Ess Kay International Exports, Amritsar. V. The Dy. Commissioner of Income Tax, Amritsar.

ITA 198/ASR/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9613 (ITAT-AMRITSAR)
• Duration Of Justice: 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 09-08-2016
• Assessment Year: 1999-2000
• Appeal Filed On: 11-04-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: TARN BANSAL
• Section: 244A; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. A.D. JAIN, JUDICIAL MEMBER AND SH. T.S. KAPOOR, ACCOUNTANT MEMBER ITA NOS. 198 TO 200(ASR)/2016 ASSESSMENT YEARS:1999-2000, 2001-02 & 2004-05 PAN: AAAFE5499B M/S. ESS KAY INTERNATIONAL EXPORTS VS. DY. COMMR. O F INCOME TAX, AMRITSAR. CIRCLE-V, AMRITSAR. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. TARN BANSAL, ADVOCATE RESPONDENT BY: SH. RAHUL DHAWAN, DR DATE OF HEARING: 09/08/2016 DATE OF PRONOUNCEMENT: 26/08/2016 ORDER PER A.D. JAIN, JM: THESE THREE APPEALS FILED BY THE ASSESSEE ARE AGA INST THE SEPARATE ORDERS OF CIT(A)-2, AMRITSAR, EACH DATED 25.02.2016 FOR THE ASSESSMENT YEARS 1999-2000, 2001-02 & 2004-05, RESPECTIVELY. A S THE ISSUE INVOLVED IN ALL THESE APPEALS IS COMMON, THEY ARE BEING DISP OSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. THE ASSES SEE HAS RAISED THE FOLLOWING COMMON EFFECTIVE GROUNDS IN ALL THE APPEA LS: 1. THAT THE LD. CIT(A) HAS WRONGLY ADJUDICATE THE GROUND NO.3 BY SAYING THE INTEREST ON LATE PAYMENT OF REFUND SH OULD BE ITA NOS.199 TO 200(ASR)/2016 A.YS. 1999-2000, 2001-02 & 2004-05 2 ALLOWED UPTO 21.03.2013, I.E., AS REQUESTED IN THE APPLICATION U/S 154 INSTEAD OF BE ALLOWED UPTO THE DATE OF DECI SION. 2. THAT THE LD. AO BE DIRECTED TO ALLOW INTEREST U/ S 244A OF THE SAID APPEAL EFFECT, UPTO THE DATE/MONTH OF ISSUING THE REFUND BY HIM. 2. THE FACTS OF THE CASE ARE THAT THE APPLICATION FOR RECTIFICATION U/S 154 HAD BEEN FILED BY THE ASSESSEE REQUESTING FOR INTEREST UNDER SECTION 244A FOR 3 MONTHS, WHICH WAS REJECTED BY THE AO. 3. THE LD. CIT(A) ALLOWED THE ASSESSEES APPEAL HOL DING AS FOLLOWS: 6. I HAVE CONSIDERED THE PENALTY ORDER AND THE WRIT TEN SIONS OF THE APPELLANT AND THE GROUNDS OF APPEAL ARE ED OFF HERE UNDER- (I) THE GROUND OF APPEAL NO. 1 AND 2 ARE AGAINST RE JECTION OF APPLICATION U/S 154 OF THE ACT. AS PER THE ORDER U/S 154 DATED 25-09-2013, THE APPE LLANT LAD FILED RECTIFICATION APPLICATION U/S 154 BEFORE THE AO SEEKING INTEREST U/S 244A FOR 3 MONTHS. THE ORDER OF CIT(A) U/S 250( 6) WAS RECEIVED BY THE AO ON 19-L1-2012 AND CONSEQUENTLY APPEAL EFF ECT HAS BEEN GIVEN VIDE ORDER DATED 26-12-2012 AND REFUND OF RS 245,503/- WAS WORKED OUT WHICH INCLUDED INTEREST U/S 244A OF RS 4 8,857/-. THE AO HELD IN THE ORDER U/S 154 DATED 25-09- 2013 THAT SINCE THE DUE INTEREST AS PER THE PROVISIONS OF SECTION 244A HAS BEEN GIVEN TO THE ASSESSEE UPTO THE DATE OF GIVING APPEAL EFFECT, SO NO FURTHER INTEREST AS PER LAW CAN BE ALLOWED TO THE ASSESSEE. THE AO H ELD THAT THE REFUND HAS NOT ARISEN AS A RESULT OF EXCESS TDS OR ADVANCE TAX MADE IN THIS CASE AND ACCORDINGLY THE APPLICATION U /S 154 WAS DISMISSED. IN THE APPEAL PROCEEDINGS, THE COUNSEL OF THE APPELLANT ARGUED. AS PER STATEMENT OF FACTS SUBMITTED ALONGWI TH, IT WAS STATED THAT THE CIT(A), PASSED ORDER DATED 07.11.2012 AY 1 999-2000 IN APPEAL NO. A-628/06-07 AND PARTLY ALLOWED THE APPE AL IN FAVOUR OF THE ASSESSEE. THE APPEAL EFFECT WAS GIVEN AND ON 26 -12-2012 AND DEPARTMENT ISSUED THE CHEQUE DATED 21-03-2013 OF RS 245,503/- WHICH INCLUDED U/S 244A OF RS 48,857/-. THE ASSESSE E FILED ITA NOS.199 TO 200(ASR)/2016 A.YS. 1999-2000, 2001-02 & 2004-05 3 RECTIFICATION U/S 154 DATED 06-04-2013 SEEKING INTE REST ON REFUND OF RS. 245,503/- U/S 244A FROM THE DATE OF ORDER DATED 26-12- , TO THE DATE OF ISSUE OF CHEQUE DATED 21-03-2013. IN THE APPEAL PROCEEDINGS, THE APPELLANT RELIED UPO N THE ORDER OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. H.E.G LTD (2010) 324 ITR 0331.: (2010) 189 TAXMAN 0335. THE HEADNOTE OF THE SAID DECISION WAS AS UNDER- REFUND- INTEREST UNDER S. 244A- DELAY IN PAYMENT OF REFUND- CONTENTION OF THE DEPARTMENT THAT THE WORDS ANY AM OUNT IN S. 244A WILL NOT INCLUDE INTEREST WHICH ACCRUED TO THE ASSESSEE FOR NOT REFUNDING TDS FOR 57 MONTHS HAS NO MERIT- INTEREST COMPONENT PARTOOK OF THE CHARACTER OF AM OUNT DUE UNDER S. 244A- IT BECAME AN INTEGRAL PART OF THE TD S AMOUNT WHICH WAS NOT REFUNDED AFTER IT BECAME DUE AND PAYA BLE - ASSESSEE WAS THEREFORE ENTITLED TO INTEREST UNDER S .244A ON DELAYED REFUND OF TDS. I HAVE CONSIDERED THE IMPUGNED ORDER U/S 154 AND TH E CASE LAW RELIED UPON BY THE APPELLANT. IT IS OBSERV ED THAT THE AO HAD ALLOWED INTEREST TO THE APPELLANT U/ S 244A UPT O THE DATE OF APPEAL EFFECT ONLY. THE AO HAD GIVEN THE APPEAL EFF ECT TO THE ORDER OF CIT(A) VIDE ORDER DATED 26-12-2012 AND WORKED OU T REFUND OF RS.245,503/- INCLUDING INTEREST UNDER SECTION 244A AT RS.48,857/-. THE APPELLANT IN ITS APPLICATION FILED BEFORE THE A O U/S 154 OF THE ACT DATED 06-04-2013 AGAINST THE APPEAL EFFECT ORDER U/S 250(6) DATED 26-12-2012, CLAIMED THAT THERE WAS A GAP OFTH REE MONTHS BETWEEN PASSING OF AN APPEAL EFFECT ORDER ON 26- 12 -2012 AND THE ISSUE OF CHEQUE OF REFUND ON 21-03-2013, BUT THE AO DENIED INTEREST U/S 244A UPTO THE DATE OF PAYMENT OF REFUND ON 21-0 3-2013, WHICH MISTAKE WAS APPARENT FROM RECORD. IN THE SAID APPLI CATION U/S 154, THE APPELLANT HAD CLAIMED INTEREST U/S 244A OF RS. 3683-. THE AO REJECTED THE APPLICATION VIDE ORDER DATED 25-09-201 3 BY CLAIMING THAT THE DUE INTEREST AS PER SECTION 244A HAS BEEN GIVEN TO THE ASSESSEE UPTO THE DATE OF GIVING APPEAL EFFECT AND NO FURTHER INTEREST CAN BE ALLOWED. FURTHER THAT NO REFUND OF INTEREST IS ALLOWABLE ON REFUND OF PAYMENT OF REGULAR TAX DEMAND. 1 AM OF THE CONSIDERED OPINION ON THE BASIS OF SEVE RAL DECISIONS OF HONBLE COURTS, WHEREIN IT WAS HELD TH AT WHERE THE REFUND IS OF TAX OTHER THAN ADVANCE TAX PAID OR TDS OR TCS, THE INTEREST IS PAYABLE FOR THE MONTH OR PART OF THE MO NTH FROM THE DATE OF PAYMENT OF TAX OR PENALTY TO THE DATE OF GRANT O F REFUND. THEREFORE ITA NOS.199 TO 200(ASR)/2016 A.YS. 1999-2000, 2001-02 & 2004-05 4 THE AO WAS NOT JUSTIFIED IN REFUSING SAID CLAIM OF THE APPELLANT VIDE APPLICATION U/S 154 DATED 06-04-2013. FURTHER, IN ACCORDANCE WITH THE PROVISIONS OF SECTI ON 244A(L)(B) OF THE ACT, THE INTEREST IS PAYABLE U/S 244A @ 1/2 % FOR EVERY MONTH OR PART OF A MONTH COMPRISED IN THE PERIOD OR PERIO DS FROM THE DATE OR DATES OF PAYMENT OF TAX OR PENALTY TO THE DATE O N WHICH THE REFUND IS GRANTED . THE AO HAD HOWEVER GRANTED INTE REST U/S 244A ON REFUND ONLY UPTO THE DATE OF ORDER U/S 250(6) DA TED 26-12-2612 AND NOT UPTO THE DATE OF GRANT OF REFUND ON 21-03-2 013 AS REQUIRED UNDER THE PROVISIONS OF THE I. T. ACT. THE AO WAS T HEREFORE NOT JUSTIFIED IN DISMISSING THE APPLICATION OF THE APPE LLANT U/S 154 DATED 06-04-2013. THE DECISION OF HONBLE SUPREME COURT IN THE CASE O F CIT VS H.E.G LTD (2010) 324 ITR 0331 : (2010) 189 TAXMAN 0 335 RELIED UPON BY THE APPELLANT IS APPLICABLE IN THE CASE OF THE APPELLANT. IN VIEW OF THE ABOVE DISCUSSION AND THE CITED CASE LAW S, THE AO IS ACCORDINGLY DIRECTED TO PAY INTEREST TO THE APPELLA NT U/S 244A OF THE ACT ON THE REFUND OF RS 245,503/-, AT THE RATES PRO VIDED IN THE SECTION 244A OF THE ACT FROM THE DATE OF ORDER U/S 250(6) DATED 26- 12-2012 TO THE DATE OF ISSUE OF CHEQUE OF REFUND ON 21-03-2013 AS REQUESTED IN THE APPLICATION U/S 154 DATED 06-04-20 13. 7. IN THE RESULT, APPEAL IS ALLOWED. 4. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED A S UNDER: 1. THAT THE ID CIT(A) PASSED THE ORDER ON 19.06.09. 2. THAT THE ID ACIT, CIRCLE-5, AMRITSAR PASSED THE APPEAL EFFECT-CUM-REFUND ON 26.12.12, I.E., AFTER 42 MONTH S. 3. THAT THE ID ACIT, CIRCLE-5, AMRITSAR ISSUED REF UND ON 21.03.13 OF PRINCIPAL AMOUNT. 4. THAT NO INTEREST WAS ISSUED FOR THREE MONTHS, I .E., 1.1.13 TO MARCH 2013. 5. THAT THE INTEREST HAS NOT BEEN GIVEN TILL DATE A ND HENCE IT IS REQUESTED THAT INTEREST ON INTEREST SHOULD ALSO BE GIVEN UPTO THE DATE OF GIVING THAT INTEREST. EVEN AFTER PASSIN G OF ORDER BY ID CIT(A) ON 19.06.09, THE INTEREST HAS NOT BEEN PA ID AND IS AN INORDINARY DELAY. ITA NOS.199 TO 200(ASR)/2016 A.YS. 1999-2000, 2001-02 & 2004-05 5 5. THE ASSESSEE HAS PLACED RELIANCE ON THE FOLLOWIN G CASE LAWS: I) CIT VS. H.E.G. LTD. (SC) 77 CCH 1107 II) GUJARAT FLOUROCEMIOCALS LTD. VS. CIT 92 CCH 204 ( GUJ) III) CIT VS. GUJARAT FLOURO CHEMICALS (2013) 86 CCH 0077 (SC) 6. THE LD. DR, ON THE OTHER HAND, PLACED STRONG REL IANCE ON THE ORDERS OF THE LD. CIT(A). 7. HERE, THE AO HAD ALLOWED INTEREST TO THE ASSESSE E UNDER SECTION 244A OF THE ACT UPTO THE APPEAL EFFECT ONLY, I.E., UP TO 26.12.2012, THE DATE OF PASSING THE APPEAL EFFECT ORDER. THE ASSES SEE IN HIS APPLICATION UNDER SECTION 154 OF THE ACT AGAINST THE APPEAL EFF ECT ORDER CLAIMED THAT THERE WAS A GAP OF THREE MONTHS BETWEEN THE PASSING OF THE APPEAL EFFECT ORDER DATED 25.12.2012 AND THE ISSUANCE OF CHEQUE O F REFUND ON 21.03.2013. HOWEVER, THE AO DENIED INTEREST UNDER S ECTION 244A OF THE ACT UPTO THE DATE OF PAYMENT OF REFUND ON 21.03.201 3. THIS MISTAKE WAS FOUND TO BE APPARENT FROM RECORD. THE AO REJECTED T HE ASSESSEES APPLICATION UNDER SECTION 154 OF THE ACT, VIDE ORDE R DATED 25.09.2013. IT WAS OBSERVED THAT DUE INTEREST AS PER SECTION 244A HAD BEEN GIVEN TO THE ASSESSEE UPTO THE DATE OF PASSING OF THE APPEAL EFF ECT ORDER AND THAT NO FURTHER INTEREST COULD BE ALLOWED. IT WAS ALSO OBS ERVED THAT NO REFUND OF INTEREST IS ALLOWABLE ON PAYMENT OF REGULAR TAX DE MAND. THE LD. CIT(A) DULY TOOK INTO CONSIDERATION THIS OBTAINING POSITIO N. HE, FOLLOWING THE DECISIONS ON THE ISSUE, OBSERVED THAT WHERE REFUND IS OF TAX OTHER THAN ITA NOS.199 TO 200(ASR)/2016 A.YS. 1999-2000, 2001-02 & 2004-05 6 THE ADVANCE TAX PAID OR TDS AND TCS, THE INTEREST I S PAYABLE FOR THE MONTH OR PART OF THE MONTH FROM THE DATE OF PAYMENT OF TAX OR PENALTY TO THE DATE OF GRANT OF REFUND AND THAT THEREFORE, THE AO WAS NOT JUSTIFIED IN REFUSING THE ASSESSEES CLAIM MADE BY FILING APPLIC ATION U/S 154 OF THE ACT. IT WAS ALSO OBSERVED THAT AS PER SECTION 244 A(1)(B) OF THE ACT, INTEREST IS PAYABLE @ % FOR EVERY MONTH OR FOR PAR T OF THE MONTH COMPRISING IN THE PERIODS FROM THE DATE OF PAYMENT OF TAX OR PENALTY TO THE DATE ON WHICH THE REFUND IS GRANTED, BUT THE AO HAD GRANTED INTEREST U/S 244A ON REFUND ONLY UPTO THE DATE OF ORDER, DAT ED 26.12.2012 AND NOT UPTO THE DATE OF GRANT OF REFUND ON 21.03.2013 AND AS SUCH THE APPLICATION U/S 154 OF THE ACT HAD WRONGLY BEEN DIS MISSED. THE LD. CIT(A) FOLLOWED THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. H.E.G. LTD., 324 ITR 331 (SC) IN DIRECTIN G THE AO TO PAY INTEREST TO THE ASSESSEE UNDER SECTION 244A OF THE ACT ON TH E REFUND AT THE RATES PROVIDED IN SECTION 244A FROM THE DATE OF THE ORDER , I.E., 26.12.2012 TO THE DATE OF ISSUANCE OF CHEQUE OF REFUND ON 21.03 .2013, AS REQUESTED BY THE ASSESSEE IN THE APPLICATION FILED UNDER SECTION 154 OF THE ACT. 8. THE ASSESSEE HAS NOT BEEN ABLE TO REBUT THE CATE GORICAL FACT RECORDED BY THE LD. CIT(A), WHICH ARE IN ACCORDANCE WITH LAW. THE RELIEF HAS BEEN ALLOWED TO THE ASSESSEE ENTIRELY IN ACCORD ANCE WITH LAW, AS ALSO HAD BEEN REQUESTED BY THE ASSESSEE IN THE RECTIFICA TION APPLICATION. ITA NOS.199 TO 200(ASR)/2016 A.YS. 1999-2000, 2001-02 & 2004-05 7 9. THEREFORE, FINDING NO ERROR WHATSOEVER THEREIN, THE ORDERS OF THE LD. CIT(A) ARE CONFIRMED AND THE GRIEVANCE SOUGHT TO B E RAISED BY THE ASSESSEE IS REJECTED, BEING WITHOUT MERIT. 10 IN THE RESULT, ALL THE APPEALS ARE DISMISSED ORDER PRONOUNCED IN THE OPEN COURT ON /08/ 2016. SD/- SD/- (T.S. KAPOOR) (A.D. JAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER /SKR/ DATED: 26/08/2016 COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:M/S. ESS KAY INTERNATIONAL EXPORTS, AM RITSAR 2. THE DCIT, CIRCLE-V, ASR. 3. THE CIT(A) 4. THE CIT 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.