Navayuga Quazigund Expressway (P) Limited, Hyderabad V. Dy.CIT., Circle-15(1), Hyderabad, Hyderabad

ITA 1651/HYD/2014

• Counselvise Citation: 165122514 RSA 2014
• Duration Of Justice: 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-03-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 11-03-2015
• Assessment Year: 2012-2013
• Appeal Filed On: 28-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJAT MITRA
• Assessee Lawyers: V RAGHAVENDRA RAO

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B', HYDERABAD BEFORE SHRI P.M.JAGTAP, ACCOUNTANT MEMBER AND SMT.ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NO.1651/HYD/14 : ASSESSMENT YEAR 2012 - 13 M/S. NAVAYUGA QUAZIGUND EXPRESSWAY (P)LIMITED HYDERABAD (PAN AADCN 2868 D ) V/S. DY. COMMISSIONER OF INCOME - TAX CIRCLE 1 5 (1) HYDERABAD (APPELLANT) (RESPONDENT) APPELLANT BY : S HRI V.RAGHAVENDRA RAO RESPONDENT BY : SHRI RAJAT MITRA, DR DATE OF HEARING 11.3.2015 DATE OF PRONOUNCEMENT 13.3.2015 O R D E R PER P.M.JAGTAP, ACCOUNTANT MEMBER : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) II , HYDERABAD DATED 6.8.2014, WHE R EBY HE CONFIRMED THE INTEREST CHARGED BY THE ASSESSING OFFICER UN D ER S.201(1A) OF THE ACT, AS COMPU T ED BY THE ASSESSING OFFICER BY TAKING THE PERIOD OF DELAY ON THE BA S IS OF CALENDAR MONTH INSTEAD OF MONTH OF 30 DAYS AS CLAIMED BY TH E ASSESSEE . 2 . THE ASSESSEE IN THE PRESENT CASE IS A COMPANY INCORPORATED ON 21.5.2010 FOR EXECUTION OF BOT R OAD AND T UNNEL P ROJECT AT QUA Z IGUND , JAMMU AND KASHMIR. A SURVEY UN D ER S.133A WAS CARRIE D OUT IN THE CA S E OF THE ASSESSEE ON 17.9.2012 TO VERIFY THE COMPLI A N C E O F TDS PROVISIONS. AS FOUND DU R IN G TH E COURSE OF SURVEY, THE ASSESSEE COMPANY HAD PURPORTEDLY DEDUCTED TAX UN D ER S.194C AND 194J AND ALSO REMI T TED THE SAME TO THE GOVERNMENT I TA NO. 1651/H YD/20 14 M/S. NAVAYUGA QUAZIGUND EXPRESSWAY (P)LIMITED HYDERABAD 2 ACCOUNT. THERE WAS, HOWEVER, DELAY IN THE SAID REMITTANCE, FOR WHICH, ACCORDING TO THE ASSESSING OFFICER, INTEREST OF RS.32,28,121 WAS PAYABLE BY THE ASSESSEE UNDER S.201(1A). SINCE INTEREST UNDER S.201(1A) ONLY TO THE EXTENT OF RS. 17,84,625 WAS PAID BY THE ASSESSEE, THE ASSESSING OFFICER PASSED THE ORDER DATED 23.11.2013, TREATING THE ASSESSEE AS LIABLE FOR PAYMENT OF BALANCE INTEREST UNDER S.201(1A) AMOUNTING TO RS.14,43,496. 3. AGAINST THE ORDER PASSED BY THE ASSESSING OFFICER UNDER S.201(1)/201(1A), AN APPEAL WAS PREFERRED BY THE ASSESSING OFFICER BEFORE THE LEARNED CIT(A). DURIN G THE COURSE OF APPELLATE PROCEEDINGS BEFORE THE LEARNED CIT(A), IT WAS CONTENDED ON BEHALF OF THE ASSESSEE THAT INTEREST UNDER S.201(1A) WAS COMPUTED BY THE ASSESSING OFFICER BY CONSIDERING PART OF THE CALENDAR MONTH AS FULL MONTH, WHEREAS SUCH INTEREST W AS CHARGEABLE BY TAKING THE MONTH AS A PERIOD OF 30 DAYS. THE FOLLOWING EXAMPLE WAS ALSO GIVEN BY THE ASSESSEE TO SUPPORT AND SUBSTANTIATE ITS STAND. IF WE TAKE THE FIRST TRANSACTION AS AN EXAMPLE: DATE OF PAYMENT - 04.04.2011 DUE DATE OF REM ITTANCE - 07.05.2011 ACTUAL DATE OF REMITTANCE - 01.06.2011 (C) THE ASSESSING OFFICER CHARGED INTEREST FOR THREE CALENDAR MONTHS AS UNDER: 05.05.2011 TO 30.04.2011 - ONE MONTH 01.05.2011 TO 31.05.2011 - ONE MONTH 01.06.2011 - ONE MONTH (D) THE APPELLANTS VERSION IS SICNE THE INTEREST IS COMPENSATORY IN NATURE, WHICH IS LEVIED ON LATE REMITTANCE OF TAX DEDUCTED, THE BASIS SHOULD BE A MONTH OF 30 DAYS PERIOD AS UNDER: 05.04.2011 TO 30.04.2011 - ONE MONTH 05.05.2011 TO 01.06.2011 - ONE MONTH TOTAL TWO MONTHS I TA NO. 1651/H YD/20 14 M/S. NAVAYUGA QUAZIGUND EXPRESSWAY (P)LIMITED HYDERABAD 3 4. THE LEARNED CIT(A) DID NOT FIND MERIT IN THE CONTENTION S RAISED BY THE ASSESSEE AND RELYING ON RULE 119A(B) OF INCOME - TAX RULES, 1962, SHE CONFIRMED THE LEVY OF INTEREST UNDER S.201(1 A) AS COMPUTED BY THE ASSESSING OFFICER FOR THE FOLLOWING REASONS GIVEN IN PARAGRAPH NO.3.5 TO 3.7 OF HER IMPUGNED ORDER. 3.5 AS PER RULE 119A(B) THE INTEREST IS TO BE CALCULATED FOR EVERY MONTH AND ANY FRACTION OF THE MONTH SHALL BE DEEMED TO EB FULL MONTH. IT IS ALSO PERTINENT TO MENTION THAT UNDER S.244A, TH E INCOM E TAX DEPARTMENT PAYS INTEREST TO THE ASSESSEE, THE INTEREST IS TO BE CALCULATED ON REFUND AS PER RULE 119A, THEREFORE, EVEN THOUGH THE RATE OF INTEREST COLLECTED BY THE DEPARTMENT AND PAID BY THE DEPARTMENT VARY, THE PERIOD CONSIDERED. FOR COMPUTING THE I NTEREST IS SAME IN BOTH THE CASES, WHEN THE DEPARTMENT IS COLLECTING AS WELL AS WHEN THE DEPARTMENT IS PAYING THE INTEREST. MOREOVER, IT IS PERTINENT TO MENTION THAT CHAR GING OF INTEREST U /S S.201( 1 A) IS MANDATORY AND IS SYSTEM GENERATED. 3.6 THE ASSESSING OFFICER CLEARLY HELD IN HIS ORDER DATED 29.11.2013 THAT THERE WAS DELAY IN REMITTANCE, OF T DS DEDUCTED THEREFORE, INTEREST U/ S.201(LA) WAS CHARGED. IN EFFECT THE ASSESS ING OFFICER HAS CLEARLY MENTIONED AS TO WHY HE IS CHARGING INTEREST U / S . 201( 1 A). THEREFORE, THERE IS NO MERIT IN APPELLANT'S CONTENTION THAT THE ORDER IS NOT A SPEAKING ORDER. FURTHER, THERE IS NO MERIT IN SAYING THAT THE ASSESSING OFFICER DID NOT SPECIFY THE METHOD OF CALCULATION OF INTEREST U / S. 201(1A). THIS CALCULATION SHEET, THE ASSESSEE COULD HAVE EASILY OBTAINED FROM THE ASSESSING OFFICE R BY MAKING A REQUEST. IT IS PERTINENT TO MENTION THAT THE APPELLANT HIMSELF PRODUCED A COPY OF INTEREST CALCULATION U/S 201( 1 A) AS MENTIONED AT PARA 3.1(A). 3.7 IN VIEW OF THE ABOVE DISCUSSION, THE MONTH REFERRED IN RULE 119A REFERS TO CALENDAR MONTH AND NOT A PERIOD OF 30 DAYS AS ASSUMED BY THE APPELLANT. AGGRIEVED BY THE ORDER OF THE LEARNED CIT(A), THE ASSESSEE HAS PREFERRED HIS APPEAL BEFORE THE TRIBUNAL. I TA NO. 1651/H YD/20 14 M/S. NAVAYUGA QUAZIGUND EXPRESSWAY (P)LIMITED HYDERABAD 4 5 . WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. THE ISSUE INVOLVED IN THIS APPEAL RELATES TO THE COMPUTATION OF INTEREST PAYABLE BY THE ASSESSEE UNDER S.201(1A), THE PROVISIONS OF WHICH READ AS UNDER - 201. (1) (1A) WITHOUT PREJUDICE TO THE PROV I SIONS OF SUB - SECTION (1), IF ANY SUCH PERSON, PR INCIPAL OFFI C ER OR COMPANY AS IS REFERRED TO IN TH AT SUB - SEC T ION DOES NO T DEDUCT THE WHOL E OR ANY PAR T OF THE TAX OR AFTER DEDU C TI O N FAILS TO PAY THE TAX AS REQUIRED BY OR UN D ER THIS ACT, HE OR IT SHALL BE LIABLE TO PAY SIMPLE INTEREST, - ( I ) AT ON E PERCENT FOR EVERY MONTH OR PART OF A MONTH ON THE AMOUNT OF SUCH TAX FROM THE D A TE ON WHI C H SUCH TAX WAS DEDUCTIBLE TO THE DATE ON WHICH SUCH TAX IS DEDUCTED; AND ( II ) AT ONE AND ONE - HALF PER CENT FOR EVERY MONTH OR PART O F A MONTH ON THE AMOUNT OF SUCH TAX FROM THE DATE ON WHI C H SUCH TAX WAS D E DUCTED TO THE DATE ON WHI C H SUCH TAX IS ACTUALLY PAID ; A ND SUCH INTEREST SHALL BE PAID BEFORE FURNI S HIN G TH E STATEMENT IN ACCORDANCE WITH THE P R O V I SI ON S OF SUB - SEC T ION (3) OF SECTIO N 200; PROVIDED THAT IN CASE ANY PERSON, INCLUDING THE PR I N C IPAL OFFICER OF A COMPANY FAILS TO DEDUCT THE WHOLE OR ANY PART OF THE TAX IN ACCORDANC E WITH THE P R O V I SI ON S OF THI S CHAPTER ON TH E SUM PAID TO A RESIDENT OR ON THE SUM CREDITED TO THE AC C OUN T O F A RESIDENT BUT IS NO T DEEMED TO B E AN ASSESSEE IN DEFAULT UN D ER THE FIRST PROVISO TO SUB - SECTION (1), THE IN T ER E ST UN D E R CLAUSE (I) SHALL BE PAYABL E F R O M THE D ATE ON WHI C H SUCH TAX WAS DE DU CTIBLE TO THE DATE OF FURNI S HIN G OF RETURN OF INCOME BY SUCH RESIDENT: THE PROCEDURE TO BE FOLLOWED FOR CALCULATING THE INTEREST PAYABLE BY THE ASSESSEE OR BY THE CENTRAL GOVERNMENT IS GIVEN IN RULE 119A OF INCOME - TAX RULES, 1962 AS UNDER - I TA NO. 1651/H YD/20 14 M/S. NAVAYUGA QUAZIGUND EXPRESSWAY (P)LIMITED HYDERABAD 5 119A. IN CAL C ULATIN G T H E I N TEREST PAYABLE BY THE ASSESSEE OR T H E IN T EREST PAYABLE BY THE C E NTRAL GOVERNMENT TO THE ASSESSEE UNDER ANY PROVISION S OF THE ACT - ( A) WHERE INTEREST IS TO BE CALCULATED ON ANNUAL BASIS, THE PERIOD FOR WHICH SUCH INTEREST IS TO BE CALCULATED SHALL BE ROUND E D OFF TO A WHOLE MONTH OR MONTHS AND FOR THIS PURP O SE ANY FRACTION O F CL MONTH SH A LL BE IGNOR E D; AND THE PERIOD S O ROUNDED OFF S HALL B E D EE M E D TO B E THE P E RI O D I N RESP EC T O F WH I CH TH E INTER ES T I S T O BE CAL C ULA T E D ; (B) WHER E THE INTERE S T I S T O BE CA LCULATED FOR E VERY M O NTH OR PART O F A MONTH COMPRISED IN A P ER IOD, ANY F R A CT I O N OF A M ONTH SHALL B E DE E MED T O BE A FULL MONTH AND TH E INTEREST SHALL BE SO CALCU L ATED ; (C) THE AM O UNT OF TAX , PE NALTY OR O TH E R SUM I N R E SP E CT OF WH I CH SUCH INTEREST IS TO BE CALCULATED SHALL B E ROUNDED OFF TO THE NEAR E ST MULTIPL E OF ONE HUNDRED RUPEES AND FOR THIS PURPOSE ANY FRACTION OF ON E HUNDRED RUPEES SHALL BE IGNORED AND THE AMOUNT S O ROUNDED OFF SHALL BE DEEMED T O BE THE A MOUNT IN RESPECT OF WH IC H THE INTEREST IS TO B E CALCULAT E D . 6. IN THE PRESENT CASE, CLAUSE ( II ) OF S.201( 1A) READ WITH CLAUSE (B) OF RULE 119A IS APPLICABLE AND IT PROVIDES THAT WHERE THE INTEREST IS TO BE CALCULATED FOR EVERY MONTH OR PART OF A MONTH COMPRISED IN A PERIOD, ANY FRACTION OF A MONTH SHALL BE DEEMED TO BE A FULL MONTH, AND THE INTEREST SHALL BE SO CALCULATED. THE DISPUTE IN THIS CONTEXT AS INVOLVED IN THE PRESENT CASE IS WHETHER THE MONTH FOR SUCH CALCULATION OF INTEREST IS TO BE TAKEN AS A BRITISH CALENDAR MONTH OR A PERIOD OF 30 DAYS. IT IS OBSERVED THAT SIMILAR CONTROVERSY HA D ARISEN IN T HE CASE OF CIT V/S. ARVIND MILLS LIMITED (2011)16 TAXMAN.COM.291 (GUJ), WHEREIN THE ASSESSEE CLAIMED INTEREST UNDER S.244A ON THE BASIS OF BRITISH CALENDAR MONTH. THE CLAIM OF THE ASSESSEE , ALTHOUGH WAS NOT ALLOWED BY THE ASSESSING OFFICER AS WELL AS THE L EARNED CIT(A), THE TRIBUNAL ALLOWED THE SAME . W HEN THE MATTER WAS CARRIED BEFORE THE HONBLE GUJ A RAT HIGH COURT IN AN APPEAL FILED BY THE REVENUE, THEIR LORDSHIPS I TA NO. 1651/H YD/20 14 M/S. NAVAYUGA QUAZIGUND EXPRESSWAY (P)LIMITED HYDERABAD 6 HELD THAT A READING OF SUB - SECTION (1) OF S.244A, THE RELEVANT PROVISIONS OF WHICH ARE AN ALOGOUS TO THE PROVISIONS OF CLAUSE ( II ) OF S.201(1A) READ WITH RULE 119A, WOULD MAKE IT CLEAR THAT THE TERM MONTH MUST BE GIVEN THE ORDINARY MEANING OF THE TERM OF 30 DAYS PERIOD AND NOT THE BRITISH CALENDAR MONTH AS DEFINED IN S.3(35) OF THE GENERAL CLAUSES ACT. IT WAS HELD THAT THE DEFINITION GIVEN IN GENERAL CLAUSES ACT CANNOT BE ADOPTED FOR THE PURPOSES OF SUB - SECTION (1) OF S.244A AS SUCH IMPORTATION OF THE DEFINITION WOULD LEAD TO ANOMALOUS SITUATION. IN OUR OPINION, THE RATIO OF THE DECISION O F THE HONBLE GUJARAT HIGH COURT IN THE CASE OR CIT V/S. ARVIND MILLS LIMITED (SUPRA) IS SQUARELY APPLICABLE IN THE PRESENT CASE, AND THERE BEING NO DECISION CITED BY THE LEARNED DEPARTMENTAL REPRESENTATIVE OF ANY HIGH COURT TAKING A CONTRARY VIEW , W E RE SPECTFULLY FOLLOW THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF ARVIND MILLS LIMITED (SUPRA) AND DIRECT THE ASSESSING OFFICER TO RECOMPUTE THE INTEREST PAYABLE UNDER S.201(1A) BY TAKING A PERIOD OF 30 DAYS AS A MONTH INSTEAD OF BRITISH CALE NDAR MONTH. 7 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 13 TH MARCH, 2015 SD/ - SD/ - ( ASHA VIJAYARAGHAVAN ) ( P.M.JAGTAP ) JUDICIAL MEMBER ACCOUNTANT MEMBER D T/ - 13 TH MARCH, 201 5 COPY FORWARDED TO: 1. M/S. NAVAYUGA QUAZIGUND EXPRESSWAY (P)LIMITED PLOT NO.379, ROAD NO.10, JUBILEE HILLS, HYDERABAD 500 033 2 . DY. COMMISS IONER OF INCOME - TAX CIRCLE 15(1), HYDERABAD I TA NO. 1651/H YD/20 14 M/S. NAVAYUGA QUAZIGUND EXPRESSWAY (P)LIMITED HYDERABAD 7 3. COMMISSIONER OF INCOME - TAX(APPEALS) II HYDERABAD 4. COMMISSIONER OF INCOME - TAX TDS , HYDERABAD 5. DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD. B.V.S