE ALLEGED TAX DEMANDS AND INTEREST FOR THE ASSESSMENT YEARS 1991-92 AND 1992-93. THE LEARNED AO FAILED TO NOTE THAT FOR THE ABOVE ASSESSMENT YEARS NEITHER TH ERE WAS ANY TAX DEMAND NOR INTEREST WAS PAYABLE AS ENTI RE TAX DEMANDS ALONG WITH INTEREST WERE ALREADY PAID E ARLIER AND THEREFORE ADJUSTMENT OF REFUND IN BAD IN LAW. 5. BEFORE THE CIT(A), IT WAS SUBMITTED BY THE ASSES SEE THAT AS PER THE PROVISIONS OF LAW THE INTEREST ALLOWABLE FROM 01/04/1995 TO 31/03/2008 U/S 244A WORKS OUT TO RS. 61,13,596/- AS AGAINST THIS THE AO HAD DETERMINED T HE INTEREST AT RS. 47,43,441/- ONLY. THE ASSESSEE THEREFORE SUB MITTED A WORKING DONE BY HIM REGARDING THE INTEREST PAYABLE TO HIM. THE ASSESSEE FURTHER PLEADED THAT AS THE AO HAD DEL AYED IN PAYMENT OF INTEREST TO THE ASSESSEE, HENCE, INCONFI RMITY WITH THE LAW DELIVERED BY THE SUPREME COURT IN THE CASE OF SANDVIK ASIA LTD., VS. CIT, 280 ITR 643, THE ASSESSEE SHOUL D BE GIVEN INTEREST FOR THE DELAY IN PAYMENT OF INTEREST. IT W AS FURTHER SUBMITTED THAT THE AO HAD ADJUSTED THE REFUND OF 19 95-96 AGAINST THE TAX ARREARS OF 1991-92 AND 1992-93, WHE REAS THERE ARE NO TAX ARREARS FOR THESE YEARS AT ALL. THE WORK ING OF THE INTEREST U/S 244A AND THE SUBMISSIONS OF THE ASSESS EE WERE FORWARDED TO THE AO CALLING FOR A REMAND REPORT. 6. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSE E, THE CIT(A) HELD THAT THE AO VIDE REMAND REPORT DT. 20/1 0/2009, GIVING CLEAR DETAILS OF INTEREST RATES FOR THE VARI OUS PERIODS HAD SUBMITTED THAT THE ASSESSEE HAD BEEN GRANTED INTERE ST U/S 4 ITA NO. 159/HYD/2011 SRI B.M. MALANI (HUF) 244A AS PER THE PROVISIONS OF LAW AND THE SAME HAD BEEN GRANTED CORRECTLY AND IT COULD BE SEEN FROM THE WOR KING THAT THE INTEREST HAD BEEN GRANTED TILL THE DATE OF PASS ING OF CONSEQUENTIAL ORDER I.E. 31/01/2008, GIVING EFFECT TO THE ORDER OF ITAT. HE FURTHER HELD THAT A COPY OF THE REMAND REPORT HAD BEEN FORWARDED TO THE ASSESSEE CALLING FOR OBJECTIO NS IF ANY AND THE ASSESSEE VIDE LETTER DT. 03/05/2010, IN PAR A NO. 1 SUBMITTED THAT THE INTEREST WORKING ARRIVED AT BY T HE AO IN THE REMAND REPORT IS CORRECT. THE CIT(A), THEREFORE, HE LD THAT AS THE ASSESSEE HIMSELF HAD ACCEPTED THAT THE INTEREST WORKING IS CORRECT THE GROUNDS RAISED AS ONE AND TWO IN GROUND S OF APPEAL ARE DECIDED AGAINST THE ASSESSEE. 7. AS REGARDS THE ISSUE OF INTEREST ON INTEREST FOR THE DELAY OF ISSUANCE OF THE SAME, AS RAISED GROUND NO. 3 IN GROUNDS OF APPEAL, THE CIT(A) RELYING ON THE DECISION OF HONB LE SUPREME COURT, HELD THAT THE SAME IS NOT SUSTAINABLE AS THE ASSESSEE HAD HIMSELF ACCEPTED THAT THE INTEREST CALCULATED B Y THE AO U/S 244A IS CORRECT. GROUND NO. 3 WAS THEREFORE DECIDED AGAINST THE ASSESSEE BY THE CIT(A). 8. AGGRIEVED BY THE ORDER OF THE CIT(A), THE ASSESS EE IS IN APPEAL BEFORE US RAISING THE FOLLOWING GROUNDS OF A PPEAL: 1. THE ORDER OF THE LEARNED CIT(A) IS CONTRARY TO L AW AND THE FACTS. 2. THE LEARNED CIT(A) ERRED IN NOT ALLOWING COMPENS ATORY INTEREST FOR THE DELAY OF MORE THAN 7 YEARS FROM TH E ORDER OF CIT(A) DT. 22/03/2003 WHILE REFUND RS. 68.19 LAK HS WAS PAID BY ORDER DT. 22/06/2010. 3. THE LEARNED CIT(A) MISCONCEIVED THE APPELLANTS CONTENTION SPECIFICALLY MADE FOR GRANT OF COMPENSAT ORY 5 ITA NO. 159/HYD/2011 SRI B.M. MALANI (HUF) INTEREST FOR INORDINATE DELAY IN REFUND WHILE THE I NTEREST WORKING U/S 244A OF THE ACT WAS ACCEPTED. 4. THE LEARNED CIT(A) ERRED IN NOT GRANTING COMPENS ATORY INTEREST FOR INORDINATE DELAY IN REFUND FOLLOWING T HE DECISION OF SUPREME COURT IN SANDVIK ASIA LTD. VS. CIT, 280 ITR 643. 5. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED, T HE APPELLANT PRAYS THAT THE COMPENSATORY INTEREST FOR THE INORDINATE DELAY OF MORE THAN 7 YEARS IN PAYMENT OF REFUND RS. 68.19 LAKHS BE DIRECTED TO BE ALLOWED. 9. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE SHRI G. KALYAN DAS RELIED UPON THE FOLLOWING CASE LAWS 1. S ANDVIK ASIA LTD. VS. CIT & OTHERS, 280 ITR 643 (SC) 2. CIT VS. NARENDRA DOSHI, 254 ITR 606(SC) 3. HIRALAL HARENDRALAL ROY ESTATES LTD. VS. UNION O F INDIA AND OTHERS, 340 ITR 69 (CAL.) 10. THE LEARNED COUNSEL FOR THE ASSESSEE SHRI G. KA LYAN DAS SUBMITTED THAT ON THE PRINCIPLES OF EQUITY, THE HO NBLE SUPREME COURT HAS GIVEN DIRECTIONS FOR PAYMENT OF I NTEREST ON INTEREST, THEREFORE, HE PLEADED THAT THE SAME RATIO SHOULD BE FOLLOWED IN ASSESSEES CASE ALSO. 11. ON THE OTHER HAND, THE LEARNED DR SMT. AMISHA S . GUPT RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 12. WE HAVE HEARD THE ARGUMENTS OF BOTH THE PARTIES AND PERUSED THE RECORD AS WELL AS GONE THROUGH THE ORDE RS OF THE AUTHORITIES BELOW. WE FIND THAT THE CIT(A) AT PARA 7 OF HIS ORDER HAS MISCONCEIVED THE FACTS OF THE CASE AND, H ENCE, WE DEEM IT FIT AND PROPER TO REMIT THE ISSUE TO THE FI LE OF THE CIT(A) TO CONSIDER THE GRANT OF COMPENSATORY INTERE ST FOR 6 ITA NO. 159/HYD/2011 SRI B.M. MALANI (HUF) INORDINATE DELAY IN REFUND FOLLOWING THE DECISION O F THE HONBLE SUPREME COURT IN THE CASE OF SANDVIK ASIA LTD VS. C IT AND OTHERS (SUPRA). WE ORDER ACCORDINGLY. 13. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 31 ST OCTOBER, 2012. SD/- SD/- ( CHANDRA POOJARI) (ASHA VIJAYARAGHAVAN) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED: 31 ST OCTOBER, 2012. KV COPY TO:- 1) SRI B.M. MALANI (HUF) LTD., C/O M/S KALYANDAS & CO.,CAS. 15, VENKATESWARA COLONY, NARAYANAGUDA, HYDERABAD 500 029. 2) ITO, WARD 10(4), AAYAKAR BHAVAN, HYDERABAD. 3) THE CIT (A)-VI, HYDERABAD 4) CIT-V, HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDERABAD.