ACIT, Circle - 3, Kolkata, Kolkata V. M/s. The Peerless General Finance Company Pvt. Ltd., Kolkata

ITA 228/KOL/2012

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8080 (ITAT-KOLKATA)
• Duration Of Justice: 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-10-2012
• Appeal Filed By: Department
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 10-02-2012
• Court: TRIBUNAL
• Assessee Lawyers: S K TULSIYAN
• Section: 244A

Judgement Text

, A , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA () BEFORE , /AND , . . !' ) [BEFORE SHRI MAHAVIR SINGH, JM & SHRI C. D. RAO, AM ] # # # # / I.T.A NO. 228/KOL/2012 $% &' $% &' $% &' $% &'/ // / ASSESSMENT YEAR: 1988-89 ASSISTANT COMMISSIONER OF INCOME-TAX, VS. M/S. TH E PEERLESS GENERAL FINANCE CIRCLE-3, KOLKATA. COMPANY PVT. LTD. (PAN: AAB CT3043L) ()* /APPELLANT ) (+,)*/ RESPONDENT ) DATE OF HEARING: 25.10.2012 DATE OF PRONOUNCEMENT: 25.10.2012 FOR THE APPELLANT: SHRI A. K. SINGH, CIT(DR) FOR THE RESPONDENT: SHRI S. K. TULSIYAN, ADVOCATE !- / ORDER PER MAHAVIR SINGH, JM ( , , , , ) THIS APPEAL BY REVENUE IS ARISING OUT OF ORDER OF C IT(A)-I, KOLKATA IN APPEAL NO. 38/CIT(A)-I/CIRCLE-3/08-09 DATED 02.11.2011. ASSESS MENT WAS FRAMED BY ACIT, CIRCLE-3, KOLKATA U/S. 143(3)/251/254/154/251/254 OF THE INCO ME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 1988-89 VIDE HIS ORDER DATED 28.03.2005. 2. THE ONLY ISSUE IN THIS APPEAL OF REVENUE IS AGAI NST THE ORDER PASSED BY CIT(A) DIRECTING THE AO TO CALCULATE INTEREST U/S. 244(1A) OF THE AC T. FOR THIS, REVENUE HAS RAISED FOLLOWING TWO GROUNDS: 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN DIRECTING THE ASSESSING OFFICER TO CALCULATE THE INTEREST U/S. 24 4(1A) WITHOUT APPRECIATING THE FACT THAT THE COLLECTIONS FROM THE ASSESSEE WERE REALIZED IN THE PERIOD IN WHICH PROVISION OF SEC. 244A WERE APPLICABLE. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN DIRECTING THE ASSESSING OFFICER TO ALLOW INTEREST U/S. 244(1A ) WITHOUT APPRECIATING THE FACT THAT THE COLLECTION WERE REALIZED IN SUBSEQUENT YEARS AND AL SO BY ADJUSTING THE REFUND OF SUBSEQUENT YEARS TO THE ASSESSMENT YEAR UNDER CONSI DERATION WHEN PROVISIONS OF SECTION 244A WERE APPLICABLE AND NOT OF SECTION 244(1A) OF INCOME TAX ACT, 1961. 3. WE HAVE HEARD RIVAL SUBMISSIONS AND FOUND THAT T HE ONLY ISSUE IS APPLIATION OF THE PROVISIONS OF SECTION 244 OR 244A OF THE ACT. REV ENUES CONTENTION IS THAT EVEN THOUGH THE AY IS 1988-89, THE PROVISIONS OF SECTION 244A OF TH E ACT WILL APPLY. WHEREAS ASSESSEES CONTENTION IS THAT THE PROVISIONS OF SECTION 244 OF THE ACT WILL APPLY UPTO AY 1988-89. BEFORE CIT(A) THE GROUND NO.2 RAISED READS AS UNDER: 2. THAT, WHILE COMPUTING INTEREST ON REFUND PAYABL E TO THE ASSESSEE, THE LD. A.O. ERRED IN GRANTING INTREST U/S. 244A @ 0.5% P.M. INSTEAD O F U/S. 244(1A) OF THE I. T. ACT @ 1.25% P.M. 2 ITA 228/K/2012 THE PEERLESS GENERAL FINANCE CO. PVT. LTD. A.Y.1988-89 4. WE FIND THAT THE ASSESSEE HAS OBJECTED TO GRANT OF INTEREST OF ITS REFUND @ 0.5% PER MONTH U/S. 244A OF THE ACT FOR THE REASON THAT THE PROVISIONS OF SECTION 244A OF THE ACT APPLIES FOR AND FROM AY 1989-90 AND AFTERWARDS. THE CIT(A) ALLOWED THE CLAIM OF THE ASSESSEE BY GIVING FOLLOWING FINDING: 5.1. I HAVE GONE THROUGH THE SUBMISSIONS OF THE AP PELLANT. THE A.O. HAS SUBMITTED THAT THE A.O. HAD NOT GIVEN EFFECT TO THE ORDER OF THE CIT(A) AS MENTIONED ABOVE. THE A.O. IS DIRECTED TO VERIFY THE SAME AND GIVE EFFECT TO THE CIT(A)S ORDER IF NOT ALREADY BEEN GIVEN. 5.2. THE APPELLANT HAS SUBMITTED THAT THE A.O. HAS ERRED IN GRANTING INTEREST U/S. 244A OF THE INCOME TAX ACT, 1961. THE A.O. IS DIRECTED TO VERIFY THE SAME AND GRANT INTEREST TO THE APPELLANT AS PER THE PROVISION U/S. 244 OF T HE INCOME-TAX ACT, 1961 IF NOT GIVEN. FROM THE ABOVE FACTS AND CIRCUMTANCS OF THE CASE, W E ARE OF THE VIEW THAT THE PROVISIONS OF SECTION 244A APPLIES IN RESPECT OF ASSESSMENT FRAME D FOR AND FROM AY 1989-90 AND SUBSEQUENT ASSESSMENT YEARS. WE ARE OF THE VIEW THAT ALTHOUGH SECTION 244A OF THE ACT HAS SPECIFICALLY BEEN MADE, AS PER SECTION 244A(4) OF THE ACT, EFFEC TIVE FOR AND FROM AY 1989-90, EVEN IN THE ABSENCE OF SECTION 244A(4) OF THE ACT THE RATE OF I NTEREST U/S. 244A OF THE ACT CANNOT BE IMPLIED AND CANNOT BE SAID TO BE A PART OF PROCEDURE SO AS TO GOVERN THE PENDING CASES RELATING TO AY 1988-89 OR ANY EARLIER ASSESSMENT YEAR. THIS VIEW OF OURS IS BECAUSE SECTION 244A ENACTS SUBSTANTIVE PROVISIONS AND NOT MRELY A PROCEDURAL P ROVISION. THIS VIEW OF OURS IS ALSO SUPPORTED BY THE DECISION OF HONBLE CALCUTTA HIGH COURT IN THE CASE OF DCIT VS. CENTRAL CONCRETE & ALLIED PRODUCTS LTD. (1999) 236 ITR 595 (CAL). AS THE ISSUE IS SQUARELY COVERED IN FRAVOUR OF THE ASSESSEE, WE ALLOW TH CLAIM OF THE A SSESSEE AND DISMISS REVENUES APPEAL. 5. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSE D. 6. ORDER PRONOUNCED IN THE OPEN COURT ON 25.10.2012 . SD/- SD/- . . !' , (C. D. RAO) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER ( ' ' ' ') )) ) DATED : 25TH OCTOBER, 2012 ./ $01 2 JD.(SR.P.S.) 3 ITA 228/K/2012 THE PEERLESS GENERAL FINANCE CO. PVT. LTD. A.Y.1988-89 !- 3 +4 5!4&6- COPY OF THE ORDER FORWARDED TO: 1 . )* / APPELLANT ACIT, CIRCLE-3, KOLKATA. 2 +,)* / RESPONDENT M/S. THE PEERLESS GENERAL FINANCE CO MPANY PVT. LTD., 3, ESPLANADE EAST, KOLKATA-700 069 3 . -$ ( )/ THE CIT(A), KOLKATA 4. 5. -$ / CIT KOLKATA 4<= +$ / DR, KOLKATA BENCHES, KOLKATA ,4 +/ TRUE COPY, !-$>/ BY ORDER, 1 /ASSTT. REGISTRAR .