M/s VST Industries Ltd., Hyderabad V. ACIT, Hyderabad

ITA 200/HYD/2006

• Counselvise Citation: 20022514 RSA 2006
• Duration Of Justice: 5 year(s) 6 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2001-2002
• Appeal Filed On: 24-02-2006
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: V SRINIVAS
• Assessee Lawyers: T S AJAY
• Keywords: Difference of opinion
• Section: 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A', HYDERABAD BEFORE SHRI G.C.GUPTA, VICE PRESIDENT AND SHRI AKBER BASHA, ACCOUNTANT MEMBER ITA NO.200/HYD/2006 : ASSTT. YEAR 2001-02 M/S. VST INDUSTRIES LTD., HYDERABAD. ( PAN - AAACV 7247 H ) V/S. ASSTT. COMMISSIONER OF INCOME - TAX, CIRCLE 3(3), HYDERABAD. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI T.S.AJAY RESPONDENT BY : SHRI V.SRINIVAS O R D E R PER AKBER BASHA, ACCOUNTANT MEMBER: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS), TIRUPATI DATED 12.1.2006 AND IT PERTAINS TO ASSESSMENT YEAR 2001-02. 2. THIS APPEAL WAS ORIGINALLY HEARD ON 21.6.2006. HOWEVER, THERE WAS DIFFERENCE OF OPINION BETWEEN THE MEMBERS WHO HAVE ORIGINALLY HEARD THE APPEAL ON 21.6.2006, WITH REGARD TO THE ONLY ISSUE THAT AR ISES FOR CONSIDERATION IN THIS APPEAL, VIZ. REGARDING ADJUSTMENT OF MAT CREDIT WHI LE COMPUTING INTEREST UNDER S.234B AND 234C OF THE INCOME-TAX ACT, 1961. WHILE THE LEARNED JUDICIAL MEMBER WHO PASSED THE LEADING ORDER HAS HELD THAT T HERE WAS NO JUSTIFICATION FOR LEVYING INTEREST UNDER S.234B AND S.234C OF THE ACT , WITHOUT ADJUSTING THE MAT CREDIT, AND ACCORDINGLY SET ASIDE THE ORDERS OF THE LOWER AUTHORITY AND DIRECTED THE ASSESSING OFFICER TO ADJUST MAT CREDIT BEFORE LEVYI NG INTEREST UNDER S.234B AND 234C OF THE ACT, THE LEARNED ACCOUNTANT MEMBER, WHO PASSED A DISSENTING ORDER, UPHELD THE ACTION OF THE ASSESSING OFFICER IN CHARG ING INTEREST UNDER S.234B AND S.234C OF THE ACT WITHOUT ADJUSTING THE MAT CREDIT. ITA NO.200/HYD/06 M/S. VST INDUSTRIES LTD., HYDERABAD 2 3. ON ACCOUNT OF THE ABOVE DIFFERENCE OF OPINION BETWEEN THE MEMBERS, WHO HAVE ORIGINALLY HEARD THE APPEAL, THE FOLLOWIN G QUESTIONS WHICH ACCORDING TO THEM CRYSTALLIZES THE POINTS OF DIFFERENCE BETWEEN THEM, WERE REFERRED TO THE THIRD MEMBER, VIZ. HONBLE PRESIDENT. 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, INTEREST UNDER SECTION 234B AND SECTION 234C COULD BE LEVIED BEFORE ADJUSTING MAT CREDIT UNDER SECTION 115JA OF THE INCOM E TAX ACT, 1961, ESPECIALLY WHEN THE ISSUE ON MERITS I S ADMITTEDLY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF VARIOUS BENCHES OF THE TRIBUNAL. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, WHEN THERE ARE CONFLICTING JUDICIAL VIEWS EXPRESSED BY THE BOM BAY HIGH COURT IN THE CASE OF HARIDILLIA CHEMICALS LTD. 221 ITR 194 AND MADRAS HIGH COURT IN THE CASE OF RANE BRAKE INDIA L TD. T.C.(A) 188/204 DATED 15.07.2004, WHETHER WE HAVE TO FOLLOW THE JUDGMENT OF THE MADRAS HIGH COURT, WHICH IS IN FAVO UR OF THE ASSESSEE, IN VIEW OF THE JUDGMENT OF THE APEX COURT IN THE CASE OF CIT VS. VEGETABLE PRODUCTS LTD. (1973) 88 ITR 192. 3. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WHEN T HE ASSESSEE HAS NOT RAISED THE ISSUE OF ADJUSTMENT OF MAT CREDIT BEFORE LEVY OF INTEREST UNDER SECTION 234B AND SECTION 234 C AGAINST THE ORDER OF ASSESSMENT , CAN THE SAME BEE RAISED I N AN APPEAL ARISING OUT OF THE CONSEQUENTIAL ORDER PASSED BY TH E ASSESSING OFFICER TO GIVE EFFECT TO THE ORDER OF THE TRIBUNAL. THE HONBLE THIRD MEMBER HAS DISPOSED OFF THE MATTE R REFERRED TO HIM BY HIS ORDER DATED 15 TH JUNE, 2011. IN THAT DETAILED ORDER, HE HAS CONCUR RED WITH THE VIEW TAKEN BY THE LEARNED ACCOUNTANT MEMBER, INSOFA R AS QUESTIONS NO.2 AND 3 ARE CONCERNED BY ANSWERING THE SAME IN THE NEGATIVE , BUT REFRAINED TO ANSWER QUESTION NO.1 REFERRED TO HIM, WHICH IS ON THE MERI TS OF THE ISSUE REGARDING ADJUSTMENT OF THE MAT CREDIT, FIRSTLY FOR THE REASO N THAT IT IS ACADEMIC IN THE VIEW THAT HE HAS TAKEN, AND THEN ALSO FOR THE REASON THA T THE LEARNED AM HAS NOT EXPRESSED ANY OPINION THEREON AND THEREFORE, HE HAS , STRICTLY SPEAKING, ONLY ONE VIEW (THAT OF THE LEARNED JM) BEFORE HIM. ITA NO.200/HYD/06 M/S. VST INDUSTRIES LTD., HYDERABAD 3 6. PROCEEDING BY THE MAJORITY VIEW, WE HOLD THAT THE ASSESSEE HAVING NOT RAISED THE ISSUE OF ADJUSTMENT OF MAT CREDIT BE FORE LEVY OF INTEREST UNDER S.234B AND S.234C AGAINST THE ORDER OF ASSESSMENT, THE SAME CANNOT BE RAISED IN AN APPEAL ARISING OUT OF THE CONSEQUENTIAL ORDER PASSED BY THE ASSESSING OFFICER TO GIVE EFFECT TO THE ORDER OF THE TRIBUNAL. IN TH IS VIEW OF THE MATTER, THE PRESENT APPEAL OF THE ASSESSEE, CONTESTING THE METHODOLOGY ADOPTED BY THE ASSESSING OFFICER FOR COMPUTING INTEREST UNDER S.234B AND S.2 34C OF THE ACT, WHILE PASSING THE ORDER FOR GIVING EFFECT TO THE ORDER OF THE TRI BUNAL, ARE LIABLE TO BE REJECTED, SINCE THE ASSESSEE HAS NOT RAISED ANY ISSUE WITH RE GARD TO LEVY OF INTEREST UNDER S.234B AND 234C AGAINST THE ORDER OF ASSESSMENT PAS SED EARLIER. CONSEQUENTLY, THE CONTENTIONS OF THE ASSESSEE ON THE MERITS OF TH E ISSUE, WITH REGARD TO THE METHOD OF COMPUTATION OF INTEREST UNDER S.234B AND S.234C HAVE BECOME ACADEMIC IN NATURE. FOR THAT REASON AND ALSO FOR T HE REASON THAT IN THE ABSENCE OF ANY VIEW EXPRESSED BY THE LEARNED ACCOUNTANT MEM BER IN THAT ASPECT IN HIS DISSENTING ORDER, THERE WAS ONLY ONE VIEW EXPRESSED BY THE LEARNED JUDICIAL MEMBER, AND FOR THAT VERY REASON, THE HONBLE THIRD MEMBER ALSO HAVING NOT EXPRESSED ANY OPINION ON THAT ASPECT, WE ARE NOT IN CLINED TO GO INTO THAT ASPECT OF THE MATTER. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMIS SED. ORDER PRONOUNCED IN THE COURT ON 26.8.2011 SD/- SD/- (G.C.GUPTA) (AKBER BASHA) VICE PRESIDENT ACCOUNTANT MEMBER DT/- 26 TH AUGUST, 2011 COPY FORWARDED TO: 1. M/S. VST INDUSTRIES LTD., 1-7-1063/1065, AZAMABA D, HYDERABAD 500 020 2. ASST COMMISSIONER OF INCOME - TAX, CIRCLE 3(3) , HYDERABAD. 3. COMMISSIONER OF INCOME-TAX(APPEALS) TIRUPATI ITA NO.200/HYD/06 M/S. VST INDUSTRIES LTD., HYDERABAD 4 4. COMMISSIONER OF INCOME - TAX III HYDERABAD 5. THE D.R., ITAT, HYDERABAD. B.V.S