Twenty First Century Finance Ltd, New Delhi V. ACIT Company Circle-3 (3), New Delhi

ITA 2148/DEL/2008

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 8853 (ITAT-DELHI)
• Duration Of Justice: 6 year(s) 8 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 25-02-2015
• Assessment Year: 1997-1998
• Appeal Filed On: 03-06-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J P CHANDRAKAR
• Assessee Lawyers: SHAILESH GUPTA CAS; SALIL AGARWAL SHRI GAUTAM JAIN
• Keywords: Recovery proceedings
• Section: 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : H : NEW DELHI BEFORE SHRI R.S. SYAL, AM AND SHRI I.C. SUDHIR, JM ITA NO.2148/DEL/2008 ASSESSMENT YEAR : 1997-98 M/S TWENTY FIRST CENTURY FINANCE LTD., H-1, ZAMRUDPUR COMMUNITY CENTRE, KAILASH COLONY, NEW DELHI. VS. ACIT, COMPANY CIRCLE 3(6), NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SALIL AGARWAL, ADVOCATE, SHRI GAUTAM JAIN & SHRI SHAILESH GUPTA, CAS. DEPARTMENT BY : SHRI J.P. CHANDRAKAR, SR. DR DATE OF HEARING : 25.02.2015 DATE OF PRONOUNCEMENT : .02.2015 ORDER PER R.S. SYAL, AM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER PASSED BY THE CIT(A) ON 20.3.2008 IN RELATION TO THE ASSESSME NT YEAR 1997-98. ITA NO.2148/DEL/2008 2 2. IT IS A RECALLED MATTER INASMUCH AS THE EARLIER ORDER PASSED BY THE TRIBUNAL ON MERITS ON 3 RD JULY, 2009 CAME TO BE RECALLED VIDE ITS LATER ORDER DATED 9 TH OCTOBER, 2013 FOR THE DISPOSAL OF GROUND NOS. 3-5. 5 OF THE APPEAL. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE LD. CIT(A) PASSED THE IMPUGNED ORDER DISMISSING THE APPEAL IN LIMINE NOT CONDONING THE DELAY. THE ASSESSEE IN ITS APPEAL BEFORE THE TRIBU NAL CHALLENGED THE ACTION OF THE LD. CIT(A) IN TREATING THE APPEAL AS TIME BARRED THROUGH GROUND NOS.1 AND 2. THE MERITS WERE CHALLENGED BEF ORE THE TRIBUNAL THROUGH GROUND NOS.3-5. THE TRIBUNAL DISMISSED THE ASSESSEES APPEAL ON MERITS BY HOLDING THAT IT WAS LIABLE TO PAY INTE REST U/S 201(1A) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER CALLED THE ACT) . NOW, WITH THE RECALLING OF THE TRIBUNAL ORDER IN RESPECT OF GROUN D NOS. 3-5, THE POSITION WHICH EMERGES IS THAT THE DECISION ON MERITS EARLIE R GIVEN AGAINST THE ASSESSEE IS RECALLED AND THE QUESTION OF TIME BARRE D APPEAL HAVING BEEN FILED BEFORE THE LD.CIT(A) STANDS IMPLIEDLY DECIDED IN FAVOUR OF THE ITA NO.2148/DEL/2008 3 ASSESSEE. NOW WE HAVE TO DISPOSE OF GROUND NO. 3 T O 5 OF THE APPEAL AFRESH. 4. IT CAN BE SEEN THAT THE IMPUGNED ORDER PASSED BY THE LD. CIT(A) EMANATED FROM THE ORDER PASSED BY THE AO U/S 201(1A ) OF THE ACT PASSED ON 17.2.1997 IN RELATION TO THE FINANCIAL YE AR 1996-97. THE AO OBSERVED IN THIS ORDER THAT THERE WAS A FAILURE ON THE PART OF THE ASSESSEE IN TERMS OF SECTION 194A. SUCH FAILURE RELATED TO THE FINANCIAL YEARS 1993-94 AND 1994-95 IN WHICH THE ASSESSEE DEDUCTED TAX AT SOURCE, BUT, EITHER DID NOT DEPOSIT OR LATE DEPOSITED THE SAME. THAT IS HOW, IT WAS TREATED AS A CASE OF CONTINUATION OF DEFAULT IN RES PECT OF INTEREST U/S 201(1A) PERTAINING TO THE DEFAULTS OCCURRING IN THE FINANCIAL YEARS 1993- 94 AND 1994-95, FOR WHICH THE ASSESSEE WAS SADDLED WITH A LIABILITY OF RS.57,57,128/-. THIS ORDER WAS PASSED BY THE ACIT, COMPANY CIRCLE 3(6), NEW DELHI. THE CONTENTION OF THE ASSESSEE IS THAT THIS ORDER PASSED ON 17.2.1997 WAS NEVER SENT TO THE ASSESSEE. IT WA S ONLY ON 28.12.2006, WHEN CERTAIN RECOVERY PROCEEDINGS WERE TAKEN UP AGA INST THE ASSESSEE THAT A COPY OF THIS ORDER WAS SUPPLIED. ITA NO.2148/DEL/2008 4 5. AT THIS STAGE, WE WANT TO MENTION THAT DCIT (TDS) PASSED AN ORDER ON 24.1.2000 NOTING THAT THERE WAS FAILURE ON THE PART OF THE ASSESSEE IN TERMS OF SECTION 194A RELATING TO FINAN CIAL YEAR 1993-94. AS PER THIS ORDER, TOTAL INTEREST LIABILITY U/S 201(1A ) WAS DETERMINED AT RS.44,01,699/- RELATING TO THE PERIOD FROM THE DATE OF DEFAULT TILL THE PASSING OF ORDER IN JANUARY, 2000. A COPY OF THIS ORDER IS AVAILABLE ON PAGES 28-33 OF THE PAPER BOOK. IT CAN BE SEEN FROM THIS ORDER THAT IN RESPECT OF DEFAULTS COMMITTED ON 31.3.1994, THE ASS ESSEE HAS BEEN SUBJECTED TO INTEREST U/S 201(1A) FOR A PERIOD OF D EFAULT OF 70 MONTHS. THUS, IT IS EVIDENT THAT SUCH A CHARGING OF INTERE ST STARTED FROM 31.3.94 AND ENDED UP TO THE YEAR 2000, WHICH COVERS FINANCI AL YEAR 1996-97, IN RESPECT OF WHICH THE PRESENT PROCEEDINGS ARE UNDERW AY BEFORE US. THE ASSESSEE PREFERRED APPEAL AGAINST THE ORDER PASSED BY THE DCIT, TDS, ON 24.1.2000 BEFORE THE LD. CIT(A) RELATING TO ASSESSM ENT YEARS 1994-95, 1995-96 AND 1996-97. SUCH APPEALS WERE DISMISSED B Y THE LD. CIT(A) VIDE HIS ORDER DATED 5.3.2001, A COPY OF WHICH IS A VAILABLE ON PAGES 1 ONWARDS OF THE PAPER BOOK. THE ASSESSEE PREFERRED FURTHER APPEAL BEFORE THE TRIBUNAL AGAINST THE CIT(A)S ORDER DATED 5.3.2 001. SUCH APPEAL ITA NO.2148/DEL/2008 5 WAS DISMISSED BY THE TRIBUNAL VIDE ITS ORDER DATED 25.7.2008, A COPY OF WHICH IS AVAILABLE ON PAGES 58 ONWARDS OF THE PAPER BOOK. THE ASSESSEE APPROACHED THE HONBLE DELHI HIGH COURT AGAINST THE TRIBUNAL ORDER DATED 25.7.08. THE HONBLE HIGH COURT VIDE ITS JUDG MENT DATED 8.11.2010, A COPY OF WHICH IS AVAILABLE ON PAGES 1 TO 5 OF THE SECOND PAPER BOOK, REMITTED THE MATTER TO THE CIT(A) FOR A FRESH ADJUDICATION. PURSUANT TO THIS JUDGMENT OF THE HONBLE DELHI HIGH COURT, THE LD. CIT(A) PASSED AN ORDER ON 15.9.2011, A COPY OF WHIC H IS AVAILABLE ON PAGES 9-25 OF THE PAPER BOOK. THE LD.CIT(A) AFTER NOTICING THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE O F HINDUSTAN COCA COLA BEVERAGES LTD. VS. CIT, 293 ITR 226 (SC) HELD THAT THE ASSESSEE CANNOT BE TREATED IN DEFAULT U/S 201(1) AND (1A) TO THE EXTENT OF TAXES DEPOSITED BY THE PAYEE COMPANIES. HE SENT THE MATT ER BACK TO THE AO FOR RE-COMPUTING INTEREST U/S 201(1A) FROM DUE DATE OR END OF THE FINANCIAL YEAR TILL THE DATE OF PAYMENT OF TAXES BY THE DEDUCTEES, BEING THE FILING OF RETURNS BY THE PAYEE COMPANIES. THE R EVENUE PREFERRED APPEAL AGAINST THIS ORDER OF THE LD. CIT(A). THE T RIBUNAL VIDE ITS ORDER DATED 7.12.2012, A COPY OF WHICH IS AVAILABLE ON PA GES 6-8 OF THE 2 ND ITA NO.2148/DEL/2008 6 PAPER BOOK, DISMISSED THE APPEALS FILED BY THE REVE NUE, THEREBY UPHOLDING THE VIEW TAKEN BY THE LD.CIT(A) ON THE QU ESTION OF CHARGING OF INTEREST U/S 201(1A). 6. FROM THE ABOVE NARRATION OF FACTS, IT IS CLEAR T HAT THE SUBJECT MATTER OF THE PRESENT APPEAL IS THE ASSESSEES LIABILITY T O PAY INTEREST U/S 201(1A) FOR THE FINANCIAL YEAR 1996-97 FOR WHICH TH E ORDER WAS PASSED BY THE AO ON 17.2.1997. IT IS OBSERVED THAT THE DC IT (TDS) PASSED ORDER ON 24.1.2000 FOR THE YEARS INCLUDING FINANCIA L YEAR 1996-97, WHICH IS THE SUBJECT MATTER OF THE PRESENT APPEAL. IT, THEREFORE, TRANSPIRES THAT TWO ORDERS HAVE BEEN PASSED BY THE INCOME-TAX AUTHORITIES IN RESPECT OF THE SAME ASSESSMENT YEAR AND FOR THE SAME DEFAUL T, VIZ., ONE ON 17.2.1997 AND THE OTHER ON 24.1.2000. SINCE THE PR OCEEDINGS FROM THE ASSESSMENT ORDER DATED 24.1.2000 HAVE ATTAINED FINA LITY INASMUCH AS THE ISSUE HAS TRAVELLED UP TO THE HONBLE HIGH COURT AN D PURSUANT TO THE DIRECTION SO GIVEN, THE LD. CIT(A) HAS PASSED THE C ONSEQUENTIAL ORDER, WE CANNOT GO AHEAD WITH THE PROCEEDINGS ARISING OUT OF THE EARLIER ORDER PASSED BY THE AO ON 17.2.1997. SINCE THE PROCEEDIN GS OUT OF THIS ORDER ITA NO.2148/DEL/2008 7 HAVE MERGED INTO THE ORDER PASSED BY THE DCIT (TDS) ON 24.1.2000, THE FORMER ORDER AUTOMATICALLY BECOMES IRRELEVANT AND N ON-SUSTAINABLE. THERE CAN BE NO QUESTION OF ANY RECOVERY EMANATING FROM THIS ORDER DATED 17.2.1997, AS TWO ORDERS ON ONE POINT FOR THE SAME YEAR CANNOT STAND. WE, THEREFORE, HOLD THAT THE ASSESSEE CANNO T BE TREATED SEPARATELY AS IN DEFAULT OUT OF THE PROCEEDINGS EMANATING FROM THE ORDER PASSED BY THE AO ON 17.2.1997. THE PROCEEDINGS ARISING OUT O F THE ORDER PASSED BY THE DCIT (TDS) ON 24.1.2000 HAVE BEEN SEPARATELY GOING ON, WHICH WILL TAKE CARE OF THE LIABILITY IN RESPECT OF INTER EST U/S 201(1A) FOR THE FINANCIAL YEAR 1996-97, IF ANY. RESULTANTLY, THE P ROCEEDINGS FLOWING OUT OF THE ORDER PASSED BY THE AO ON 17.2.1997 ARE HERE BY SET ASIDE. 7. IN THE RESULT, THE APPEAL IS ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 27.02.201 5. SD/- SD/- [I.C. SUDHIR] [R.S. SYAL] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED, 27 TH FEBRUARY, 2015. DK ITA NO.2148/DEL/2008 8 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI.