The Peerless Gen.Fin.& Inv. Co. Ltd., Kolkata V. ACIT, Circle - 3, Kolkata, Kolkata

ITA 1706/KOL/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3151 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 6 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-07-2013
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: 2002-2003
• Appeal Filed On: 13-12-2011
• Court: TRIBUNAL
• Department Lawyers: TAPAS KR DUTTA
• Assessee Lawyers: S K TULSIYAN
• Section: 143(3); 244A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH B KOLKATA BEFORE SHRI, N.S. SAINI, ACCOUNTANT MEMBER AND SHRI MAHAVIR SINGH, JUDICIAL MEMBER ITA NO. 1706 / KOL / 2011 ASSESSMENT YEAR :2002-03 THE PEERLESS GENERAL FINANCE & INVESTMENT CO. LTD. 3, ESPLANADE EAST, KOLKATA 700 069 [ PAN NO.AABCT 3043 L ] V/S . A.C.I.T., CIRCLE-3, KOLKATA, DWARLY HOUSE, 8/2, ESPLANADE EAST, KOLKATA 700 069 /APPELLANT .. / RESPONDENT /BY APPELLANT SHRI S.K.TULSIYAN, AR /BY RESPONDENT SHRI TAPAS KR. DUTTA, CIT-DR /DATE OF HEARING 13-06-2013 /DATE OF PRONOUNCEMENT 11-07-2013 / // / O R D E R PER MAHAVIR SINGH, JUDICIAL MEMBER:- THIS APPEAL FILED BY THE ASSESSEE IS ARISING OUT T HE ORDER OF COMMISSIONER OF INCOME-TAX (APPEALS)-I, KOLKATA (C IT(A) FOR SHORT) IN APPEAL NO.67/CIT(A)-I/CIRCLE-3/08-09 DATED 02-11-20 11. THE ASSESSMENT WAS FRAMED BY DCIT, CIRCLE-3, KOLKATA U/S.154/154/1 54/251/143(3) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS T HE ACT) VIDE HIS ORDER DATED 30-06-2008 FOR ASSESSMENT YEAR (AY) 2002-03. ITA NO.1706/KOL/2011 A.Y. 2002-03 THE PEERLESS GEN.FIN.& INV. CO.LTD. V. ACIT CIR-3 KOL PAGE 2 2. THE ONLY ISSUE IN THIS APPEAL OF ASSESSEE IS AGA INST THE ORDER OF CIT(A) CONFIRMING THE ACTION OF ASSESSING OFFICER (AO) RECTIFYING THE MISTAKE VIDE ORDER PASSED U/S. 251/154/154/154/251/ 143(3) OF THE ACT DATED 22-04-2008 BY WHICH NTEREST ON UNPAID INTEREST ALRE ADY GRANTED TO HIM. BY THIS, THE ASSESSEE HAS RAISED FOLLOWING TWO GROUNDS :- 1. THAT, SINCE THERE WAS NO APPARENT MISTAKE IN TH E ORDER PASSED U/S. 251/154/154/154/251/143(3) DT. 22.4.08, THE LD. AO ERRED IN RECTIFYING THE SAID ORDER IN TERMS OF SEC. 1154 OF THE I.T. ACT AN D PASSING A REVISED ORDER DT. 30.6.08 IN WHICH HE WRONGLY WITHDREW INTEREST O N UNPAID INTEREST ALREADY GRANTED BY HIM TO THE APPELLANT AS PER HIS ORDER DT .22.4.08 AND THE LD. CIT(A) WAS NOT JUSTIFIED IN UPHOLDING THE SAID REVI SED ORDER 30.6.08. 1.(A) THAT, THE LD. CIT(A) ERRED IN IGNORING THE AP PELLANTS WRITTEN SUBMISSION DT. 24.11.11 FILED BEFORE HIM AS REPRODU CED IN PARA-4 OF HIS APPELLATE ORDER AND FAILED TO CANCEL THE LD. AOS O RDER DT. 30.6.08 AND RESTORE HIS EARLIER ORDER DT. 22.4.08. 2. THAT, THE LD.CIT(A) ERRED IN UPHOLDING THE AOS ORDER U/S. 154/154/154/251143(3) OF THE I.T. ACT DT. 30.6.08 I N WHICH HE FAILED TO GRANT INTEREST ON UNPAID INTEREST IN TERMS OF SEC. 244A O F THE I.T. ACT. 3. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE FIELD ITS RETURN OF INCOME ON 30-10-2002 FOR AY 2002-03 WHICH WAS PROCESSED U/S. 143(1)(A) OF THE ACT ON 20-03-2003. SUBSEQUENTLY, SCRUTINY ASSESSMENT U/ S. 143(3) OF THE ACT WAS COMPLETED. THE ASSESSEE PREFERRED APPEAL BEFORE VARIOUS AUTHORITIES AND FINALLY SETTLED VIDE CIT(A)S ORDER IN APPEAL N O. 80/CIT(A)/CIRCLE-3/07-08 VIDE WHICH THE ASSESSING OFFICER COMPUTED REFUND AT RS.2,42,18,259/- INCLUDING INTEREST U/S.44A OF THE ACT AT RS.67,47,1 10/-. THIS APPEAL ORDER OF CIT(A) WAS GIVEN APPEAL EFFECT VIDE DATED 22-04-200 8 U/S. 251/154/154/251/143(3) OF THE ACT. SUBSEQUENTLY, TH E AO FURTHER PASSED ORDER U/S. 154/154/154/251/143(3) OF THE ACT DATED 30-06-2008, THE IMPUGNED ORDER, BEFORE CIT(A), WHEREBY THE INTEREST GRANTED U/S. 244A OF THE ACT WAS WITHDRAWN BY OBSERVING AS UNDER:- WHEN THE REFUND BY ADJUSTMENT ON 26.09.06 THERE WA S NO EXCESS AMOUNT OF TDS & ADVANCE-TAX, THE QUESTION OF GRANTING INTE REST U/S. 244A(1) AFTER THAT DATE DOES NOT ARISE. AFTER ADJUSTING THE EXCES S AMOUNT OF REFUND OVER ITA NO.1706/KOL/2011 A.Y. 2002-03 THE PEERLESS GEN.FIN.& INV. CO.LTD. V. ACIT CIR-3 KOL PAGE 3 TDS & ADVANCE-TAX I.E. A FROM THE INTEREST DUE TO THE ASSESSEE I.E., B, THERE WILL BE NET REFUND OF RS.6,50,00,908/-/ 4. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE CIT( A), WHO WITHOUT A SPEAKING ORDER ADJUDICATED THE ISSUE VIDE PARA-5 AN D 5.1 OF HIS ORDER, WHICH READS AS UNDER:- 5. GROUND NO.1 AND 2 ARE GENERAL IN NATURE AND HEN CE DOES NOT REQUIRE ANY ADJUDICATION. GROUND NO.3 AND 4 ARE INTERRELATE D. THE ASSESSEE HAS SUBMITTED THAT:- I) THE AO HAS ERRED IN HOLDING THAT GRANT OF INTER EST ON UNPAID INTEREST WAS CONTRARY TO THE PROVISIONS OF SEC. 244 A(3) OF THE I.T. ACT. II) THE AO ERRED IN HOLDING THAT THE RATIO OF THE D ECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. NARENDRA DOSHI (254-ITR-606) AND SANDVIK ASIA LTD. VS. CIT (280-ITR-643) ARE NOT APPLICABLE WHILE GRANTING INTEREST U/S. 244A OF THE I.T. ACT IN VIEW OF THE PROVISIONS OF SEC. 244A(3) OF THE I.T. ACT. 5.1 I HAVE GONE THROUGH THE ORDER OF THE A.O THE AO HAS CALCULATED THE INTEREST US.244A OF THE INCOME TAX ACT, 1961 AFTER DETAILED DISCUSSION IN THE ORDER. THE APPELLANT HAS SUBMITTED THAT THE AO HAD NOT GRANTED INTEREST U/S.244A ON UNPAID INTEREST WITHOUT SUSTAINING THE SAME. THUS, THE APPELLANT FAILS TO GET RELIEF ON THIS ISSUE. NOW, AGGRIEVED ASSESSEE CAME IN SECOND APPEAL BEFOR E US. 5. AT THE TIME OF HEARING, LD.COUNSEL FOR THE ASSES SEE FIRST TOOK A JURISDICTIONAL GROUND THAT GRANT OF INTEREST ON UNP AID INTEREST BY THE ASSESSING OFFICER VIDE HIS ORDER DATED 22-04-2008 W AS KEEPING IN VIEW THE DECISION OF THIS TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO.585/KOL/2006 DATED 28-02-2007 FOR AY 2000-01, WHEREIN HONBLE TR IBUNAL ALLOWED THE CLAIM OF ASSESSEE BY FOLLOWING JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF SANDVIK ASIA LTD. V. CIT AND OTHERS (2006) 280 ITR 643 (SC). ON THE OTHER HAND, LD. CIT-DR RELIED ON THE ORDERS OF THE AUTHORITIES BELOW. ITA NO.1706/KOL/2011 A.Y. 2002-03 THE PEERLESS GEN.FIN.& INV. CO.LTD. V. ACIT CIR-3 KOL PAGE 4 6. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT THE DICTUM IN THE CASE OF HONBLE SUPREME COURT IN THE CASE OF SANDVIK ASIA LTD. (SUP RA) AS UNDER:- THERE IS NO QUESTION OF THE DELAY BEING JUSTIFIAB LE AND EVEN IF THE REVENUE TAKEN AN ERRONEOUS VIEW OF THE LAW, THAT CA NNOT MEAN THAT THE WITHHOLDING OF MONIES IS JUSTIFIABLE OR NOT WRONGFUL . THERE IS NO EXCEPTION TO THE PRINCIPLE FOR AN ALLEGEDLY JUSTIFIABLE WITHHOLDING. WHEN THE CLAIMS OF THE AUTHORITY ARE FOUND TO BE UNSUSTA INABLE OR ERRONEOUS BY THE COURTS IT FOLLOWS THAT THE AUTHORITY HAS ACTED WRONGFULLY IN THE SENSE OF NOT IN ACCORDANCE WITH LAW AND COMPENSATION TO THE PARTY DEPRIVED MUST FOLLOW. AND FINALLY HONBLE SUPREME COURT ALLOWED THE INTER EST BY HOLDING AS UNDER:- HELD ACCORDINGLY, REVISING THE DECISION OF THE HIGH COU RT, THAT THE ASSESSEE WAS ENTITLED TO INTEREST ON THE AMOUNTS OF INTEREST PAID UNDER SECTION 214 AND/OR SECTION 244, AND THAT THE DEPART MENT WAS BOUND TO GRANT INTEREST WHICH HAD ACCRUED FOR THOSE PERIODS. BUT SINCE COUNSEL FOR THE ASSESSEE CONCEDED THAT INTEREST ON INTEREST SHO ULD BE PAID FROM MARCH 31,1986 TO MARCH 27, 1998, THE SU9PREME COURT GRANT ED INTEREST FOR THIS PERIOD BY WAY OF COMPENSATION, WHICH WAS TO BE AT N INE PER CENT. 7. EVEN ON MERITS, LD. COUNSEL FOR THE ASSESSEE NO W RELIED ON THE RECENT DECISION OF HONBLE MADHYA PRADESH HIGH COUR T IN THE CASE OF CIT V. H.E.G. LTD. (2009) 310 ITR 341 (MP) HAS HELD AS UNDER:- IN OUR OPINION, THE APPELLANT IS ENTITLED TO INTER EST UNDER SECTION 244 AND/OR SECTION 244A OF THE ACT IN ACCORDANCE WITH THE TERM S AND PROVISIONS OF THE SAID SECTIONS. IN CIT V. CHOLAMANDALAM INVESTMENT AND FINANCE CO. LTD. [2007] 284ITR 438 (MAD), IT WAS HELD AS UNDER ( HEADNOTE ): THAT IN VIEW OF THE EXPRESS PROVISIONS OF THE INCOME-TAX ACT, 1961, AN ASSESSEE WAS ENTITLED TO COMPENSATION BY W AY OF INTEREST FOR THE DELAY IN THE PAYMENT OF AMOUNTS LAWFULLY DU E TO THE ASSESSEE WHICH WERE WITHHELD WRONGLY AND CONTRARY TO LAW. TH E GOVERNMENT WAS LIABLE TO PAY INTEREST AT THE RATE APPLICABLE T O THE EXCESS AMOUNT REFUNDED TO THE ASSESSEE. ITA NO.1706/KOL/2011 A.Y. 2002-03 THE PEERLESS GEN.FIN.& INV. CO.LTD. V. ACIT CIR-3 KOL PAGE 5 IN VIEW OF THE9 AFORESAID ENUNCIATION OF LAW, WE AR E OF THE CONSIDERED OPINION THAT GRANT OF INTEREST ON INTEREST IS PERMI SSIBLE AND THE CHANGE IN THE PROVISION DOES NOT AFFECT THE SAME. 8. IN VIEW OF THE ABOVE, WE FIND THAT THE GROUND OF INTEREST ON UNPAID INTEREST BY THE AO VIDE HIS ORDER DATED 22.04.2008 IS KEEPING IN VIEW THE JUDGMENT OF THIS TRIBUNAL IN ITA NO. 585/K/2006 FOR THE AY 2000-01 DATED 28.02.2007 IN ITS OWN CASE EVEN THE DISPUTE REGARDI NG GRANT OF INTEREST ON UNPAID INTEREST IS COVERED BY THE DECISION OF HONB LE SUPREME COURT IN THE CASE OF SANDVIK ASIA LTD. (SUPRA). EVEN ON MERITS, HONBLE M.P. HIGH COURT IN THE CASE OF CIT VS. H.E.G LTD. (2009) 310 ITR 34 1 HAS HELD THAT THE PROVISIONS OF SECTION 244(1A) AND 244A ARE ALMOST S IMILAR AND IN CASE OF GRANTING OF INTEREST ON UNPAID INTEREST IS APPLICAB LE IN TERMS OF SECTION 244A OF THE ACT. THIS DECISION OF HONBLE M. P. HIGH CO URT IN THE CASE OF H.E.G. LTD. WAS APPROVED BY HONBLE SUPREME COURT BY DISMI SSING THE APPEAL OF THE DEPARTMENT AS REPORTED IN 324 ITR 331. IN SUC H CIRCUMSTANCES, WE ARE OF THE VIEW THAT THIS IS A DEBATABLE ISSUE AND ASSE SSING OFFICER HAS NO JURISDICTION TO EXERCISE POWER OF RECTIFICATION U/S .154 OF THE ACT. HENCE, ON JURISDICTIONAL ISSUE, WE ALLOW THE APPEAL OF THE AS SESSEE. 9. IN THE RESULT, ASSESSEES APPEAL STANDS ALLOWED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 11.07.201 3 SD/- SD/- (N.S.SAINI) (MAHAVIR SINGH) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) KOLKATA, PRONOUNCED BY *DKP SD/- (PRAMOD KUMAR) SD/- (MAHAVIR SINGH) A.M. J.M. !' #- 11 /07/2013 * ITA NO.1706/KOL/2011 A.Y. 2002-03 THE PEERLESS GEN.FIN.& INV. CO.LTD. V. ACIT CIR-3 KOL PAGE 6 ++, ++, ++, ++, -, -, -, -, / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. '/'+0 1 / CONCERNED CIT 4. 1- / CIT (A) 5. ,45 +++0, +0 , / DR, ITAT, KOLKATA 6. 589 :; / GUARD FILE. BY ORDER/ , +0 , *