ASHISH FISCAL SERVICES P. LTD, MUMBAI V. DCIT 3(1), MUMBAI

ITA 2573/MUM/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3845 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 3 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-08-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 05-05-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 16-04-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ARJU GARODIA
• Section: 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI BEFORE SHRI SANJAY ARORA , A M AND SHRI RAM LAL NEGI, JM ./ I.T.A. NO. 2573/MUM/2014 ( / ASSESSMENT YEAR: 2008 - 09) ASHISH FISCAL SERVICES PVT. LTD. 115, MAKER CHAMBERS - III, NARIMAN POINT, MUMBAI - 400 021 / VS. DY. CIT - 3(1), AAYAKAR BHAVAN, M. K. MARG, MUMBAI - 400 020 ./ ./ PAN/GIR NO. AAACA 3319 F ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : SHRI JITENDRA JAIN / RESPONDENT BY : MS. ARJU GARODIA / DATE OF HEARING : 05.5.2016 / DATE OF PRONOUNCEMENT : 02 .8.2016 / O R D E R PER SANJAY ARORA, A. M.: THIS IS AN APPEAL BY THE ASSESSEE DIRECTED AGAINST THE ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 5 , MUMBAI (CIT(A) FOR SHORT) DATED 15.1.2014 , DISMISSING THE ASSESSEES APPEAL CONTESTING ITS ASSESSMENT U/S.143(3) OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER) FOR THE ASSESSMENT YEAR (A.Y.) 2008 - 09 VIDE ORDER DATED 16.11.2010. 2. THE ONLY ISSUE ARISING IN THIS APPEAL BY THE ASSESSEE IS WHETHER THE A SSESSING O FFICER (AO) HAS CORRECTLY GIVEN EFFECT TO THE DIRECTION BY THE FIRST APPELLATE A UTHORITY I N THE FIRST ROUND, I.E., IN RESPECT OF THE CHARGE OF INTEREST U /S. 234C (1)(6) READ WITH FIRST PROVISO THERETO. SECTION 234C , READING AS UNDER, 2 ITA NO. 2573/MUM/2014 (A.Y. 2008 - 09) ASHISH FISCAL SERVICES PVT. LTD. VS. DY. CIT PROVIDES FOR MANDATORY CHARGE OF INTEREST ON THE SHORTFALL IN THE INSTALMENT /S OF ADVANCE TAX FALLING DUE DURING THE RELEVANT PREVIOUS YEAR , I.E., WITH REFERENCE TO THE DEFINED RATES OF ADVANCE TAX AT WHICH IT IS TO BE PAID : 234C. INTEREST FOR DEFERMENT OF ADVANCE TAX . (1) WHERE IN ANY FINANCIAL YEAR, - (A) THE COMPANY WHICH IS LIABLE TO PAY ADVANCE TAX UNDER SECTION 208 HAS FAILED TO PAY SUCH TAX OR - (I) (II) (B) THE ASSESSEE, OTHER THAN A COMPANY, WHO IS LIABLE TO PAY ADVA NCE TAX UNDER SECTION 208 HAS FAILED TO PAY SUCH TAX OR, - PROVIDED THAT NOTHING CONTAINED IN THIS SUB - SECTION SHALL APPLY TO ANY SHORTFALL IN THE PAYMENT OF THE TAX DUE ON THE RETURNED INCOME WHERE SUCH SHORTFALL IS ON ACCOUNT OF UNDER - ESTIMATE OR FAILU RE TO ESTIMATE (A) THE AMOUNT OF CAPITAL GAINS; OR (B) INCOME OF THE NATURE REFERRED TO IN SUB - CLAUSE (IX) OF CLAUSE (24) OF SECTION 2, AND THE ASSESSEE HAS PAID THE WHOLE OF THE AMOUNT OF TAX PAYABLE IN RESPECT OF INCOME REFERRED TO IN CLAUSE (A) OR CLAUSE (B), AS THE CASE MAY BE, HAD SUCH INCOME BEEN A PART OF THE TOTAL INCOME, AS PART OF THE REMAINING INSTALLMENTS OF ADVANCE TAX WHICH A RE DUE OR WHERE NO SUCH INSTALMENTS ARE DUE, BY THE 31ST DAY OF MARCH OF THE FINANCIAL YEAR. THE FIRST PROVISO THERETO, HOWEVER, EXCLUDES, APPLICATION OF SECTION 234C, WHERE AND TO THE EXTENT THE SHORTFALL IN THE PAYMENT OF ADVANCE TAX ON THE RELEVANT INCOME IS ON ACCOUNT OF UNDERESTIMATION OR FAILURE TO ESTIMATE: A) AMOUNT OF CAPITAL GAIN; OR B) AMOUNT REFERRED TO IN SECTION 2 (24) ( IX ); AND THAT THE ASSESSEE PAYS THE WHOLE OF THE TAX PAYABLE IN RESPECT OF THE INCOME REFERRED TO IN CLAUSE ( A ) OR CLAUSE (B) AS PART OF THE REMAINING INSTALMENTS OF ADVANCE TAX DUE (AFTER THE DATE/ S OF INCOME), AND WHERE NO SUCH INSTALMENT IS DUE, BY 31 ST OF MARCH OF THE RELEVANT YEAR. 3. THE AO FOUND THAT NO PART OF THE ADVANCE TAX, DUE AT RS.179.79 L ACS, WAS PAID DURING THE Y EAR, AND THE SAME WAS PAID BY WAY OF SELF - ASSESSMENT TAX ONLY , 3 ITA NO. 2573/MUM/2014 (A.Y. 2008 - 09) ASHISH FISCAL SERVICES PVT. LTD. VS. DY. CIT ON 28 . 8 . 2006 . THE ASSESSEE WAS, ACCORDINGLY, NOT ENTITLED TO ANY BENEFIT OF THE FIRST PROVISO TO SECTION 2 3 4C (1)(B) , WHICH WAS THUS RENDERED INAPPLICABLE, FURTHER NOTING THAT THE A PEX C OURT HAD IN JT. CIT VS. ROLTA INDIA LTD. [2011] 330 ITR 470 ( SC ) HELD THAT SECTION S 23 4 B AND 234C IS APPLICABLE ON INCOME DEEMED UNDER THE MAT PROVISIONS. HIS ORDER BEING CONFIRMED IN FIRST APPEAL, THE ASSESSEE IS IN SECOND APPEAL. 4. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATERIAL ON RECORD. WE FIND NO SUBSTANCE IN THE ASSESSEES CASE. THE FIRST APPELLATE AU THORITY IN THE FIRST ROUND, ON THE ASSESSEE SUBMITTING BEFORE HIM THAT ALMOS T THE ENTIRE BOOK PROFIT OF RS. 15.94 CRORES IS CO MPRISED OF CAPITAL GAIN (RS.15.92 CRORE ) , FOUND FORC E IN THE ASSESSEES ARG UMENT, EVEN AS HE, ADVERTING TO ROLTA INDIA LTD. ( SUPRA ) , REPELLED THE ASSESSEES CHARGE OF SECTION 234C BEING NOT APPLICABLE WHERE THE INCOME IS ASSESSED ON BOOK PROFIT BASIS AND, ACCORDINGLY, DIRECTED AS UNDER: 4.3.II. HOWEVER, THE SUBMISSION OF THE APPELLANT HAS FORCE. THEREFORE, THE A.O. IS DIRECTED TO COMPUTE INTEREST UNDER SECTION 234C IN ACCORDANCE WITH THE PROVISO 1 TO SECTION 234C AFTER VERIFICATION OF FACTS FROM THE RECORDS. THE FIRST APPELLATE AUTHORITY DID NOT EXAMINE THE FACTS OF THE CASE, WHERE UPON IT WAS FOUND (BY THE A.O.) THAT THE FIRST PROVISO TO S. 234C(1)(B) IS NOT APPLICABLE IN THE ADMITTED AND UNDISPUTED FACTS OF THE CASE. HE DID NOT ISSUE ANY D EFINITE FINDING, AND HI S DIRECTION TO THE A.O. MUST THEREFORE BE READ TO MEAN, I.E., IN THE CONTEXT OF THE ARGUMENT /S RAISED BEFORE HIM, AS WELL AS THE FACTS BROUGHT TO HIS NOTICE, THAT THE AO SHALL CONSIDER THE ASSESSEES CASE WITH REFERENCE TO THE APPLICABILITY OF THE FIRST PROVISO (SUPRA) , WHICH WAS PRIMA FACIE APPLICABLE. HE, IN FACT, EVEN DID NOT VERIFY THE ASSESSEES CONTENTION OF ALMOST THE ENTIRE INCOME AS COMPRISED OF CAPITAL GAIN . IT IS, ON THE CONTRARY, THE ASSESSEE, WHO IS TO BE CHARGED FOR NOT FURNISHI NG THE FULL FACTS BEFORE THE FIRST APPELLATE AUTHORITY, WHEREUPON THE ASSESSEES CLAIM FOR NON - CHARGE OF INTEREST U /S. 234 - C, IN VIEW OF THE FIRST PROVISO THERETO, BECOMES UNTENABLE. 4 ITA NO. 2573/MUM/2014 (A.Y. 2008 - 09) ASHISH FISCAL SERVICES PVT. LTD. VS. DY. CIT IN FACT, THE LD. AUTHORIZED REPRESENTATIVE ( AR ) ALSO COULD NOT BEFORE US POINT OUT ANY FALLACY ON THE MERITS OF THE AOS DECISION, BASED ON ROLTA INDIA LTD. ( SUPRA ) AND THE CLEAR LANGUAGE OF THE RELEVANT PROVISION OF LAW. THERE IS, IT I S TO BE APPRECIATED, NO ESTOPPEL AGAINST LAW. AS EXPLAINED BY THE HON BLE A PEX C OUR T IN CBI VS. K ESHUB MAHINDRA & OTHERS [IN CURATIVE PETITION NOS. 39 - 42 OF 2010 IN CRIMINAL APPEAL NOS. 1672 - 1675 OF 1996], THAT NO COURT , ITSELF INCLUDED, COULD READ THE LAW OR BE CONSTRUED TO HAVE READ I T IN A MANNER TO DEFEAT THE CLEAR PROVISION OF LAW. TO QUOTE ( OCCURRING AT PARA 4 OF THE SAID DECISION DATED 11/5/2011) : NO DECISION BY ANY COURT, THIS COURT NOT EXCLUDED, CAN BE READ IN THE MANNER AS TO NULLIFY THE EXPRESS PROVISIONS OF AN ACT OR THE CODE AND THE 1996 JUDGMENT NEVER INTENDED TO DO SO . THE ASSESSEES ARGUMENT BEFORE US OF THE DECISION BY THE A PEX C OURT IN ROLTA INDIA LTD. ( SUPRA ) BEING DATED 0 7 . 1 . 2011, I.E., AFTER THE END OF THE RELEVANT PREVIOUS YEAR , AND COULD NOT THEREFORE BE ACTED UPON BY THE ASSESSEE (DURING THE RELEVANT YEAR), IS MISCONCEIVED. A DECISION BY THE A PEX C OURT SETTLES THE LAW AS IT ALWAYS STOOD, AND THUS OPERATES RETROSPECTIVELY. RATHER, BY THAT T O KEN, THE DECISION IN SN OWCAM INDIA LTD V S. J T . CIT ( IN I NCOME T AX A PPEAL NO. 238 OF 2006 DATED 0 5 . 1 . 2009 /COPY ON RECORD ) , BEING AFTER THE CLOSE OF THE RELEVANT PREVIOUS YEAR, WOULD ALSO NOT APPLY . P ER THE SAID DECISION, THE HON BLE BOMBAY HIGH COURT, F O LL OW ING THE DECISION IN CIT V S. Q UALITY B ISCUITS LTD . [ 2000 ] 284 ITR 434 ( SC ) , APPEAL AGAINST WHICH STANDS DISMISSED BY THE A PEX C OURT, DECIDED AGAINST THE APPLICABILITY OF SECTIONS 234B AND 234C IN CASE OF COMPUTATION OF INCOME U /S. 115 JB OF THE A CT, I.E., AS PER THE BOOK PROFIT. THE SAID DECISION WOULD CLEARLY BE OF NO ASSISTANCE IN VIEW OF THE DECISION BY THE HON BLE APE X C OURT IN ROLTA INDIA LTD. ( SUPRA ) , NOTED BY THE FIRST APPELLATE AUTHORITY IN THE FIRST ROUND, REPRODUC ING THERE - FROM, AND WHICH IN FACT THE ASSESSEE DID NOT CONSTEST/ APPEAL AGAINST . IN VIEW O F THE FOREGOING , T HE LD. CIT (A) IN THE SECOND ROUND HAS CORRECTLY APPRECIA TED THE FACTS OF THE CASE, SO THAT WE ARE IN COMPLETE AGREEMENT WITH HIS ORDER. WE DECIDE ACCORDINGLY. 5 ITA NO. 2573/MUM/2014 (A.Y. 2008 - 09) ASHISH FISCAL SERVICES PVT. LTD. VS. DY. CIT 5. I N THE RESULT, THE ASSESSEES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON AUGUST 0 2 , 2016 S D / - S D / - ( RAM LAL NEGI ) (SANJAY ARORA) / JU DICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED : 0 2 .0 8 .2016 . . ./ ROSHANI , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI