Nalwa Sons Investments Ltd., Hisar V. ACIT, New Delhi

ITA 2459/DEL/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 6265 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 11 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 21-03-2016
• Assessment Year: 2003-2004
• Appeal Filed On: 26-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P DAM KANUNJNA
• Section: 244A; 54; 154

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E, NEW DELHI BEFORE SH. G.D. AGRAWAL, HONBLE VICE PRESIDENT AND SMT. BEENA A PILLAI, JM ITA NO. 2459/DEL/2013 : ASSTT. YEAR : 2003-04 NALWA SONS INVESTMENTS LTD. O.P. JINDAL MARG, HISAR. AAACJ2734R VS ACIT CIRCLE 13(1) NEW DELHI. (APPELLANT) (RESPONDENT) PAN NO. AFWPC1171P ASSESSEE BY : SH. K.V.S.R. KRISHNA, CA REVENUE BY : SH. P. DAM KANUNJN A, SR. DR DATE OF HEARING : 21.03.2016 DATE OF PRONOUNCEMENT : 29.03.2016 ORDER PER BEENA A PILLAI, J.M. THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT (A) VIDE ORDER DATED 22.02.201 3 FOR ASSESSMENT YEAR 2003-04 ON THE FOLLOWING GROUNDS OF APPEAL: 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON THE FACTS A ND CIRCUMSTANCES OF THE CASE IN DENYING THE APPELLANT INTEREST ON THE REFUND OF PRE-PAID TAXES FROM 15.3. 2004 TO 1.07.2009. THE ASSESSEE IS ENTITLED FOR INTERES T ON THE REFUND U/S 244A AND SHOULD BE ALLOWED. 2. THE CIT(A) HAVING HELD THAT FOR THE IMPUGNED YEAR UNDER CONSIDERATION THE CREDIT FOR EARLIER YEARS MA T PAYMENT HAS TO BE ALLOWED AS PRE-PAID TAXES AS DECIDED BY THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. TULSIYAN NEC LTD. 330 ITR 226, THE 2 CONSEQUENTIAL INTEREST U/S 244A STATUTORILY BECOMES DUE TO THE APPELLANT WHICH SHOULD HAVE BEEN ALLOWED . 3. THE CIT(A) HAS MISDIRECTED HIMSELF IN DECIDING AN I SSUE WHICH WAS NOT AT ALL A GROUND IN APPEAL. 4. THE APPELLANT CONTENDS THAT INTEREST ON REFUND WHIC H IS DUE ON PRE-PAID TAXES SHOULD BE ALLOWED FROM 1 ST APRIL, 2003 UPTO THE DATE OF GRANTING OF THE REFUND UNDER THE PROVISIONS OF 244A. THERE IS NO POWER UNDER THE IN COME TAX ACT GIVEN TO CIT(A) TO CURTAIL THE PERIOD OF IN TEREST ON THE REFUND. 5. THE ABOVE GROUNDS ARE INDEPENDENT AND WITHOUT PREJUDICE TO ONE AND OTHER. 6. THE APPELLANT MAY BE ALLOWED TO ADD, AMEND AND FORG O ANY OF THE GROUND AT THE TIME OF HEARING. 2. THE BRIEF FACTS OF THE CASE UNDER CONSIDERATION ARE AS BELOW: THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE YEA R UNDER CONSIDERATION ON 27. 11. 2003, DECLARING TOTAL INCO ME OF RS. 1, 74, 82, 405/-. THE ASSESSEE IN THE RETURN HAD CLAIMED A TAX CREDIT UNDER SECTION 115AA BEING THE TAX PAID UNDER THE PR OVISIONS OF SECTION 115JA 4 ASSESSMENT YEAR 1998-99, AFTER DETE RMINING THE TAX AND THEREAFTER ALLOWED MAT CREDIT UNDER SECTION 115JA. 2.1 THE RETURN WAS PROCESSED UNDER SECTION 143 (1) OF THE ACT WIDE INTIMATION DATED 15. 3. 2004 ACCEPTING THE INC OME AS FILED BY THE ASSESSEE AND ALSO GRANTING CREDIT FOR THE PREPA ID TAXES AS CLAIMED IN THE RETURN. HOWEVER THERE WAS NO MENTION IN THE SAID INTIMATION REGARDING THE TAX CREDIT DUE TO THE ASSE SSEE UNDER . MAT PROVISIONS NAMELY UNDER SECTION 115JA AND NO CREDIT WAS ALLOWED TO THE ASSESSEE THOUGH IT WAS THE DUTY OF THE LD. A O TO HAVE LOOKED INTO THE RECORD AND EL OF THE CLAIM OF THE ASSESSEE . 2.2 AGGRIEVED BY THE NON-AVAILABILITY OF MAT CREDIT , ASSESSEE FILED A RECTIFICATION APPLICATION UNDER SECTION 154 AGAINST THE ORDER 3 OF 143 (3) FOR A LOVING THE MAT CREDIT OR STOP THE LD.CIT(A) AS WELL AS COORDINATE BENCH OF THIS HONBLE TRIBUNAL WORD O F THE CONSIDERED OPINION THAT THE CLAIM OF TAX CREDIT UNDER SECTION 115JAA OF THE ACT COULD BE AGITATED AGAINST THE ORDER OF 143 (1) OR 1 43 (3) OF THE ACT AND CANNOT BE RECTIFIED FILED UNDER SECTION 154 OF THE ACT. THIS HONBLE TRIBUNAL WIDE ORDER DATED 20. 03. 2009 REJE CTED THE APPEAL OF THE ASSESSEE. 2.3 THE ASSESSEE ACCORDINGLY PREFERRED AN APPEAL AG AINST THE ORDER OF INTIMATION DATED 15. 03. 2004 BEFORE THE L D.CIT (A) WHEREIN THE ASSESSEE RAISED THE GROUND OF NON-DETER MINATION OF MAT CREDIT UNDER SECTION 115JA OF THE ACT. BEFORE T HE LD.CIT(A), THE ASSESSEE RELIED UPON THE DECISION OF HONBLE SU PREME COURT IN THE CASE OF NTPC, REPORTED IN 2 TO 9 ITR 383 AND MA HA LAKSHMI TEXTILES REPORTED IN 66 IETR 710. 2.4 THE LD.CIT(A) OBSERVED THAT THERE IS A DELAY OF 5 YEARS AND ONE MONTH IN FILING THE APPEAL BEFORE HIM AS THE AS SESSEE WAS PURSUING THE APPLICATION FILED BY A UNDER SECTION 1 54 OF THE ACT. THE LD.CIT(A) OPINED THAT THE DELAY IN FILING OF TH IS APPEAL WAS NOT DELIBERATE ON BEHALF OF THE ASSESSEE. AS THERE IS A SUBSTANTIAL JUSTICE IN THE ISSUE FOR CONSIDERATION THE LD.CIT(A ) CONDONED THE DELAY. 2.5 THE LD. CIT(A) HELD AS UNDER: IT IS UNDISPUTED THAT MAT WAS PAID BY APPELLANT AS CLAIMED IT IS WELL SETTLED POSITION OF LAW THAT CRE DIT OF MAT IS TO BE ALLOWED AS PREPAID TAXES AS DECIDED BY ORD ERABLE APEX COURT IN C I T VS. TULSYAN NEC LTD. REPORTED I N 330 ITR 226. IN THIS VIEW OF THE MATTER, THE APPELLANT DESERVES LAWFUL RELIEF. I, THEREFORE DIRECT THE CREDIT FOR M AT MAY BE ALLOWED AS PREPAID TAXES FOR THE PRESENT A BY AFTER DUE VERIFICATION. 4 FOLLOWING A WRONG LINE OF LITIGATIO N, THE 4 APPELLANT MUST SUFFER THE CONSEQUENCE. IN MY CONSID ERED VIEW, IT WOULD SERVE THE INTEREST OF JUSTICES INTE REST ON REFUND, IF ANY, IS DENIED TO THE APPELLANTS FROM T HE DATE OF THE ORDER UNDER SECTION 143 (1), I.E. 15. 03. 2004, UPTO THE DATE OF FILING OF THE PRESENT APPEAL ON 01. 07. 200 9 THIS WOULD BE IN ACCORDANCE WITH THE OBSERVATIONS OF HON BLE SUPREME COURT IN THE CASE OF TULSYAN NEC LTD. CITED SUPER. I DIRECT THE AO ACCORDINGLY. 2.6 AGGRIEVED BY THE ORDER OF LD.CIT(A), THE ASSESS EE IS IN APPEAL BEFORE US ON THE ISSUE OF ENTITLEMENT OF INT EREST ON THE REFUND UNDER SECTION 244 A OF THE ACT. 3. WE HAVE PRODUCED THE DOCUMENTS ON RECORD AND JUDGEMENTS RELIED UPON BY THE LD. AR. 3.1 IT IS UNDISPUTED FACT THAT MAT CREDIT IS ALLOWA BLE TO THE ASSESSEE UNDER SECTION 115JAA OF THE ACT THE LD. CI T(A) HAS RESPECTFULLY FOLLOWING THE DECISIONS OF HONBLE SUP REME COURT IN THE CASE OF TULSYAN NEC (SUPRA) HAS RIGHTLY ALLOWED THE MAT CREDIT. HOWEVER THE LD.CIT(A) HAS TRAVELLED BEYOND HIS POWERS IN NOT ALLOWING THE INTEREST ON THE REFUND OF PREPAID TAXES FROM 15.030 2000 401. 07. 2009 BEING THE INTERIM PERIOD DURING WHICH THE ASSESSEE WAS PURSUING THE RECTIFICATION A PPLICATION UNDER SECTION 154 OF THE ACT. 3.2 AT THIS JUNCTURE WE REFERRED TO THE JUDGEMENT O F HONBLE SUPREME COURT IN THE CASE OF UOI VS. TATA CHEMICALS LTD REPORTED IN 363 ITR 658, WHEREIN THE HONBLE SUPREM E COURT HAS HELD AS UNDER: THE LANGUAGE OF SECTION 244A OF THE INCOME TAX ACT , 1961, IS PRECISE, CLEAR AND UNAMBIGUOUS. SUBSECTION (1) O F SECTION 244A SPEAKS OF INTEREST ON REFUND OF AMOUNT S DUE TO AN ASSESSEE UNDER THE ACT. THE ASSESSEE IS ENTIT LED TO REFUND WITH INTEREST THEREON AS CALCULATED IN ACCOR DANCE WITH CLAUSES(A) AND(B) OF SUBSECTION (1) OF SECTION 244A. IN 5 CALCULATING THE INTEREST PAYABLE, THIS SECTION PROV IDES 4 DIFFERENT DATES FROM WHICH THE INTEREST IS TO BE CA LCULATED. CLAUSE (A) OF SUBSECTION (1) OF SECTION 244A TALKS OF PAYMENT OF INTEREST ON THE AMOUNT OF TAX PAID UNDER SECTION 155WJ, TAX COLLECTED AT SOURCE UNDER SECTIO N 206C, TAXES PAID BY WAY OF ADVANCE TAX, TAXES TREATED AS PAID UNDER SECTION 199 DURING THE FINANCIAL YEAR IMMEDIA TELY PRECEDING THE ASSESSMENT YEAR. UNDER THIS CLAUSE, T HE INTEREST SHALL BE PAYABLE FOR THE PERIOD STARTING F ROM THE 1 ST DAY OF THE ASSESSMENT YEAR TO THE DATE OF THE GRANT OF REFUND. NO INTEREST IS PAYABLE IF THE EXCESS PAYMEN T IS LESS THAN 10% IN STOCKS OF THE TAX DATA MINED UNDER SECT ION 143 (1) OF THE ACT OR ON REGULAR ASSESSMENT. CLAUSE (B) OF SUBSECTION (1) OF 244A OPENS WITH THE WORDS IN ANY OTHER CASE THAT MEANS IN ANY CASE OTHER THAN THE AMOUNTS PAID UNDER CLAUSE (A) OF SUBSECTION (1) OF SECTION 244A. UNDER THIS CLAUSE, THE RATE OF INTEREST IS TO BE CALCULAT ED AT THE RATE OF ONE AND A HALF PERCENT. PER MONTH OR A PART OF A MONTH PRICED IN THE PERIOD OR THE PERIODS FROM THE DATE OR, AS THE CASE MAY BE, EITHER THE DATES OF PAYMENT OF THE TAX OR THE PENALTY TO THE DATE ON WHICH THE REFUND IS G RANTED. THE EXPLANATION APPENDED TO CLAUSE (B) OF THIS SUBS ECTION CLARIFIES THAT THE DATE OF PAYMENT OF TAX OR PENAL TY WOULD MEAN THE DATE ON AND FROM WHICH THE AMOUNT OF TAX O R PENALTY SPECIFIED IN THE NOTICE OF DEMAND ISSUED UN DER SECTION 156 IS PAID IN EXCESS OF SUCH DEMAND. INTEREST PAYMENT IS A STATUTORY OBLIGATION AND NONDISCRETIONARY IN NATURE TO THE ASSESSEE. THE LAN GUAGE EMPLOYED IN SECTION 244A OF THE ACT IS CLEAR AND PL AIN. IT GRANTS A SUBSTANTIVE RIGHT OF INTEREST AND IS NOT PROCEDURAL. THE PRINCIPAL OF GRANT OF INTEREST ARE THE SAME AS UNDER THE PROVISIONS OF SECTION 244 APPLICABLE T O THE ASSESSMENTS BEFORE 01/04/1989, ALBEIT WITH CLARITY OF APPLICATION AS CONTAINED IN SECTION 244A. CIRCULAR NO. 549, DATED 31/10/1989, CLARIFIED THE P URPOSE AND OBJECT OF INTRODUCING SECTION 244A OF THE ACT T O REPLAY SECTION 214, 243 AND 2 FOR 4 OF THE ACT AS PROVIDIN G FOR PAYMENT OF INTEREST BY THE DEPARTMENT FOR DELAY IN GRANT OF REFUNDS SINCE THERE WERE SOME LACUNAE IN THE EAR LIER PROVISIONS WITH REGARD TO NON-PAYMENT OF INTEREST B Y THE 6 GOVERNMENT TO THE ASSESSEE FOR MONEY REMAINING WITH THE GOVERNMENT. 3.3 RESPECTFULLY FOLLOWING THE ABOVE DECISION OF HO NBLE SUPREME COURT IN TATA CHEMICALS LTD SUPRA WE ARE OF THE CONSIDERED OPINION THAT THE ASSESSEE IS ENTITLED FO R REFUND OF INTEREST UNDER SECTION 244A. IT IS THEREFORE DIRECT ED THAT THE ASSESSEE MAY BE GRANTED THE REFUND WHICH IS DUE ON PREPAID TAXES FROM 01/04/2003 UPTO THE DATE OF GRANTING OF THE REFUND UNDER THE PROVISIONS OF SECTION 244A OF THE ACT. AC CORDINGLY THE GROUNDS RAISED BY THE ASSESSEE STANDS ALLOWED 4. IN THE RESULT, THE APPEAL STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 29.03.2016 SD/- SD/- (G.D. AGRAWAL) (BEENA A PILLAI) VICE PRESIDENT JU DICIAL MEMBER DATED: 29.03.2016 *KAVITA ARORA COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR