Smt. Saraj Devi Bawri , Dimapur V. Assistant Commissioner of Income Tax, Circle - Dimapur , Dimapur

ITA 226/GTY/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 2425 (ITAT-GUWAHATI)
• Duration Of Justice: 1 year(s) 8 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 08-12-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SANJIT KR DAS
• Keywords: Bonafide belief; Revised return; Ignorance of law
• Section: 234B; 139(5); 208; 148

Judgement Text

1 ITA NO. 226/GAU/2017 SMT. SAROJ DEVI BAWRI., AY- 20 11-12 , A , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA ( ) . . , . ' # $% % , '( ) [BEFORE SHRI A. T. VARKEY, JM & DR. A. L. SAINI, A M] I.T.A. NO. 226/GAU/2017 ASSESSMENT YEAR: 2011-12 SMT. SAROJ DEVI BAWRI, NAGALAND (PAN: ACLPB0468J) VS. ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE- DIMAPUR APPELLANT RESPONDENT DATE OF HEARING 29.07.2019 DATE OF PRONOUNCEMENT 04.09.2019 FOR THE APPELLANT SHRI AKKAL DUDHWEWALA, FCA FOR THE RESPONDENT SHRI SANJIT KR. DAS, ADDL. CIT, SR. DR ORDER PER SHRI A.T.VARKEY, JM THIS APPEAL PREFERRED BY THE ASSESSEE IS AGAINST TH E ORDER OF THE LD. CIT(A), JORHAT DATED 21.02.2017 FOR AY 2011-12. 2. THE SOLE ISSUE INVOLVED IN THIS APPEAL OF ASSESS EE IS AGAINST THE ORDER OF LD. CIT(A) IN CONFIRMING THE ACTION OF AO IN LEVYING INTEREST U/S. 234B AND 234C OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL WHO HAD FILED HER RETURN OF INCOME ON 27.03.2012 DECLARING TOTAL INCOME OF R S.7,19,730/-. THEREAFTER, ON 05.02.2014 ASSESSEE SUBMITTED A LETTER STATING THAT SHE WAS HOLDING 9,91,775 EQUITY SHARES OF M/S. VINAY CEMENT LIMITED WHICH WAS PURCHASED IN PREVIOUS YEARS AT A COST OF RS.99,17,750/-. THE SAID SHARES WERE TRANSFERRED T O M/S. CALCOM CEMENT INDIA LTD. AND IN EXCHANGE SHE GOT 37,68,745 EQUITY SHARES ON THE BAS IS OF A SAP RATIO OF 1:3.80. SINCE ASSESSEE DID NOT RECEIVE ANY CONSIDERATION IN CASH SHE FILED HER RETURN WITHOUT COMPUTING ANY CAPITAL GAINS. DURING THE FY 2013-14 THE ASSES SEE WHEN MADE AWARE THAT THE SAID 2 ITA NO. 226/GAU/2017 SMT. SAROJ DEVI BAWRI., AY- 20 11-12 TRANSACTION MAY ATTRACT CAPITAL GAIN TAX LIABILITY SHE VOLUNTARILY WROTE TO THE AO TO ISSUE NOTICE U/S. 148 OF THE ACT SO THAT TAXES COULD BE P AID AND SINCE THE TIME LIMIT FOR FILING REVISED RETURN U/S. 139(5) HAD ALREADY EXPIRED. THE REAFTER, THE ASSESSEE RECEIVED NOTICE U/S. 148 OF THE ACT DATED 16.01.2015 ON 19.01.2015 AND P URSUANT TO THE REASSESSMENT NOTICE, RETURN WAS FILED IN THIS RESPECT AND TAXES WERE PAI D. THE AO WHILE COMPLETING THE ASSESSMENT U/S. 143(3)/147 OF THE ACT HAS ACCEPTED THE RETURNED INCOME. HOWEVER, INTEREST U/S. 234B AT RS.18,58,833/- AND U/S. 234C AT RS.1,3 5,913/- HAVE BEEN LEVIED. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) WHO DISMISSED THE APPEAL OF THE ASSESSEE BY OBSERVING AS UNDER: THE A/R OF THE APPELLANT AGGRIEVED WITH THE CALCU LATION OF CHARGING OF INTEREST U/S. 234B AND 234C. IN HIS SUBMISSION, IT IS STATED THAT THE LD. ASSESSING OFFICER WHILE COMPLETING THE ASSESSMENT U/S. 143(3)/147 OF THE INCOME TAX ACT, 1 961 HAS ACCEPTED THE RETURNED INCOME. HOWEVER, INTEREST U/S. 234B AT RS. 18,58,833/- AND U/S. 234C AT RS.1,35,913/- OF THE INCOME TAX ACT, 1961 HAVE BEEN LEVIED IN-SPITE OF THE FACT THAT NON-PAYMENT OF ADVANCE TAXES AS DUE TO BONAFIDE BELIEF AND/OR DISPUTED VIEWS REGARDING TAXABILITY OF THE TRANSACTION IN QUESTION. WITHOUT PREJUDICE IT IS SUBMITTED THAT THE LD. ASSE SSING OFFICER WRONGLY CALCULATED THE INTEREST U/S. 234C AT RS. 1,35,913/- INSTEAD OF CORRECT FIGU RE RS.36,112/- EVEN WHEN THE CAPITAL GAIN IN QUESTION AROSE AFTER 15 TH DECEMBER, 2010. I HAVE CAREFULLY GONE THROUGH THE SUBMISSION OF THE A/R AND ALSO PERUSED THE ORDER OF THE AO. THE ASSESSEE APPEALED AGAINST THE CHARGING OF INTER EST U/S. 234B AND 234C OF THE INCOME-TAX ACT. INTEREST IS CHARGED FOR DEFAULT IN PAYMENT OF TAX. THE ASSESSEE IS REQUIRED TO PAY ADVANCE TAX IN ACCORDANCE WITH THE PROVISION OF SECTION 208 TO 211 OF THE INCOME-TAX ACT, SECTION 234B IS FOR THE DEFAULT IN PAYMENT OF ADVANCE TAX A ND SECTION 234C IS FOR DEFERMENT IN PAYMENT OF ADVANCE TAX. LEVY OF INTEREST UNDER SECT ION 234B AND 234C ARE MANDATORY AND AUTOMATIC. ASSESSEE CANNOT AVOID IT. THE ASSESSEE H AS TO PAY TAX IN ADVANCE IN RESPECT OF TOTAL INCOME WHICH WOULD BE CHARGEABLE TO TAX FOR THE ASS ESSMENT YEAR IMMEDIATELY THE FOLLOWING YEAR. IGNORANCE OF LAW CANNOT CONSIDERED. HENCE, I DISMISS THE ASSESSEE'S APPEAL AND DECIDE THE ISSUE IN FAVOUR OF REVENUE. 4. AFTER HAVING HEARD BOTH THE PARTIES WE NOTE THAT THE LEVY OF INTEREST U/S. 234B OF THE ACT IS COMPENSATORY IN NATURE WHEN THE ASSESSEE FOR ANY REASON DID NOT DEPOSIT THE ADVANCE TAX AS STIPULATED BY LAW. BY NOT REMITTING THE TAX AT THE STIPULATED TIME, THE REVENUE CANNOT BE DEPRIVED OF THE TAXES DUE AS PER LAW. IT SHOULD BE KEPT IN MIND THAT EQUITY AND TAX LAWS ARE STRANGERS TO EACH OTHER AND THE ASSESSEE CANNOT BE ALLOWED ANY CONCESSION FOR HER IGNORANCE, SINCE AS WE SAID EARLIER THE INTEREST LE VIED U/S. 234B IS COMPENSATORY IN NATURE AND IT IS AUTOMATIC AND WE CONFIRM THIS ACTION OF T HE LD CIT(A). HOWEVER WE FIND FORCE IN THE ARGUMENT OF LD AR THAT INTEREST UNDER SECTION 2 34C IS CONCERNED, IN TERMS OF THE FIRST 3 ITA NO. 226/GAU/2017 SMT. SAROJ DEVI BAWRI., AY- 20 11-12 PROVISO TO SECTION 234C, THE INTEREST ON THE TAX DU E ON THE AMOUNT OF CAPITAL GAINS COULD HAVE BEEN LEVIED IN THE REMAINING INSTALLMENTS OF A DVANCE TAX WHICH FALL DUE SUBSEQUENT TO EARNING OF SUCH CAPITAL GAIN. THE REASON BEING THAT AN ASSESSEE CANNOT BE EXPECTED TO ESTIMATE THE TAX ON THE CAPITAL GAIN WHICH MAY OR M AY NOT ARISE IN FUTURE. THE AO IS ACCORDINGLY DIRECTED TO VERIFY AND RE-COMPUTE THE I NTEREST UNDER SECTION 234C AS PER THE FIRST PROVISO TO SECTION 234C OF THE ACT. THEREFORE, THE APPEAL OF ASSESSEE IS PARTLY ALLOWED. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 4TH SEPTE MBER, 2019. SD/- SD/- (DR. A. L. SAINI) (ABY. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 4TH SEPTEMBER, 2019 JD.(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1. APPELLANT SMT. SAROJ DEVI BAWRI, 12C, SUNNY PA RK, ASHRAY APARTMENT, BALLYGUNGE, KOLKATA-700 019. 2 RESPONDENT ACIT, CIRCLE-DIMAPUR, AAYAKAR BHAWAN , DIMAPUR, NAGALAND 3. 4. CIT(A), JORHAT CIT-, , JORHAT 5. DR, ITAT, KOLKATA. (SENT THROUGH E-MAIL) / TRUE COPY, BY ORDER, ASSISTANT REGISTRAR