The ACIT, Circle-8, Ahmedabad V. Stelco Gujarat Ltd., Ahmedabad

ITA 244/AHD/2004

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 9063 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 7 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-09-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 07-09-2009
• Assessment Year: 1993-1994
• Appeal Filed On: 29-01-2004
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M C PANDIT
• Section: 244A; 234B; 195; 147; 144; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C AHMEDABAD BEFORE SHRI H.L. KARWA, JUDICIAL MEMBER AND SHRI N.S. SAINI, ACCOUNTANT MEMBER DATE OF HEARING : 07.09.09 DRAFTED ON: 8.09. 09 ITA NO. 244/AHD/2004, ITA NO.245/AHD/2004 ASSESSMENT YEAR : 1993-94, 1994-95 ASSTT. COMMISSIONER OF INCOME TAX CIRCLE-8, AHMEDABAD. VS. STEELCO GUJARAT LTD. PADMA CHAMBERS, GROUND FLOOR, GANDHIGRAM RLY. STATION, AHMEDABAD. PAN/GIR NO. : AADCS 0880L (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI M.C.PANDIT SR. D.R. RESPONDENT BY: NONE O R D E R PER N.S.SAINI , ACCOUNTANT MEMBER :- THESE APPEALS ARE FILED BY THE REVENUE AGAINST SE PARATE ORDERS OF THE LD.CIT(APPEALS)-XIV, AHMEDABAD DATED 21.11.2003 PASSED IN ASSESSMENT YEAR 1993-94 AND 1994-95. 2. IN BOTH THE ASSESSMENT YEARS UNDER APPEAL, THE F IRST GROUND OF APPEAL RELATES TO GRANTING INTEREST ON RS.15,37,056 /- IN ASSESSMENT YEAR 1993-94 AND RS.36,04,104/- IN ASSESSMENT YEAR 1994- 95 STARTING FROM THE DATE OF THE ADJUSTMENT WITH THE REFUND UPTO THE DAT E OF FINAL REFUND. 3. THE BRIEF FACTS ARE THAT THE LEARNED ASSESSING O FFICER DID NOT ALLOW INTEREST UNDER SECTION 244A (1)(B) ON THE REFUND OF INTEREST CHARGED I TA NO244/AHD/2004, ITA NO245/AHD/2004. M/S.STEELCO GUJARAT LTD. ASST.YEAR-1993 -94, 1994-95 - 2 - UNDER SECTION 234A AND 234B IN THE ASSESSMENT ORDER PASSED UNDER SECTION 144 READ WITH SECTION 147 OF THE ACT. 4. IN APPEAL BEFORE THE LEARNED COMMISSIONER OF INC OME TAX(APPEALS), THE ASSESSEE RELIED ON THE DECISION O F MADRAS HIGH COURT IN THE CASE OF CIT VS. NEEDLE INDUSTRIES PVT. LTD. (19 98) 233 ITR 370 MADRAS, WHEREIN IT WAS HELD THAT THE ASSESSEE IS ENTITLED T O INTEREST UNDER SECTION 244(1A) ON THE REFUNDED AMOUNT OF INTEREST LEVIED U NDER SECTIONS 139(8) AND 215. THE ASSESSEE ALSO RELIED ON THE DECISION O F HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. GUJARAT STATE WAREHOUS ING CORPORATION (2002) 256 ITR 596 GUJARAT, WHEREIN IT WAS HELD THA T ASSESSEE IS ENTITLED TO INTEREST UNDER S. 244(1A) IN RESPECT OF REFUND O F INTEREST PAYMENTS UNDER SS. 215, 217 AND 220(2). 5. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE HELD TH AT ASSESSEE IS FULLY JUSTIFIED IN CLAIMING INTEREST UNDER SECTION 244A ( 1)(B) AND THE LEARNED ASSESSING OFFICER OUGHT TO HAVE ALLOWED THE SAME. A CCORDINGLY, HE DIRECTED THE LEARNED ASSESSING OFFICER TO COMPUTE T HE INTEREST PAYABLE STARTING FROM THE DATE OF ITS ADJUSTMENT WITH THE R EFUNDS UPTO THE DATE OF FINAL REFUND. 6. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUPPORTE D THE ORDER OF THE LEARNED ASSESSING OFFICER WHEREAS THE LEARNED A UTHORISED I TA NO244/AHD/2004, ITA NO245/AHD/2004. M/S.STEELCO GUJARAT LTD. ASST.YEAR-1993 -94, 1994-95 - 3 - REPRESENTATIVE OF THE ASSESSEE SUPPORTED THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS). 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIALS AVAILABLE ON RE CORD. IN THE INSTANT CASE, THE LEARNED COMMISSIONER OF INCOME TAX(APPEAL S) FOLLOWING THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. GUJARAT STATE WAREHOUSING CORPORATION (2002) 256 ITR 596 (GUJ.) H AS DIRECTED THE LEARNED ASSESSING OFFICER TO ALLOW INTEREST ON THE EXCESS AMOUNT PAID BY THE ASSESSEE AS INTEREST UNDER SECTION 234A AND 234 B ON THE BASIS OF ORIGINAL ASSESSMENT WHICH WAS SUBSEQUENTLY GIVING A PPEAL EFFECT WAS FOUND EXCESS. THE LEARNED DEPARTMENTAL REPRESENTATI VE COULD NOT POINT OUT ANY ERROR IN THE ORDER OF THE LEARNED COMMISSIO NER OF INCOME TAX(APPEALS). WE ALSO DO NOT FIND ANY GOOD REASON T O INTERFERE WITH THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APP EALS). THEREFORE, THIS GROUND OF APPEAL OF THE REVENUE IS DISMISSED. 8. GROUND NO.2 OF THE APPEAL IN BOTH THE YEARS RELA TES TO GRANTING OF REFUND OF INTEREST OF RS.74,687/- IN ASSESSMENT YEA R 1993-94 AND RS.11,64,382/- IN ASSESSMENT YEAR 1994-95 CHARGED U NDER SECTION 220(2) OF THE ACT ALONG WITH INTEREST UNDER SECTION 244A O F THE ACT FROM THE DATE OF PAYMENT TO THE DATE OF ACTUAL REFUND. 9. THE BRIEF FACTS OF THE CASE ARE THAT THE LEARNED ASSESSING OFFICER GRANTED INTEREST TO THE ASSESSEE UPTO THE DATE OF D EMAND NOTICE WHEREAS I TA NO244/AHD/2004, ITA NO245/AHD/2004. M/S.STEELCO GUJARAT LTD. ASST.YEAR-1993 -94, 1994-95 - 4 - THE ACTUAL REFUND WAS RECEIVED BY THE ASSESSEE MUCH AFTER THAT DATE. THE ASSESSEE CONTENDED BEFORE THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) THAT ASSESSEE SHOULD BE GRANTED INTERE ST ON THE AMOUNT OF INTEREST WITHHELD BY THE DEPARTMENT TILL THE DATE O F ITS RELEASE. 10. THE ASSESSEE RELIED ON THE DECISION OF THE HON BLE GUJARAT HIGH COURT IN THE CASE OF D.J.WORKS VS. DY. CIT (1992) 1 95 ITR 227 (GUJ.), IN THE CASE OF CHIMANLAL S. PATEL VS. CIT (1994) 210 ITR 4 19 (GUJ). THE ASSESSEE ALSO RELIED ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. NARENDRA DOSHI (2002) 254 ITR 606 SC. 11. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE HELD THA T THE ASSESSEE WAS FULLY ENTITLED TO INTEREST UNDER SECTION 244A ON TH E INTEREST WRONGFULLY WITHHELD BY THE LEARNED ASSESSING OFFICER IN VIEW O F THE DECISION OF THE HONBLE GUJARAT HIGH COURT AND HONBLE SUPREME COUR T RELIED UPON BY THE ASSESSEE. HE THEREFORE, DIRECTED THE LEARNED AS SESSING OFFICER TO ALLOW INTEREST UNDER SECTION 244A ON CLAIM OF INTER EST TO THE ASSESSEE. 12. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIALS AVAILABLE ON RE CORD. IN THE INSTANT CASE, THE UNDISPUTED FACTS ARE THAT THE ASSESSEE BE CAME ENTITLED TO REFUND OF AMOUNT PAID BY IT AS TAX AND INTEREST ON PASSING OF THE APPELLATE ORDER BY THE CIT(A). THE LEARNED ASSESSI NG OFFICER GIVING THE EFFECT OF ORDER OF THE LEARNED COMMISSIONER OF INCO ME TAX(APPEALS) I TA NO244/AHD/2004, ITA NO245/AHD/2004. M/S.STEELCO GUJARAT LTD. ASST.YEAR-1993 -94, 1994-95 - 5 - PASSED A CONSEQUENTIAL ORDER ALLEGEDLY ON 20.05.200 2, WHEREAS THE SAME WAS SERVED UPON THE ASSESSEE ON 30.12.2002. THE ISS UE BEFORE US IS REGARDING INTEREST FOR THE PERIOD FROM 20.05.2002 T O 30.12.2002. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) HAS HEL D THAT THE DEPARTMENT WAS LIABLE TO PAY INTEREST TO THE ASSESS EE ON THE AMOUNT ILLEGALLY HELD BACK BY IT. WE FIND THAT THE LEARNED DEPARTMENTAL REPRESENTATIVE COULD NOT GIVE ANY REASON WHY THE OR DER WHICH WAS ALLEGEDLY PASSED ON 20.05.2002 WAS SERVED ON 30.12. 2002. WE FIND THAT HONBLE SUPREME COURT IN THE CASE OF CIT VS. NAREND RA DOSHI (2002) 254 ITR 606 SC, HAS HELD THAT REVENUE IS LIABLE TO PAY INTEREST ON THE AMOUNT OF INTEREST WHICH IT SHOULD HAVE PAID TO THE ASSESS EE BUT HAS UNJUSTIFIABLY FAILED TO PAY. 13. FURTHER THE HONBLE GUJARAT HIGH COURT IN THE C ASE OF D.J.WORKS VS. DY. CIT (1992) 195 ITR 227 (GUJ.) HAS HELD THAT SE C. 214(1) ITSELF RECOGNIZES IN PRINCIPLE THE LIABILITY TO PAY INTERE ST ON THE AMOUNT OF TAX PAID IN EXCESS OF THE AMOUNT OF ASSESSED TAX AND WH ICH IS RETAINED BY THE GOVERNMENT. IT WOULD THUS APPEAR THAT THE LEGISLATU RE ITSELF HAS CONSIDERED IT FAIR AND REASONABLE TO AWARD INTEREST ON THE AMOUNT PAID IN EXCESS, WHICH HAS BEEN RETAINED BY THE GOVERNMENT. THERE IS NO REASON WHY THE SAME PRINCIPLE SHOULD NOT BE EXTENDED TO TH E PAYMENT OF INTEREST, WHICH HAS BEEN WRONGFULLY WITHHELD BY THE ASSESSING OFFICER OR THE GOVERNMENT. IT WAS THE DUTY OF THE ASSESSING OF FICER TO AWARD INTEREST ON THE EXCESS AMOUNT OF TAX PAID BY THE PE TITIONER WHILE GIVING I TA NO244/AHD/2004, ITA NO245/AHD/2004. M/S.STEELCO GUJARAT LTD. ASST.YEAR-1993 -94, 1994-95 - 6 - EFFECT TO THE APPELLATE ORDER AND GRANTING REFUND O F THE EXCESS AMOUNT. IF THE EXCESS TAX PAID CANNOT BE RETAINED WITHOUT PAYM ENT OF INTEREST, SO ALSO THE INTEREST WHICH IS PAYABLE THEREON CANNOT B E RETAINED WITHOUT PAYMENT OF INTEREST. ONCE THE INTEREST AMOUNT BECOM ES DUE, IT TAKES THE SAME COLOUR AS THE EXCESS AMOUNT OF TAX, WHICH IS R EFUNDABLE ON REGULAR ASSESSMENT. THEREFORE, THOUGH THERE IS NO SPECIFIC PROVISION FOR PAYMENT OF INTEREST ON THE INTEREST AMOUNT FOR WHICH NO ORD ER IS PASSED AT THE TIME OF PASSING THE ORDER OF REFUND OF THE EXCESS A MOUNT AND WHICH HAS BEEN WRONGFULLY RETAINED, INTEREST WOULD BE PAYABLE AT THE SAME RATE AT WHICH THE EXCESS AMOUNT CARRIES INTEREST. IN OTHER WORDS, THE AMOUNT PAYABLE BY WAY OF INTEREST WOULD CARRY SIMPLE INTER EST AT THE RATE OF 15% PER ANNUM FROM THE DATE IT BECAME PAYABLE TO THE DA TE IT IS ACTUALLY PAID. ON GENERAL PRINCIPLE THE GOVERNMENT IS LIABLE TO PA Y INTEREST, AT THE RATE APPLICABLE TO EXCESS AMOUNT REFUNDED TO THE ASSESSE E, ON THE INTEREST AMOUNT WHICH HAD BECOME DUE UNDER S. 214(1). 14. FURTHER, THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CHIMANLAL S. PATEL VS. CIT (1994) 210 ITR 419 (GUJ) HAS HELD THA T IRRESPECTIVE OF THE DUE DATES OF PAYMENT OF ADVANCE TAX INSTALLMENTS, I NTEREST WILL BE PAYABLE UNDER S. 214 IF THE ENTIRE AMOUNT OF ADVANC E TAX IS PAID ON OR BEFORE THE END OF THE FINANCIAL YEAR; FURTHER, INTE REST IS ALSO ALLOWABLE ON THE AMOUNT OF INTEREST TILL THE DATE OF ACTUAL PAYM ENT. I TA NO244/AHD/2004, ITA NO245/AHD/2004. M/S.STEELCO GUJARAT LTD. ASST.YEAR-1993 -94, 1994-95 - 7 - 15. IN VIEW OF THE ABOVE DECISION, IN OUR CONSIDERE D OPINION THE LEARNED ASSESSING OFFICER SHOULD HAVE GRANTED THE R EFUND IMMEDIATELY TO THE ASSESSEE ON 20.05.2002 ON PASSING OF THE APPEAL EFFECT ORDER. FURTHER, IN OUR CONSIDERED OPINION AN ORDER IS SET TO BE PASSED NOT ONLY WHEN IT IS MADE AND KEPT IN THE FILE BUT WHEN THE S AME IS PUT IN A MOTION FROM WHICH THE SAID CANNOT BE RETRIEVED BY THE LEAR NED ASSESSING OFFICER. PASSING DENOTES HANDING OVER. WE DO NOT FIND ANY ER ROR IN THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) AND DO NOT FIND ANY FORCE IN THE GROUND OF THE APPEAL OF THE REVENUE. T HEREFORE, THIS GROUND OF APPEAL IS DISMISSED. 16 IN THE RESULT, THE APPEALS OF THE REVENUE ARE DI SMISSED. ORDER SIGNED, DATED AND PRONOUNCED IN THE COURT ON 11/09/2009. SD/- SD/- ( H.L. KARWA ) ( N.S. SAINI ) JUDICIAL MEMBER ACCO UNTANT MEMBER AHMEDABAD; DATED 11/09/ 2009 PARAS # COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS)-XIV, AHMEDABAD. 5. THE DR, AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT.REGISTRAR), ITAT, AHMEDABAD