RM.Vellayan, Coimbatore V. ITO, Coimbatore

ITA 1747/CHNY/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8079 (ITAT-CHENNAI)
• Duration Of Justice: 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-01-2017
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 14-12-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 09-06-2016
• Court: TRIBUNAL
• Department Lawyers: SHIVA SRINIVAS
• Assessee Lawyers: K RAGHUC A
• Keywords: Rectification of order
• Section: 143(3); 234B; 147; 148; 154; 139

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : CHENNAI , ! ' ! # . $% & '( BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY , JUDICIAL MEMBER ./ I.T.A.NO.1747/MDS./2016 / ASSESSMENT YEAR : 2010-11 MR.RM. VELLAYAN , 550/15,4 TH FLOOR, WHITES D.B.ROAD, R.S.PURAM, COIMBATORE 641 002. VS. THE ITO, WARD II(3), COIMBATORE. [PAN AAHPV 7111 Q ] ( )* / APPELLANT) ( +,)* /RESPONDENT) / APPELLANT BY : SHRI K.RAGHU,C.A /RESPONDENT BY : SHRI SHIVA SRINIVAS, JCIT D.R / DATE OF HEARING : 22 - 1 2 - 2016 / DATE OF PRONOUNCEMENT : 25 - 01 - 2017 - / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-2,COIMBAT ORE DATED 30.03.2015 PERTAINING TO ASSESSMENT YEAR 2010-11. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS FOR OUR ADJUDICATION. ITA NO.1747/16 :- 2 -: (I) THE LEARNED CIT(A) OUGHT TO HAVE HELD THAT INTE REST U/S 234C WAS NOT CHARGEABLE AT ALL, BY THE AO ON THE BASIS OF TAX D UE ON THE RETURNED INCOME, U/S 147 OF THE I.T.ACT, 1961, AS THERE WAS NO DEFERMENT OF ADVANCE TAX, READ WITH EXPLANATION TO SECTION 234C, THE A PPELLANT HAVING FURNISHED A RETURN U/S 139, ENTITLING HER TO A REFUND OF TAX, I N THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW. (2) THE LEARNED CIT(A), OUGHT TO HAVE HELD THAT T AX DUE ON THE RETURNED INCOME UNDER EXPLANATION TO SECTION 234C OF THE I. T.ACT, 1961, MEANS THE TAX CHARGEABLE ON THE TOTAL INCOME DECLARED IN THE RETURN FURNISHED BY THE APPELLANT U/S 139(1) OF THE ACT, AND NOT ON THE BA SIS OF A SECOND RETURN FILED IN RESPONSE TO THE NOTICE ISSUED U/S 148 OF T HE ACT, UNLESS SUCH RETURN WAS THE ONLY RETURN FURNISHED BY THE APPELLANT, FOR THE ASSESSMENT YEAR, IN THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW. () THE LEARNED CIT (A), IS WRONG IN HOLDING, THAT T HE APPELLANT IS LIABLE TO PAY ADVANCE TAX, ON THE BASIS OF THE TOTAL INCOME DECLA RED IN THE SECOND RETURN FURNISHED U/S 148, BY INTERPRETING THE MEANING OF T HE WORDS TAX DUE ON THE RETURNED INCOME, APPLICABLE IN RESPECT OF NOT ONLY THE RETURN FURNISHED U/S 139 (I) OF THE ACT, BUT ALSO IN RESPECT OF THE SECO ND AND SUBSEQUENT RETURNS, FURNISHED U/S 148, FOR THE SAME ASSESSMENT YEAR, IN THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW. (A.) FOR THESE AND OTHER ADDITIONAL GROUNDS OF APPE AL THAT MAY BE ADDUCED AT THE TIME OF HEARING, THE ORDER OF THE COMMISSION ER OF INCOME TAX (APPEALS)-2, COIMBATORE, IS OPPOSED TO LAW AND UNSU STAINABLE IN THE FACTS AND THE CIRCUMSTANCES OF THE CASE. 3. THE FACTS OF THE CASE ARE THAT THE AO REJECTED THE ASSESSEES APPLICATION FOR RECTIFICATION U/S.154 OF THE ACT WH EREIN THE ASSESSEE REQUESTED FOR RECTIFICATION OF MISTAKE IN CALCULATI ON OF INTEREST U/S.234B & 234C OF THE ACT. THE ASSESSEE FILED ORIGINAL RETURN OF INCOME U/S 1 39(1) ITA NO.1747/16 :- 3 -: ON 26.09.2010 DECLARING TOTAL INCOME OF RS.11,78,99 21-. THE RETURN WAS PROCESSED U/S 143(1) ON 27.04.2011 AND REFUND WAS G RANTED THROUGH REFUND VOUCHER DATED 27.04.2011. THEREAFTER, PURSUANT TO N OTICE U/S 148, THE ASSESSEE FILED RETURN OF INCOME ADMITTING HIGHER IN COME AT RS. 1,34,76,650/- ON 30.11.2013. THE AO PASSED REASSESSMENT ORDER U/S . 143(3) R.W.S. 147 ON 23.06.2014, ACCEPTING INCOME SHOWN IN THE RETURN FI LED IN RESPONSE TO NOTICE U/S 148. THE APPELLANT POINTED OUT MISTAKES IN COMP UTATION OF INTEREST U/S 234B AND 234C IN THIS ORDER AND FILED RECTIFICATION APPLICATION. ACCORDING TO THE ASSESSEE, INTEREST U/S 234B HAS TO BE CALCULATE D FROM 01.05.2011 I.E. THE MONTH FOLLOWING THE DATE OF PROCESSING OF ORIGINAL RETURN U/S 143(1) TILL THE DATE OF PAYMENT OF SELF ASSESSMENT TAX I.E. 0.11.20 13, WHICH WORKS OUT TO RS. 11,10,902/- AS AGAINST RS. 15,65,661/- LEVIED I N THE ORDER U/S 143(3) R.W.S. 147. THE OTHER MISTAKE, ACCORDING TO THE ASS ESSEE, IS IN COMPUTATION OF INTEREST U/S 234C AT RS. 1,28,448/- ON THE BASIS OF RETURN FILED IN RESPONSE TO NOTICE U/S 148 WHEREAS SUCH INTEREST AS PER THE ORIGINAL RETURN WAS NIL AND THE INCOME DECLARED IN THE ORIGINAL RETURN SHOULD A LONE BE THE BASIS FOR LEVYING INTEREST U/S 234C. THE AO HELD THAT BOTH TH E INTERESTS U/S 234B AND 234C HAVE BEEN CORRECTLY LEVIED AND REJECTED THE AP PLICATION FOR RECTIFICATION. THE AO HELD THAT INTEREST U/S. 234B IS CHARGEABLE F ROM 01 .04.2010 TILL THE DATE OF COMPLETION OF ASSESSMENT U/S 143(3) R.W.S. 147 ON 23.06.2014 FOLLOWING THE PROVISIONS OF 234B(1) AND THAT SUCH I NTEREST WAS CALCULATED IN THE SAID ORDER AFTER CONSIDERING THE SELF ASSESSMEN T TAX PAID ON 29.11.2013. THE AO ALSO CONTENDED THAT INTEREST U/S 234C WAS CO RRECTLY CALCULATED BASED ITA NO.1747/16 :- 4 -: ON THE TAX ON INCOME DECLARED IN THE RETURN OF INCO ME FURNISHED BY THE ASSESSEE ON 19.12.2013 IN RESPONSE TO NOTICE U/S 14 8. 3.1 AGGRIEVED, THE ASSESSEE CARRIED THE APPEAL BEF ORE THE LD.CIT(A). THE MAIN DISPUTE RAISED BY THE ASSESSEE BEFORE THE FIR ST APPELLATE AUTHORITY IS THAT THE AOS REJECTION TO RECTIFY THE MISTAKES IN COMPUTATION OF INTEREST U/S 234B AND 234C OF THE ACT. THE LD.CIT(A) OBSERVED TH AT THE ASSESSEE IS LIABLE FOR LEVY OF INTEREST U/S 234B AND 234C OF THE ACT. AGAINST THIS, THE ASSESSEE IS IN APPEAL BEFORE US. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. ORIGINALLY, THE ASSESSMENT ORDER WAS PASSED IN THIS CASE U/S.143(3) R.W.S.147 OF THE ACT DATED 23.06.2014 WHEREIN THE A O INTER ALIA LEVIED INTEREST U/S 234B AND 234C OF THE ACT. THE ASSESSEE FILED RECTIFICATION APPLICATION U/S.154 OF THE ACT DATED 21.07.2014 STA TING THAT LEVY OF INTEREST U/S.234C IS NOT PROPER. IN OUR OPINION, LEVY OF INT EREST U/S.234C IN THIS CASE IS VERY MUCH DEBATABLE U/S.154 OF THE ACT. THE DEBA TABLE ISSUE CANNOT BE DEALT UPON. IN OUR OPINION, SIMILAR ISSUE CAME UP FOR CONSIDERATION IN ITA NOS.765 TO 769/MDS./14 FOR ASSESSMENT YEARS 1990-91 ,1992-93,1994-95 & 1997-98 VIDE ORDER DATED 19.06.2015 WHEREIN TRIBUNA L HELD THAT :- 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL ON RECORD. ADMITTEDLY, THE INTEREST U/S.234D WAS C HARGED BY THE AO WHILE GIVING EFFECT TO THE ORDER OF THIS TRIBUNA L FOR THESE ASSESSMENT YEARS. THE ASSESSEE FILED PETITION U/S. 154 OF THE ACT SEEKING RECTIFICATION OF THE ORDER SAYING THAT THE AO HAS WRONGLY CHARGED THE INTEREST U/S.234D OF THE ACT WHILE GIVI NG EFFECT TO THE ITA NO.1747/16 :- 5 -: ORDER OF THIS TRIBUNAL AND IT IS A MISTAKE APPARENT ON RECORD. THEREFORE, THE LD. AR REQUESTED FOR RECTIFICATION O F THE ORDER PASSED U/S.154. 7. IN OUR OPINION, THE ISSUE SOUGHT TO BE RECTIFIED BY THE ASSESSEE U/S.154 IS A DEBATABLE ISSUE. THERE WERE CLEAVAGE OF OPINIONS BETWEEN JUDICIAL FORUMS, WHICH IS EVIDENT FROM CONSTITUTION OF SPECIAL BENCH BY THIS TRIBUNAL IN THE CASE OF ITO V. EKTA PROMOTERS (P.) LTD. 113 ITD V. 719 (SB). THE ASSES SEE NOT BEING CHALLENGED THE ORDER GIVING EFFECT TO THIS TRIBUNAL , CANNOT QUESTION THE SAME IN PROCEEDINGS U/S.154 OF THE ACT AND THE ISSUE IS A DEBATABLE ONE. HAD THE ASSESSEE ANY GRIEVANCE, IT COULD VERY WELL CHALLENGED THE REVISION ORDER GIVING EFFECT TO THIS TRIBUNALS ORDER. THE ASSESSEE FAILED TO AVAIL THE CORRECT REMEDY AVA ILABLE TO IT. IN OUR OPINION, THE ISSUE IS A DEBATABLE ONE AND IT IS NOT A MISTAKE APPARENT FROM THE RECORD. THERE IS NO MERIT IN THE ARGUMENT OF THE LD. AR. ACCORDINGLY, WE FOLLOW THE JUDGMENT OF THE SUPREME COURT IN THE CASE OF CIT V. KESHRI METAL P. LTD. (237 IT R 165), WHEREIN IT WAS OBSERVED THAT UNDER THE PROVISIONS OF SEC.154 O F THE ACT, THERE HAS TO BE A MISTAKE APPARENT FROM THE RECORD. IN O THER WORDS, A LOOK AT THE RECORD MUST SHOW THAT THERE HAS BEEN AN ERROR, AND THAT ERROR MAY BE RECTIFIED. REFERENCE TO DOCUMENTS OUT SIDE THE RECORDS AND THE LAW IS IMPERMISSIBLE WHEN APPLYING THE PROVISIONS OF SEC.154 OF THE ACT. HENCE, ALL THESE APPEALS A RE DISMISSED. ITA NO.1747/16 :- 6 -: IN VIEW OF THE ABOVE ORDER OF TRIBUNAL , WE ARE INC LINED TO DISMISS THE APPEAL OF ASSESSEE AND WITHOUT GOING INTO THE MERI T OF THE ISSUE RAISED BY THE ASSESSEE. 5. THE LD.A.R RELIED ON THE JUDGEMENT OF ALLAHABAD HIGH COURT IN THE CASE OF M/S.LENOLEUM HOUSE VS. ITO IN INCOME TAX APPEAL NO.128 OF 2004 DATED 04.10.2012, WHICH WAS NOT DEL IVERED IN THE CONTEXT OF LEVY OF INTEREST U/S.234B OF THE ACT IN PROCEEDINGS U/S.154 OF THE ACT AND IT IS RELATING TO LEVY OF INTEREST U /S.234B WHICH WAS PASSED BY AO U/S.254/251/143(3) OF THE ACT. HENCE, THE RATIO LAID DOWN BY THAT JUDGEMENT CANNOT BE APPLIED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS D ISMISSED. ORDER PRONOUNCED ON 25 TH JANUARY, 2017, AT CHENNAI. SD/ - SD/ - ! ' # . $ %& ' ( DUVVURU RL REDDY ) ) & / JUDICIAL MEMBER ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER () / CHENNAI *+ / DATED: 25 TH JANUARY, 2017. K S SUNDARAM +,-- ./-0/ / COPY TO: - 1 . / APPELLANT 3. - 1-!' / CIT(A) 5. /23- 4 / DR 2. / RESPONDENT 4. - 1 / CIT 6. 3&-5 / GF