ACIT Circle 1 , Tirunelveli V. V.Sivasubramanian , Tirunelveli

ITA 1940/CHNY/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 5171 (ITAT-CHENNAI)
• Duration Of Justice: 9 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 09-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 153A; 234B; 147; 263; 90; 154; 15

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . . . , . !'# ! , % !& BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NOS.1939, 1940, 1941 & 1942/CHNY/2017 ( )( / ASSESSMENT YEARS : 2005-06, 2008-09, 2009-10 & 201 0-11 THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE -1, NELLAI CITY CENTRE, RAHMATH NAGAR, TIRUNELVELI. V. SHRI V. SIVASUBRAMANIAN, PROP. SANTHI SWEETS, TIRUNELVELI JUNCTION PAN : ADLPS 1831 P (+,/ APPELLANT) (-.+,/ RESPONDENT) +, / 0 / APPELLANT BY : SMT. RUBY GEORGE, CIT -.+, / 0 / RESPONDENT BY : SHRI Y. SRIDHAR, CA 1 / 2% / DATE OF HEARING : 24.05.2018 3') / 2% / DATE OF PRONOUNCEMENT : 31.05.2018 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: ALL THE FOUR APPEALS OF THE REVENUE ARE DIRECTED AGAINST THE COMMON ORDER PASSED BY THE COMMISSIONER OF INCOME T AX (APPEALS) -19, CHENNAI, DATED 01.05.2017 PERTAINING TO ASSESSMENT YEARS 2005-06, 2008-09, 2009-10 AND 2010-11. SINCE COMMON ISSUE ARISES FOR CONSIDERATION IN ALL THESE APPEALS , WE HEARD THESE APPEALS TOGETHER AND DISPOSING OF THE SAME BY THIS COMMON ORDER. 2 I.T.A. NOS.1939 TO 1942/CHNY/17 2. THE ONLY ISSUE ARISES FOR CONSIDERATION IN THESE APPEALS IS CHARGING OF INTEREST UNDER SECTION 234B(3) OF THE I NCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). 3. SMT. RUBY GEORGE, THE LD. DEPARTMENTAL REPRESENT ATIVE, SUBMITTED THAT THE ASSESSING OFFICER ORIGINALLY CHA RGED INTEREST UNDER SECTION 234B(1) OF THE ACT INSTEAD OF SECTION 234B(3) OF THE ACT. SUBSEQUENTLY, BY AN ORDER UNDER SECTION 154 O F THE ACT, ACCORDING TO THE LD. D.R., THE ASSESSING OFFICER RE CTIFIED THE SAME AND LEVIED INTEREST UNDER SECTION 234B(3) OF THE AC T. ON APPEAL BY THE ASSESSEE, THE CIT(APPEALS) FOUND THAT INTEREST UNDER SECTION 234B OF THE ACT IS CHARGEABLE ON THE RETURNED INCOM E FROM FIRST DAY OF THE ASSESSMENT YEAR TILL THE DATE OF ORDER UNDER SECTION 143(1) OF THE ACT, THEREFORE, THE ASSESSEE IS LIABLE FOR INTE REST UNDER SECTION 234B ON THE ASSESSED INCOME OVER AND ABOVE THE RETU RNED INCOME FROM THE DATE OF INTIMATION UNDER SECTION 143(1) OF THE ACT TILL THE DATE OF ASSESSMENT UNDER SECTION 153A OF THE ACT. REFERRING TO THE SECTION 234B OF THE ACT, THE LD. D.R. SUBMITTED THA T WHERE THERE WAS NO ASSESSMENT ORDER, THE ORDER PASSED UNDER SEC TION 153A OF THE ACT SHALL BE REGARDED AS REGULAR ASSESSMENT FOR THE PURPOSE OF LEVYING INTEREST UNDER SECTION 234B OF THE ACT. TH EREFORE, 3 I.T.A. NOS.1939 TO 1942/CHNY/17 ACCORDING TO THE LD. D.R., THE INTEREST SHALL BE CA LCULATED ON THE AMOUNT ON WHICH THE INTEREST WAS PAYABLE IN RESPECT OF SHORTFALL IN PAYMENT OF ADVANCE TAX TO BE INCREASED AND THE ASSE SSEE SHALL BE LIABLE TO PAY SIMPLE INTEREST AT THE RATE OF 1% FOR EVERY MONTH OR PART OF A MONTH COMPRISED IN THE PERIOD COMMENCING ON FI RST DAY OF APRIL NEXT FOLLOWING SUCH FINANCIAL YEAR AND ENDING ON TH E DATE OF ASSESSMENT UNDER SECTION 153A OF THE ACT. SINCE TH E ASSESSMENT MADE UNDER SECTION 153A OF THE ACT IS A REGULAR ASS ESSMENT, ACCORDING TO THE LD. D.R., THE CIT(APPEALS) IS NOT JUSTIFIED IN DELETING THE INTEREST LEVIED BY THE ASSESSING OFFIC ER. 4. ON THE CONTRARY, SHRI Y. SRIDHAR, THE LD. REPRES ENTATIVE FOR THE ASSESSEE, SUBMITTED THAT THE ASSESSEE FILED THE RETURN IN THE REGULAR COURSE AND THE SAME WAS PROCESSED UNDER SEC TION 143(1) OF THE ACT AND INTIMATION WAS ALSO ISSUED. SUBSEQU ENTLY, ACCORDING TO THE LD. REPRESENTATIVE, THERE WAS A SEARCH IN TH E PREMISES OF THE ASSESSEE ON 16.01.2011. FOLLOWED BY THE SEARCH, TH E ASSESSMENT WAS FRAMED UNDER SECTION 153A OF THE ACT. ACCORDIN G TO THE LD. REPRESENTATIVE, THE ASSESSING OFFICER CALCULATED IN TEREST UNDER SECTION 234B(3) OF THE ACT. SUBSEQUENTLY, THE ASSE SSING OFFICER INITIATED RECTIFICATION PROCEEDING UNDER SECTION 15 4 OF THE ACT AND 4 I.T.A. NOS.1939 TO 1942/CHNY/17 CHARGED INTEREST UNDER SECTION 234B(1) OF THE ACT. ACCORDING TO THE LD. REPRESENTATIVE, THE ASSESSEE CHALLENGED THE ORD ER BEFORE THE CIT(APPEALS) CONTENDING THAT THE RECTIFICATION ORDE R PASSED BY THE ASSESSING OFFICER UNDER SECTION 154 OF THE ACT IS N OT JUSTIFIED. ACCORDING TO THE LD. REPRESENTATIVE, UNDER SECTION 234B(1) OF THE ACT, WHEN THE ASSESSEE FAILS TO PAY ADVANCE TAX IS LIABLE FOR SIMPLE INTEREST 1% FOR EVERY MONTH OR PART OF THE MONTH TI LL THE DETERMINATION OF TOTAL INCOME UNDER SECTION 143(1) OF THE ACT WHERE A REGULAR ASSESSMENT WAS MADE TILL THE DATE OF SUCH REGULAR ASSESSMENT ON THE AMOUNT EQUAL TO THE ASSESSED TAX. ACCORDING TO THE LD. REPRESENTATIVE, SECTION 234B OF THE ACT PRO VIDES FOR LEVY OF INTEREST ON THE INCOME ASSESSED OVER AND ABOVE THE RETURNED INCOME. ACCORDING TO THE LD. REPRESENTATIVE, THE I NTEREST CHARGEABLE AND THE ADDITION MADE BY THE ASSESSING O FFICER IS TILL THE DATE OF ASSESSMENT MADE UNDER SECTION 153A OF THE A CT AND THIS VIEW OF THE CIT(APPEALS) WAS SUPPORTED BY THE DECIS ION OF HYDERABAD BENCH OF THIS TRIBUNAL IN MBG COMMODITIES PVT. LTD. (77 TAXMANN.COM 353). THEREFORE, ACCORDING TO THE LD. REPRESENTATIVE, THE CIT(APPEALS) HAS RIGHTLY FOUND THAT THE ASSESSEE IS LIABLE FOR INTEREST UNDER SECTION 234B OF THE AC T ON THE ASSESSED INCOME OVER AND ABOVE THE RETURNED INCOME FROM THE DATE OF 143(1) 5 I.T.A. NOS.1939 TO 1942/CHNY/17 ORDER TILL THE DATE OF ASSESSMENT MADE UNDER SECTIO N 153A OF THE ACT. HENCE, ACCORDING TO THE LD. REPRESENTATIVE, T HE CIT(APPEALS) HAS RIGHTLY SET ASIDE THE ORDER PASSED BY THE ASSES SING OFFICER UNDER SECTION 154 OF THE ACT. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE ONLY ISSUE ARISES FOR CONSIDERATION IS LEVY OF INTEREST UNDER SECTION 234B OF THE ACT. THE ASSESSING OFFICER WHILE COMPLETING ASSESS MENT UNDER SECTION 153A OF THE ACT LEVIED INTEREST UNDER SECTI ON 234B(1) OF THE ACT. SUBSEQUENTLY, BY AN ORDER UNDER SECTION 154 O F THE ACT, HE LEVIED INTEREST UNDER SECTION 234B(3) OF THE ACT. THE CIT(APPEALS) FOUND THAT INTEREST UNDER SECTION 234B OF THE ACT H AS TO BE CHARGED TILL THE DATE OF INTIMATION UNDER SECTION 143(1) OF THE ACT. SUBSEQUENTLY, THE ASSESSEE IS LIABLE FOR INTEREST U NDER SECTION 234B OF THE ACT ON THE ASSESSED INCOME OVER AND ABOVE TH E RETURNED INCOME FROM THE DATE OF SECTION 143(1) OF THE ACT T ILL THE DATE OF ASSESSMENT ORDER. 6. WE HAVE CAREFULLY GONE THROUGH THE PROVISIONS OF SECTION 234B OF THE ACT, WHICH READS AS FOLLOWS:- 6 I.T.A. NOS.1939 TO 1942/CHNY/17 INTEREST FOR DEFAULTS IN PAYMENT OF ADVANCE TAX. 234B. (1) SUBJECT TO THE OTHER PROVISIONS OF THIS SECTI ON, WHERE, IN ANY FINANCIAL YEAR, AN ASSESSEE WHO IS LI ABLE TO PAY ADVANCE TAX UNDER SECTION 208 HAS FAILED TO PAY SUCH TA X OR, WHERE THE ADVANCE TAX PAID BY SUCH ASSESSEE UNDER TH E PROVISIONS OF SECTION 210 IS LESS THAN NINETY PER CE NT. OF THE ASSESSED TAX, THE ASSESSEE SHALL BE LIABLE TO PAY SI MPLE INTEREST AT THE RATE OF ONE PER CENT. FOR EVERY MON TH OR PART OF A MONTH COMPRISED IN THE PERIOD FROM THE 1ST DAY OF APRIL NEXT FOLLOWING SUCH FINANCIAL YEAR TO THE DATE OF DETERMINATION OF TOTAL INCOME UNDER SUB-SECTION (1) OF SECTION 143 AND WHERE A REGULAR ASSESSMENT IS MADE, T O THE DATE OF SUCH REGULAR ASSESSMENT, ON AN AMOUNT EQUAL TO THE ASSESSED TAX OR, AS THE CASE MAY BE, ON THE AMOUNT B Y WHICH THE ADVANCE TAX PAID AS AFORESAID FALLS SHORT OF THE ASSESSED TAX. EXPLANATION 1. IN THIS SECTION, ASSESSED TAX MEANS THE TAX ON THE TOTAL INCOME DETERMINED UNDER SUB-SECTION (1 ) OF SECTION 143 AND WHERE A REGULAR ASSESSMENT IS MADE, T HE TAX ON THE TOTAL INCOME DETERMINED UNDER SUCH REGULAR ASSESSMENT AS REDUCED BY THE AMOUNT OF, (I) ANY TAX DEDUCTED OR COLLECTED AT SOURCE IN ACCOR DANCE WITH THE PROVISIONS OF CHAPTER XVII ON ANY INCOME WHICH IS SUBJECT TO SUCH DEDUCTION OR COLLECTION AND WHICH I S TAKEN INTO ACCOUNT IN COMPUTING SUCH TOTAL INCOME ; (II) ANY RELIEF OF TAX ALLOWED UNDER SECTION 90 ON ACC OUNT OF TAX PAID IN A COUNTRY OUTSIDE INDIA ; (III) ANY RELIEF OF TAX ALLOWED UNDER SECTION 90A ON A CCOUNT OF TAX PAID IN A SPECIFIED TERRITORY OUTSIDE INDIA REFE RRED TO IN THAT SECTION ; (IV) ANY DEDUCTION, FROM THE INDIAN INCOME-TAX PAYAB LE, ALLOWED UNDER SECTION 91, ON ACCOUNT OF TAX PAID IN A COUNTRY OUTSIDE INDIA ; AND 7 I.T.A. NOS.1939 TO 1942/CHNY/17 (V) ANY TAX CREDIT ALLOWED TO BE SET OFF IN ACCORDAN CE WITH THE PROVISIONS OF SECTION 115JAA OR SECTION 115JD. EXPLANATION 2. WHERE IN RELATION TO AN ASSESSMENT YEAR, AN ASSESSMENT IS MADE FOR THE FIRST TIME UNDER SECTION 147 OR SECTION 153A, THE ASSESSMENT SO MADE SHALL BE REGARDE D AS A REGULAR ASSESSMENT FOR THE PURPOSES OF THIS SECTION . EXPLANATION 3. IN EXPLANATION 1 AND IN SUB-SECTION (3), TAX ON THE TOTAL INCOME DETERMINED UNDER SUB-SECTION (1 ) OF SECTION 143 SHALL NOT INCLUDE THE ADDITIONAL INCOME- TAX, IF ANY, PAYABLE UNDER SECTION 143. (2) WHERE, BEFORE THE DATE OF DETERMINATION OF TOTAL INCOME UNDER SUB-SECTION (1) OF SECTION 143 OR COMPLETION OF A REGULAR ASSESSMENT, TAX IS PAID BY THE ASSESSEE UNDE R SECTION 140A OR OTHERWISE, (I) INTEREST SHALL BE CALCULATED IN ACCORDANCE WITH THE FOREGOING PROVISIONS OF THIS SECTION UP TO THE DATE ON WHICH THE TAX IS SO PAID, AND REDUCED BY THE INTEREST, IF ANY, PAID UNDER SECTION 140A TOWARDS THE INTEREST CHARGEABLE UN DER THIS SECTION ; (II) THEREAFTER, INTEREST SHALL BE CALCULATED AT TH E RATE AFORESAID ON THE AMOUNT BY WHICH THE TAX SO PAID TOG ETHER WITH THE ADVANCE TAX PAID FALLS SHORT OF THE ASSESSE D TAX. (2A) (A) WHERE AN APPLICATION UNDER SUB-SECTION (1) OF SECTION 245C FOR ANY ASSESSMENT YEAR HAS BEEN MADE, THE ASSESS EE SHALL BE LIABLE TO PAY SIMPLE INTEREST AT THE RATE OF ONE PER CENT. FOR EVERY MONTH OR PART OF A MONTH COMPRISED IN THE PERIOD COMMENCING ON THE 1ST DAY OF APRIL OF SUCH A SSESSMENT YEAR AND ENDING ON THE DATE OF MAKING SUCH APPLICAT ION, ON THE ADDITIONAL AMOUNT OF INCOME-TAX REFERRED TO IN THAT SUB- SECTION ; (B) WHERE AS A RESULT OF AN ORDER OF THE SETTLEMENT COMMISSION UNDER SUB-SECTION (4) OF SECTION 245D FOR AN Y ASSESSMENT YEAR, THE AMOUNT OF TOTAL INCOME DISCLOS ED IN THE APPLICATION UNDER SUB-SECTION (1) OF SECTION 245C IS I NCREASED, 8 I.T.A. NOS.1939 TO 1942/CHNY/17 THE ASSESSEE SHALL BE LIABLE TO PAY SIMPLE INTEREST AT THE RATE OF ONE PER CENT. FOR EVERY MONTH OR PART OF A MONTH COMPRISED IN THE PERIOD COMMENCING ON THE 1ST DAY O F APRIL OF SUCH ASSESSMENT YEAR AND ENDING ON THE DATE OF SUCH ORDER, ON THE AMOUNT BY WHICH THE TAX ON THE TOTAL INCOME DETERMINED ON THE BASIS OF SUCH ORDER EXCEEDS THE TA X ON THE TOTAL INCOME DISCLOSED IN THE APPLICATION FILED UNDER SUB- SECTION (1) OF SECTION 245C ; (C) WHERE, AS A RESULT OF AN ORDER UNDER SUB-SECTIO N (6B) OF SECTION 245D, THE AMOUNT ON WHICH INTEREST WAS PAYABLE UNDER CLAUSE (B) HAS BEEN INCREASED OR REDUCED, AS THE CASE MAY BE, THE INTEREST SHALL BE INCREASED OR REDUCED ACCORDINGLY. (3) WHERE, AS A RESULT OF AN ORDER OF REASSESSMENT O R RECOMPUTATION UNDER SECTION 147 OR SECTION 153A, THE AM OUNT ON WHICH INTEREST WAS PAYABLE IN RESPECT OF SHORTFA LL IN PAYMENT OF ADVANCE TAX FOR ANY FINANCIAL YEAR UNDER SUB- SECTION (1) IS INCREASED, THE ASSESSEE SHALL BE LIA BLE TO PAY SIMPLE INTEREST AT THE RATE OF ONE PER CENT. FOR EV ERY MONTH OR PART OF A MONTH COMPRISED IN THE PERIOD COMMENCI NG ON THE 1ST DAY OF APRIL NEXT FOLLOWING SUCH FINANCIAL Y EAR AND ENDING ON THE DATE OF THE REASSESSMENT OR RECOMPUTA TION UNDER SECTION 147 OR SECTION 153A, ON THE AMOUNT BY WHI CH THE TAX ON THE TOTAL INCOME DETERMINED ON THE BASIS OF THE REASSESSMENT OR RECOMPUTATION EXCEEDS THE TAX ON THE TOTAL INCOME DETERMINED UNDER SUB-SECTION (1) OF SECTION 143 OR ON THE BASIS OF THE REGULAR ASSESSMENT AS REFERRED TO IN SUB- SECTION (1), AS THE CASE MAY BE. (4) WHERE, AS A RESULT OF AN ORDER UNDER SECTION 154 O R SECTION 155 OR SECTION 250 OR SECTION 254 OR SECTION 260 OR SECTION 262 OR SECTION 263 OR SECTION 264 OR AN ORDER OF THE SETTLEMENT COMMISSION UNDER SUB-SECTION (4) OF SECTI ON 245D, THE AMOUNT ON WHICH INTEREST WAS PAYABLE UNDER S UB- SECTION (1) OR SUB-SECTION (3) HAS BEEN INCREASED OR REDUCED, AS THE CASE MAY BE, THE INTEREST SHALL BE INCREASED OR REDUCED ACCORDINGLY, AND 9 I.T.A. NOS.1939 TO 1942/CHNY/17 (I) IN A CASE WHERE THE INTEREST IS INCREASED, THE ASSESSING OFFICER SHALL SERVE ON THE ASSESSEE A NOTICE OF DEM AND IN THE PRESCRIBED FORM SPECIFYING THE SUM PAYABLE AND SUCH NOTICE OF DEMAND SHALL BE DEEMED TO BE A NOTICE UNDER SECT ION 156 AND THE PROVISIONS OF THIS ACT SHALL APPLY ACCORDIN GLY ; (II) IN A CASE WHERE THE INTEREST IS REDUCED, THE E XCESS INTEREST PAID, IF ANY, SHALL BE REFUNDED. (5) THE PROVISIONS OF THIS SECTION SHALL APPLY IN RE SPECT OF ASSESSMENTS FOR THE ASSESSMENT YEAR COMMENCING ON T HE 1ST DAY OF APRIL, 1989, AND SUBSEQUENT ASSESSMENT YEARS. 7. THE QUESTION ARISES FOR CONSIDERATION IS WHETHER THE LEVY OF INTEREST UNDER SECTION 234B(1) OR 234(3) OF THE ACT CAN BE A SUBJECT MATTER OF PROCEEDING IN SECTION 154 OF THE ACT? IT IS OBVIOUS THAT SECTION 154 OF THE ACT IS TO RECTIFY AN ERROR WHICH IS ON THE FACE OF THE RECORD. WHETHER SECTION 234B(1) APPLIES OR 234 B(3) APPLIES NEEDS AN INTERPRETATION. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THIS IS BEYOND THE SCOPE OF PROCEEDING UNDER SECTION 154 OF THE ACT. AS OBSERVED EARLIER, THE PROCEEDING UNDER SECTION 154 OF THE ACT IS ONLY TO RECTIFY AN ERROR WHICH IS APPARENT ON THE FACE OF RECORD. THEREFORE, INTERPR ETATION OF THE PROVISIONS OF THE ACT, WHICH IS A DEBATABLE ONE, CA NNOT BE SUBJECT MATTER OF PROCEEDING UNDER SECTION 154 OF THE ACT. HENCE, THIS TRIBUNAL DO NOT FIND ANY REASON TO INTERFERE WITH T HE ORDER OF THE LOWER AUTHORITY AND ACCORDINGLY THE SAME IS CONFIRM ED. 10 I.T.A. NOS.1939 TO 1942/CHNY/17 8. IN THE RESULT, ALL THE APPEALS OF THE REVENUE ST AND DISMISSED. ORDER PRONOUNCED ON 31 ST MAY, 2018 AT CHENNAI. SD/- SD/- (. !'# ! ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) % / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 5 /DATED, THE 31 ST MAY, 2018. KRI. / -267 87)2 /COPY TO: 1. +, /APPELLANT 2. -.+, /RESPONDENT 3. 1 92 () /CIT(A)-19, CHENNAI-34 4. PRINCIPAL CIT, CENTRAL-2, CHENNAI. 5. 7: -2 /DR 6. ;( < /GF.