The ITO, Ward-3(4), Surat V. M/s. Patel Land Corporation, Surat

ITA 2/AHD/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 57261 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-03-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 1984-1985
• Appeal Filed On: 02-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAHUL KUMAR SRDR
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD AHMEDABAD A BENCH BEFORE SHRI G.C.GUPTA, VICE-PRESIDENT (AZ) AND SHRI T.R. MEENA, ACCOUNTANT MEMBER ITA NO.02/AHD/2012 ASSESSMENT YEAR:1984-85 INCOME TAX OFFICER, WARD-3(4), SURAT / V/S . M/S PATEL LAND CORPORATION, 39, SUGAM SOCIETY, ADAJAN PATIA, RANDER ROAD, SURAT 395005 PAN NO.AALFP5307J / APPELLANT .. / RESPONDENT /APPELLANT BY SHRI RAHUL KUMAR, SR-DR /RESPONDENT BY SMT. URVASHI SHODHAN, AR / DATE OF HEARING 01-03-2012 / DATE OF PRONOUNCEMENT 16-03-2012 !' !' !' !' / // / ORDER PER T.R. MEENA, ACCOUNTANT MEMBER:- THIS APPEAL OF THE REVENUE ARISES FROM THE ORDER OF LD. COMMISSIONER OF INC- TAX (APPEALS)-II, SURAT DATED 30-09-2011 FOR THE AS SESSMENT YEAR 1984-85. THE REVENUE HAS RAISED THE FOLLOWING GROUND:- [1] ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD. CIT(A)-II, SURAT HAS ERRED IN PARTY ALLOWED THE APP EAL OF THE ASSESSEE BY WAY OF A TOTAL REDUCTION OF RS.28,55,498/- OF INTEREST U/S.139(8) AND U/S. 215 WITHOUT APPRECIATING AND CONSIDERING THE FACT WHICH WAS BROUGHT IN BY THE ASSESSING OFFICER WHILE PASSING THE ORDER U/S. 143( 3) R.WS. 250. 2. THE FACTS OF THE CASE ARE THAT APPEAL ARISES OUT OF THE ORDER OF THE ASSESSING OFFICER REJECTING THE APPLICATION FOR RECTIFICATION FILED BY THE ASSESSEE. FROM THE ORDER U/S. 154, IT APPEARS THAT ORDER DATED 30-03-2009 PA SSED U/S. 143(3) R.W.S. 250 OF THE AO HAD CHARGED INTEREST U/S. 139(8) ON ASSESSED INC OME AND INTEREST U/S. 215/217/234B FROM 01-04-1984 TO 30-03-2009. AGGRIEV ED BY THIS ORDER ASSESSEE PREFERRED APPEAL BEFORE LD. CIT(A). ITA NO.02/AHD/2012 A.Y. 1984-85 ITO WD-3(4), SRT V. M/S. PATEL LAND CORPN. PAGE 2 3. LD. CIT(A) OBSERVED VIDE PARA-6 AND 7 AS UNDER:- 6. THIS CASE PERTAINS TO A.Y. 1984-85 AND THE PROV ISIONS OF SECTION 139(8) AS IT EXISTED FOR THAT YEAR WILL BE APPLICABLE AND NOT THE AMENDED PROVISIONS WHICH CAME W.E.F. A.Y. 1985-86. AS PER PROVISION OF SECTION 139(8) APPLICABLE TO A.Y. 1984-85, THERE WAS NO PROVISION THAT IN CAS E TAX LIABILITY OF THE ASSESSEE IS ENHANCED, THE INTEREST WOULD BE ENHANCE D ACCORDINGLY ALTHOUGH THERE EXISTED PROVISION FOR REDUCTION OF INTEREST I N CASE TAX LIABILITY WAS REDUCED SUBSEQUENTLY. AS PER THE PROVISIONS OF SECT ION 139(8) BEFORE AMENDMENT, INTEREST WAS TO BE CHARGED ON TAX LIABIL ITY ON REGULAR ASSESSMENT FOR THE PERIOD STARTING FROM THE DATE SUBSEQUENT TO DATE OF FILING RETURN SPECIFIED U/S. 139(1) AND UPTO THE DATE ON WHICH TH E RETURN WAS FILED. THEREFORE, IN MY OPINION, INTEREST U/S. 139(8) COUL D BE CHARGED ONLY ON TAX LIABILITY DETERMINED ON REGULAR ASSESSMENT AND FOR THE PERIOD 01.07.1984 TO 04.08.1987. THE A.O IS DIRECTED TO COMPUTE THE INTE REST U/S. 139(8) ACCORDINGLY. 7. SIMILARLY, PROVISIONS OF SECTION 215(3) WERE AME NDED W.E.F. 01.04.1985 I.E. A.Y. 1985-86 ALLOWING INTEREST TO BE ENHANCED IF TA X LIABILITY INCREASED ON ORDERS PASSED SUBSEQUENT TO REGULAR ASSESSMENT. PRI OR TO AMENDMENT AND AS APPLICABLE TO A.Y. 1984-85, INTEREST WAS TO BE COMP UTED FROM 1 ST OF APRIL, SUBSEQUENT TO THE FINANCIAL YEAR AND UPTO THE DATE OF REGULAR ASSESSMENT ON TAX LIABILITY ASSESSED IN REGULAR ASSESSMENT AND AG AIN THE INTEREST PAYABLE COULD ONLY BE REDUCED [DEPENDING UPON TAX LIABILITY DETERMINED ON BASIS OF SUBSEQUENT ORDERS, IF ANY] AND NOT ENHANCED. IN THE CASE OF THE APPELLANT, REGULAR ASSESSMENT WAS MADE ON 30.03.1988 AND INCOM E WAS DETERMINED AT RS.12,75,813/-. THEREFORE, INTEREST U/S. 215(3) WAS CHARGEABLE FROM 01.04.1984 TO 31.03.1988 ON TAX LIABILITY DETERMINE D IN ORDER PASSED ON 30.03.1988. THE INTEREST THUS CHARGED COULD NOT BE ENHANCED IN CASE OF SUBSEQUENT INCREASE IN TAX LIABILITY AS THERE WAS N O PROVISION FOR SUCH ENHANCEMENT. BEING AGGRIEVED BY THIS ORDER, REVENUE CAME IN APPE AL BEFORE US. 4. BEFORE US LD. AR FOR THE ASSESSEE RELIED UPON TH E CASE LAW IN THE CASE OF PANNA LAL V. CIT (1989) 45 TAXMAN 340 (P&H), WHEREIN THE HONBLE HIG H COURT HAS HELD THAT AMENDMENT IN SECTION 139(8)(B) IS PROSPEC TIVE NOT RETROSPECTIVE. HE FURTHER RELIED UPON THE CASE LAW IN THE CASE OF ITO V. CORONATION FLOUR MILLS (1990) 32 ITD 550 (AHD), WHERE THE CO-ORDINATE BENCH HAS HELD THA T INTEREST CHARGE U/S. 250 COULD NOT BE INCREASED WHERE AS A RESULT OF ORDER U/S. 15 4, 147, 250 AND 254 ETC., AMOUNT OF TAX PAYABLE HAS BEEN INCREASED. ON THE CONTRARY, LD. SR-DR RELIED UPON THE ASSESSMENT ORDER OF THE ASSESSING OFFICER. ITA NO.02/AHD/2012 A.Y. 1984-85 ITO WD-3(4), SRT V. M/S. PATEL LAND CORPN. PAGE 3 5. WE HAVE HEARD THE RIVAL CONTENTIONS OF THE PARTI ES AND PERUSED THE MATERIALS ON RECORD. THE AMENDMENT MADE U/S. 139(8) IS PROSPE CTIVE AND INTEREST COULD BE CHARGED ONLY ON TAX LIABILITY DETERMINED ON REGULAR ASSESSMENT. THE INTEREST CHARGED U/S. 215(3) OF THE I.T. ACT WAS CHARGEABLE FOR THE PERIOD 01-04-1984 TO 31-03-1988 AS TAX LIABILITY DETERMINED IN ORDER PASSED ON 30-0 3-1988. WE FIND NO INFIRMITY INTO THE ORDER PASSED BY LD. CIT(A). THIS GROUND OF REVE NUE IS DISMISSED. 6. IN THE RESULT, APPEAL OF REVENUE IS DISMISSED. # !' $!%& 16/ 03 /201 2 + , - . THIS ORDER PRONOUNCED IN OPEN COURT ON 16 /03/ 201 2. SD/- SD/- ( G.C.GUPTA ) ( T.R. MEENA ) (VICE PRESIDENT) (ACCOUNTANT MEMBER) $!%&- 16/03/2012 0!! . DKP* !' !' !' !' 112 112 112 112 32 32 32 32 / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. %%16 7 / CONCERNED CIT 4. 7- / CIT (A) 5. 2:- 1116, 16, 0!! / DR, ITAT, AHMEDABAD 6. -<= ># / GUARD FILE. BY ORDER/ !' , /TRUE COPY/ ?/0 %@ 16, 0!! .