STATE BANK OF INDIA, MUMBAI V. DCIT 2(2), MUMBAI

ITA 1613/MUM/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1422 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-12-2016
• Appeal Filed By: Assessee
• Bench Allotted: E
• Assessment Year: 1984-1985
• Appeal Filed On: 07-03-2014
• Court: TRIBUNAL
• Department Lawyers: B PRUSETH
• Section: 244A; 154

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL E , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM & SHRI AMARJIT SINGH , JM ./ ITA NO S . 1613 TO 1616 / MUM/20 1 4 ( / ASSESSMENT YEAR S : 1984 - 85 TO 1988 - 89 ) STATE BANK OF INDIA, FINANCIAL REPORTING AND TAXATION DEPARTMENT, 3 RD FLOOR, CORPORATE CENTRE STATE BANK BHAVAN, MADAM CAMA ROAD, NARIMAN POINT, MUMBAI - 400021 VS. DCIT - 2 (2), MUMBAI ./ ./ PAN/GIR NO. : A A AC S 8577 K ( / APPELLANT ) .. ( / RESPONDENT ) /AS SESSEE BY : SHRI C. NARESH /REVENUE BY : SHRI B. PRUSETH / DATE OF HEARING : 21 /0 9 /2016 / DATE OF PRONOUNCEMENT 14 / 12 /20 16 / O R D E R PER R.C.SHARMA (A.M) : TH ESE ARE THE APPEALS FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A), MUMBAI, FOR THE ASSESSMENT YEAR S 1984 - 85 TO 1988 - 89 . 2. R IVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. 3. T HE FACTS OF THE CASE A RE THAT FOLLOWING ITAT'S ORDER IN APPEAL NO 9254 & 9255/BOM/1990 DATED 22. 08.2006, THE APPEAL EFFECTS WERE GIVEN VIDE ORDER U/S 143(3)/254 DATED 19.12.2007 IN ASSESSEE'S CASE FOR AYS 1984 - 85, 1985 - 86, 1987 - 88 & 1988 - 89 AND REFUND TOGETHER WITH INTEREST THE REON WAS GRANTED TO THE ASSESSEE IN ALL THOSE ASSESSMENT YEARS. THEREAFTER A NOTICE U/S 154 WAS ISSUED ON 28.03.2012 FOR RECTIFYING THE AMOUNT OF ITA NO S . 1613 - 1616/14 STATE BANK OF INDIA 2 INTEREST PAYABLE/ PAID TO THE ASSESSEE ON THE REFUND GRANTED TO IT IN ALL THESE FOUR ASSESSMENT YEARS. THE AO PASSED ORDERS U/S 154 DATED 31.03.2012 IN ALL THESE YEARS SEPARATELY AND RAISED THE DEMAND ON ACC OUNT OF EXCESS PAYMENT MADE TO IT . 4. BY THE IMPUGNED ORDER CIT(A) CONFIRMED THE ACTION OF THE AO AGAINST WHICH ASSESSEE IS IN FURTHER APPEAL BEFORE US. 5. GRI EVANCE OF ASSESSEE IN THE ASSESSMENT YEAR 1984 - 85 PERTAINS TO GRANTING OF INTEREST U/S.244(1A) ON THE ACCOUNT OF REFUND. IT WAS CONTENTION OF ASSESSEE THAT AO HAS NOT GRANTED CORRECT AMOUNT OF INTEREST ON THE REFUND. FURTHER CONTENTION OF LEARNED AR WAS TH AT I NTEREST HAS NOT BEEN GRANTED ON THE INTEREST THAT BECAME DUE TO THE ASSESSEE ON ACCOUNT OF ADJUSTING THE REFUNDS GRANTED FIRST AGAINST THE TAX REFUNDS DUE AGAINST THE CORRECT PROCEDURE OF ADJUSTING THE SAME FIRST AGAINST INTEREST REFUNDS DUE AND THEREA FTER , AGAINST THE TAX REFUNDS DUE. 6. ALL THE GROUNDS RAISED BY THE ASSESSEE RELATES TO THE WITHDRAWAL OF INTEREST PAYABLE TO IT [ON THE REFUND] BY WAY OF PASSING THE REC TIFICATION ORDER U/S 154. THE ASSESSEE HAS CHALLENGED IT ON LEGALITY OF THESE ORDERS T OO. THE ISSUES ARE BASICALLY COMPUTATION OF INTEREST PAYABLE TO IT U/S 214, 244 & 244A OF THE IT ACT. 7. WE HAVE CONSIDERED RIVAL CONTENTIONS AND FOUND THAT AS AGAINST AOS ACTION FOR COMPUTATION INTEREST U/S.244A(1)(B). CONTENTION OF ASSESSEE WAS THAT PRO VISIONS OF SECTION 244A IS APPLICABLE FROM ASSESSMENT YEAR 1989 - 90. THE CIT(A) HAS DIRECTED THE AO AS UNDER: - ITA NO S . 1613 - 1616/14 STATE BANK OF INDIA 3 4.2.1 IT IS NOTED THAT THE AO HAS COMPUTED INTEREST U/S 244A(1 )(B) FOR PART OF THE PERIOD [W.E.F 01.01.1994]. THE PROVISION OF SECTION 244A IS AP PLICABLE W.E.F. AY 1989 - 90 ONLY. THE RELEVANT ASSESSMENT YEARS ARE 1984 - 85, 1985 - 86, 1987 - 88 & AY 1988 - 89. THE PROVISIONS APPLICABLE FOR THESE ASSESSMENT YEARS ARE SECTIONS 214 & 244 [AND NOT 244A]. THE AO IS THEREFORE DIRECTED TO RE - COMPUTE THE INTEREST P AYABLE TO THE ASSESSEE [ U/S 214 & 244 ONLY] AND REVISE THE ITNS - 150A. 4.2.2 WHILE COMPUTING INTEREST UNDER SECTION 214, CARE NEED TO BE TAKEN FOR THE AMENDMENTS MADE IN THAT PROVISION. AS PER SUB - SECTION(1), THE INTEREST IS PAYABLE ON THE ADVANCE TAX TH AT EXCEEDS 'THE ASSESSED TAX' FOR THE PERIOD 1ST APRIL (NEXT FOLLOWING THE FINANCIAL YEAR IN WHICH ADVANCE TAX WAS PAID) TO THE DATE OF REGULAR ASSESSMENT. FURTHER SUB - SECTION (1A) ALLOWS THE REDUCTION/ INCREASE INTO SUCH INTEREST ON ACCOUNT OF APPEAL EFFE CT FOR RELIEF I ENHANCEMENT, AS THE CASE MAY BE, ON ADDITION TO THE TOTAL INCOME. BUT THIS SUBSECTION (1A) HAS BEEN INSERTED W.E.F. 01.04.1985 AND APPLICABLE FOR AY 1985 - 86 AND ONWARDS (TILL AY 1988 - 89). PRIOR TO 01.04.1985, SUB - SECTION (1A) WAS ALL TOGETH ER DIFFERENT AND AS SUCH REDUCTION / INCREASE OF INTEREST PAYABLE UNDER SUB SECTION (.1) WAS NOT POSSIBLE. FOR READY REFERENCE, THE SECTION 214 AS IT EXISTED W.E.F. 01.04.1985 AND PRIOR TO THAT ARE REPRODUCED HEREUNDER: 8. SINCE THE RELEVANT ASSESSMENT UN DER CONSIDERATION IS ASSESSMENT YEAR 1984 - 85, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A) FOR DIRECTING THE AO TO COMPUTE INTEREST U/S.214 AND 244 AND NOT U/S.244A OF THE IT ACT. ACCORDINGLY, WE CONFIRM THE ACTION OF THE CIT(A) IN THIS REGARD. 9 . T HE GRIEVANCE OF THE ASSESSEE IN THE A.Y.1984 - 85 PERTAINS TO APPLICABILITY OF PROVISIONS OF SECTION 214( 1 A) FOR ALLOWING INTEREST ON REFUNDS. AO DECLINED INTEREST U/S.214(1A) ON THE PLEA THAT AMENDMENT WAS BROUGHT W.E.F. A.Y 1985 - 86 , THEREFORE, NO INTEREST WAS TO BE ALLOWED IN THE A.Y.1984 - 85. CIT(A) CONFIRMED THE ORDER OF AO AND ASSESSEE IS IN FURTHER APPEAL BEFORE US. ITA NO S . 1613 - 1616/14 STATE BANK OF INDIA 4 10 . WE FOUND THAT ISSUE IS SQUARELY COVERED BY THE DECISION OF HON BLE BOMBAY HIGH COURT IN THE CASE OF ULTRAMARINE & PIGMENTS LTD. 286 ITR 86, WHEREIN THE HONBLE HIGH COURT HELD THAT EVEN THOUGH SUB - SECTION 1A WAS INTRODUCED IN SECTION 214 BY TAXATION LAW (AMENDMENT)ACT, 1984 W.E.F.1.4.1985, THE SAME WOULD BE APPLICABLE TO ALL THE PENDING CASES. IT WAS OBSERVED BY HONBLE HIGH COURT THAT IN VIEW OF THE DECISION OF DIVISION BENCH IN THE CASE OF CIT V. SASWAD MALI SUGAR FACTORY LTD., 249 ITR 756 WHEREIN T HE DIVISION BENCH HELD THAT THE TAXATION LAWS (AMENDMENT) ACT, 1984 IS PROCEDURAL IN NATURE AND, THEREFORE, IT WILL APPLY TO ALL THE PENDING A CTIONS. THIS BEING SO, SUB - SECTION (1A) WHICH WAS INTRODUCED IN SECTION 214 WILL APPLY TO THE PETITIONER S CASE, FOR THE ASSESSMENT YEAR 1982 - 83. 11. RESPECTFULLY FOLLOWING THE ABOVE DECISION S OF HON BLE BOMBAY HIGH COURT, WE DO NOT FIND ANY MERIT IN THE ORDER OF THE LOWER AUTHORITIES FOR DECLINING THE CLAIM OF INTEREST U/S.214(1A) FOR THE ASSESSMENT YEAR 1984 - 85 UNDER CONSIDERATION. 12 . COMMON GRIEVANCE IN ALL THE YEARS UNDER CONSIDERATION PERTAINS TO RATE OF INTEREST PAYABLE AS PER THE PROVISIONS OF SEC TION 214/244. 13 . WE HAVE CONSIDERED RIVAL CONTENTIONS AND FOUND THAT THE CIT(A) HAD HELD THAT EVEN THOUGH THE PROVISIONS OF SECTION 214/244 WERE APPLICABLE THE RATE OF INTEREST GIVEN IN 244A HAS TO BE CONSIDERED FOR GRANT OF INTEREST ON REFUND . SINCE THE PROVISIONS OF SECTION 214/244 HAS NOT BEEN REPEALED , THEREFORE, THE RATE OF INTEREST AS GIVEN IN THE SAID SECTIONS I.E., SECTION 214 / 244 IN THE RESPECTIVE YEARS SHOULD ONLY BE APPLIED. IN ITA NO S . 1613 - 1616/14 STATE BANK OF INDIA 5 VIEW OF THE ABOVE, WE DIRECT THE AO TO ALLOW INTEREST U/S.214/244, AS PER THE RATE PREVAILING IN THE RESPECTIVE ASSESSMENT YEARS. WE DIRECT ACCORDINGLY. 14 . IN THE ASSESSMENT YEAR 1984 - 85, 1985 - 86 AND 1987 - 88, THE ASSESSEE HAS NOT GIVEN FULL CREDIT FOR THE TDS/DITR WHILE COMPUTING NET TAX PAYABLE/REFUNDABLE AND INTEREST THEREON. IN THE INTEREST OF JUSTICE, WE RESTORE THIS GROUND BACK TO THE FILE OF THE AO TO VERIFY THE SAME AND FOR DECIDING THE ISSUE AFRESH AS PER LAW. WE DIRECT ACCORDINGLY. 15 . IN THE RESULT, APPEAL S OF THE ASSESSEE ARE ALLOWED IN PART, IN TERMS INDICATE D HEREINABOVE. O RDER PRONOUNCED IN THE OPEN COURT ON THIS 14 / 12 / 201 6 . S D/ - ( AMARJIT SINGH ) S D/ - ( R.C.SHARMA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED 14 / 12 /201 6 . . /PKM , . / PS / KARUNA SR.P.S. / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / ( ASSTT. REGISTRAR) , / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A), MUMBAI. 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. //TRUE COPY//