The DCIT, Circle 5, Ahmedabad V. Prabhudas Kishordas Tobacco Products Ltd, Ahmedabad

ITA 2183/AHD/2009

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 9118 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-09-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 1993-1994
• Appeal Filed On: 09-07-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M C PANDIT
• Assessee Lawyers: S N SOPARKAR
• Keywords: Set aside
• Section: 244A; 154

Judgement Text

IN THE INCOME_TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI H.L.KARWA AND SHRI N.S.SAINI ITA NO.2183/AHD/2009 (ASSESSMENT YEAR : 1993-94) DY. CIT, CIRCLE-5, AHMEDABAD. VS. M/S PARBHUDAS KISHORDAS TOBACCO PRODUCTS PVT. LTD. 2 ND FLOOR, C.U.SHAH CHAMBERS ASHRAM ROAD, AHMEDABAD-380009. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI M.C.PANDIT, SR. D.R. RESPONDENT BY : SHRI S.N.SOPARKAR, A.R. ( (( ( )/ )/)/ )/ ORDER PER KARWA, JM: THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST T HE ORDER OF CIT(A)-XI AHMEDABAD DATED 01.4.2009 RELATING TO ASSE SSMENT YEAR 1993-94. 2. IN THIS APPEAL, THE REVENUE HAS RAISED THE FOLLOWIN G GROUNDS: 1. THE LD. COMMISSIONER OF INCOME TAX (A)-XI, AHMEDAB AD HAS ERRED IN LAW AND ON FACTS IN DIRECTING TO GRANT INTERE ST U/S.244A ON PAYMENT OF RS.30,89,244/- PAID U/S.140A O F THE ACT 2. THE LD. COMMISSIONER OF INCOME TAX (A)-XI, AHMEDAB AD HAS ERRED IN LAW AND ON FACTS IN DIRECTING TO GRANT INTERE ST U/S.244A EVEN THOUGH NO INTEREST WAS PAYABLE, CONSIDERI NG PROVISO TO SECTION 244A(1)(A) OF THE IT ACT. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, TH E LD. COMMISSIONER OF INCOME TAX (A)-LL, AHMEDABAD OUGHT TO HAVE UP HELD THE ORDER OF THE ASSESSING OFFICER. 2 4. IT IS THEREFORE, PRAYED THAT THE ORDER OF LD. CO MMISSIONER OF INCOME-TAX (A)-XI, AHMEDABAD MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 3 BRIEFLY STATED, THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE COMPANY HAS FILED RECTIFICATION APPLICATION ON 21.6.2006 , WHEREBY IT HAS POINTED OUT THAT INTEREST U/S 244A OF THE I.T.ACT, 196 1 (IN SHORT THE ACT) ON THE PAYMENT OF RS.30,89,244/- PAID U/S 140A HAS NOT BEEN GRANTED BY THE ASSESSING OFFICER. THE ASSESSING OFFICER REJECTED THE APPL ICATION OF THE ASSESSEE FILED U/S 154 OF THE ACT ON 12.6.2008 STATING THA T INTEREST U/S 244A IS NOT APPLICABLE ON 140A PAYMENT. 4. ON APPEAL, THE CIT(A) ALLOWED THE CLAIM OF THE ASSE SSEE FOLLOWING THE DECISION OF HONBLE MADRAS HIGH COURT IN THE CASE OF C IT V. CHOLAMANDALAM INVEST & FINANCE CO. LTD. (2008) 166 TA XMAN 132 (MAD.), WHEREIN IT HAS BEEN HELD THAT THE MATTER IS W ELL SETTLED THAT EVEN FOR THE REFUND OF TAX PAID U/S 140A ON SELF-ASSESSMENT, T HE ASSESSEE IS ENTITLED TO INTEREST. 5. DISSATISFIED WITH THE ORDER OF THE CIT(A), THE REVE NUE IS IN APPEAL BEFORE THE TRIBUNAL. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS. WE FIND THAT T HE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE BY THE FOLLOWING DECISIONS: 1. CIT V. CHOLAMANDALAM INVEST & FINANCE CO. LTD. (20 08) 166 TAXMAN 132 (MAD.), 2. CIT V. ASHOK LEY LAND LTD. (2002) 254 ITR 641 IN THE CASE OF CHOLAMANDALAM INVESTMENT & FINANCE CO. L TD. (SUPRA), THE HONBLE MADRAS HIGH COURT HAS HELD AS UNDER: 3 5.4 A THAT APART, THE LAW IS WELL-SETTLED THAT EVEN FOR THE REFUND OF TAX PAID UNDER SECTION 140A ON SELF-ASSESSMENT, THE ASSE SSEE IS ENTITLED TO INTEREST AS HELD BY THIS COURT IN CITV. ASH OK LEY LAND LTD. [2002] 254 ITR 641. 5.5 IT IS ALSO TRITE LAW THAT WHEREVER THE ASSESSEE IS EN TITLED TO REFUND, THERE IS A STATUTORY LIABILITY ON THE REVENU E TO PAY INTEREST ON SUCH REFUND ON GENERAL PRINCIPLES TO PAY INTEREST ON SUMS WRONGFULLY RETAINED. 5.6 WE ARE ALSO STRENGTHENED BY THE DECISION OF THE AP EX COURT FOR THE ABOVE VIEW TAKEN IN SANDVIK ASIA LTD. V. C/ R[2006] 280 ITR 643, WHEREIN IT IS HELD AS FOLLOWS : 'IN VIEW OF THE EXPRESS PROVISIONS OF THE INCOME-TAX ACT, 1961, AN ASSESSEE IS ENTITLED TO COMPENSATION BY WAY OF INTEREST FOR THE DELAY IN THE PAYMENT OF AMOUNTS LAWF ULLY DUE TO THE ASSESSEE WHICH ARE WITHHELD WRONGLY AND CONTRARY T O LAW. THE GOVERNMENT IS LIABLE TO PAY INTEREST AT THE RATE APPLICABLE TO THE EXCESS AMOUNT REFUNDED TO THE ASSESSEE.' RESPECTFULLY FOLLOWING THE DECISIONS OF THE HONBLE MADR AS HIGH COURT (SUPRA), WE DO NOT FIND ANY INFIRMITY IN THE FINDING S OF THE CIT(A) ON THIS ISSUE. IN OUR VIEW, THE CIT(A) HAS CORRECTLY DIRECTED THE ASSESSING OFFICER TO GRANT INTEREST U/S 244A ON PAYMENT OF RS.30,89,244/ - PAID BY THE ASSESSEE U/S 140A OF THE ACT. THE APPEAL FILED BY THE RE VENUE IS DEVOID OF MERITS AND, THEREFORE, WE DISMISS THE SAME. 7. IN THE RESULT, THE APPEAL IS DISMISSED. THE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 11.9. 2009. SD/- (N.S.SAINI) ACCOUNTANT MEMBER SD/- (H.L.KARWA) JUDICIAL MEMBER AHMEDABAD, DATED:11.9.2009 PSP* 4 COPY TO : (1) THE ASSESSEE (2) THE ASSESSING OFFICER (3) THE CIT(A) CONCERNED, (4) THE CIT, CONCERNED, (5) THE DR, ITAT, AHMEDABAD, (6) GUARD FILE. BY ORDER ASSTT. REGISTRAR / D EPUTY REGISTRAR ITAT, AHMEDABAD BENCHES AHMEDABAD.