ACIT, Range-II, V. NHPC LTd.,

ITA 2609/DEL/2008

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 81785 (ITAT-DELHI)
• Duration Of Justice: 6 year(s) 1 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 27-08-2014
• Assessment Year: 2002-2003
• Appeal Filed On: 01-08-2008
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SUNIL BAJPAI
• Assessee Lawyers: RANO JAIN CAS
• Keywords: Retrospective amendment; Question of law; Tax effect
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH F : NEW DELHI) BEFORE SHRI B.C. MEENA, ACCOUNTANT MEMBER AND SHRI C.M. GARG, JUDICIAL MEMBER ITA NO.2609/DEL./2008 (ASSESSMENT YEAR : 2002-03) ACIT, RANGE II, VS. M/S. NHPC LIMITED, FARIDABAD. SECTOR 33, NHPC COMPLEX, FARIDABAD. (PAN : AAACN0149C) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI VED JAIN & MS. RANO JAIN, CAS REVENUE BY : SHRI SUNIL BAJPAI, CIT DR ORDER PER B.C. MEENA, ACCOUNTANT MEMBER : THIS APPEAL FILED BY THE REVENUE EMANATES FROM THE ORDER OF THE CIT (APPEALS), FARIDABAD DATED 26.05.2008. THE REV ENUE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL :- 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) WAS RIGHT IN DELETING THE INTEREST CHARGED U / S 234D O F THE INCOME TAX ACT AMOUNTING TO RS.33,88,391/- IN RESPECT OF ASSESSMENT YEAR 2002-03 BY HOLDING THAT THE CHARGIN G OF INTEREST U / S 234D OF THE INCOME TAX ACT IS A SUBS TANTIVE AND NOT PROCEDURAL LAW AND THE INTEREST U/S 234D CANNOT BE CHARGED IN RESPECT OF THE ASSESSMENT YEARS PRIOR TO COMING INTO FORCE OF THE SAID PROVISION I.E. 01-06-2003? 2. THAT THE TAX EFFECT IN THIS CASE IS RS. 33,88,39 1/- WHICH IS ABOVE THE MONETARY LIMITS PRESCRIBED BY THE BOAR DS ITA NO.3904/DEL/2013 2 INSTRUCTION NO. 5 OF 2008 DATED 15-05-2008 FOR FILI NG APPEAL BEFORE THE HONBLE ITAT. 3. THAT THE APPELLANT CRAVES FOR THE PERMISSION TO ADD, DELETE OR AMEND THE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING OF APPEAL. 2. THUS, THE ONLY ISSUE INVOLVED IN THIS APPEAL IS LEVY OF INTEREST U/S 234D OF THE INCOME-TAX ACT, 1961. 3. AT THE OUTSET OF THE HEARING, THE LD. AR WAS FAI R ENOUGH TO CONCEDE THAT THIS ISSUE IS COVERED AGAINST THE ASSESSEE COM PANY IN VIEW OF RETROSPECTIVE AMENDMENT MADE BY THE FINANCE ACT, 20 12 WHEREBY EXPLANATION 2 WAS INSERTED TO SECTION 234D AS UNDER :- EXPLANATION 2 FOR THE REMOVAL OF DOUBTS, IT IS HEREBY DECLARED THAT THE PROVISIONS OF THIS SECTION SHALL ALSO APPLY TO AN ASSESSMENT YEAR COMMENCING BEFORE THE 1 ST DAY OF JUNE, 2003 IF THE PROCEEDINGS IN RESPECT OF SUCH AS SESSMENT YEAR IS COMPLETED AFTER THE SAID DATE. 4. THIS ISSUE HAS COME UP BEFORE THE BOMBAY HIGH CO URT IN THE CASE OF CIT VS. INDIAN OIL CORPORATION LTD. (2012) 78 DT R (BOM) 361 WHEREIN HON'BLE HIGH COURT HELD AS UNDER :- 26. A STATUTE COULD BE RETROSPECTIVE IN OPERATION BEING EXPRESSLY STATED OR BY NECESSARY IMPLICATION. THE C ASE OF THE REVENUE IS THAT SECTION 234D AS INTRODUCED ON 1 ST JUNE, 2003 WAS RETROSPECTIVE IN OPERATION BY NECESSARY IMPLICA TION. HOWEVER, AS DOUBTS WERE RAISED ABOUT ITS RETROSPECT IVITY, THE SAME WAS CLARIFIED BY ADDING AN EXPLANATION TO SECT ION 234D BY FINANCE ACT, 2012. UNDER THE ACT WHAT IS BROUGHT TO TAX IS NOT THE INCOME OF THE ASSESSEE IN THE ASSESSMENT YE AR BUT THE INCOME OF THE ASSESSEE IN THE PREVIOUS YEAR. TH E LIABILITY TO TAX ARISES ON ACCOUNT OF THE FINANCE ACT WHICH F IXES THE RATE AT WHICH THE TAX IS TO BE PAID. THE LAW TO BE APPLIED IS AS EXISTING ON THE 1ST DAY OF APRIL OF THE PREVIOUS YE AR. IN ITA NO.3904/DEL/2013 3 SUPPORT THE COUNSEL FOR THE RESPONDENT RELIED UPON THE DECISION OF THE SUPREME COURT IN KARIMTHURAVI TEA ESTATE LTD. V. STATE OF KERALA 60 ITR 262, MAHARAJAH OF PITHAPU RM V. CIT 13 ITR 221 (PC) AND CIT V. SCINDIA STEAM NAVIGATION CO. LTD. 42 ITR 539. THE AFORESAID DECISIONS ARE NOT RELEVANT FOR OUR PURPOSE PARTICULARLY, IN VIEW OF THE FACT THAT EXPLANATION 2 TO SECTION 234D OF THE ACT AS INTRODUCED BY THE FIN ANCE ACT,2012 BEING DECLARATORY IN NATURE WOULD BE RETRO SPECTIVE. THIS AMENDMENT MAKE IT CLEAR THAT IT SHALL APPLY AS SESSMENT YEARS EVEN PRIOR TO 1/06/2003. 27. IN VIEW OF THE ABOVE, WE HOLD THAT THE DECISION OF THE TRIBUNAL IN ITO V. EKTA PROMOTERS PVT. LTD. REPORTED IN 113 ITD 719 WHICH HAS BEEN FOLLOWED IN THE IMPUGNED ORDER BY THE TRIBUNAL IS NOT CORRECT. ONE MORE ASPECT OF THE MATTER WHICH MUST BE BORNE IN MIND IS THAT TILL SUCH TIME AS THE ASSESSMENT PROCEEDINGS ARE COMPLETED IN RESPECT OF ANY ASSESSMENT YEAR, THE AMENDMENT MADE TO THE ACT WOUL D BE APPLICABLE EVEN IN CASE OF PENDING PROCEEDINGS. IT IS NOT THE CASE OF THE RESPONDENT THAT THE PROCEEDING IN REGAR D TO REFUND WHICH HAS BEEN GRANTED UNDER SECTION-143(1) OF THE ACT ARE CONCLUDED AND FINAL. THE REFUND WHICH HAS B EEN GRANTED UNDER SECTION 143(1) OF THE ACT IS PROVISIO NAL, TO BE FINALLY DETERMINED WHEN FINAL ASSESSMENT ORDER IS P ASSED UNDER SECTION 143(3) OF THE ACT. EXPLANATION-2 TO S ECTION 234D OF THE ACT MAKES IT CLEAR THAT IT WOULD BE APP LICABLE TO PENDING PROCEEDINGS I. E. WHERE ASSESSMENTS IN RESP ECT OF SUCH ASSESSMENT YEAR IS NOT COMPLETED ON 1/6/2003. 28. MR. SURESH KUMAR SUBMITTED THAT AS AN ASSESSEE IS ENTITLED TO INTEREST WHERE THERE IS ANY DELAY IN MA KING THE REFUND, IT IS ONLY FAIR THAT AN ASSESSEE WHO HAS EN JOYED THE BENEFIT OF EXCESS REFUND GRANTED TO IT MUST REFUND THE SAME ALONG WITH INTEREST FROM THE DATE OF RECEIPT OF REF UND TO THE DATE OF FINAL ASSESSMENT. THE APEX COURT IN SANDVIK ASIA LTD. V. CIT REPORTED IN AIR 2006 (S. C.) 1223 GRANTED INTEREST ON DELAYED PAYMENT OF INTEREST BY THE REVENUE TO TH E ASSESSEE. CONSIDERING THE VIEW WE HAVE TAKEN, IT I S NOT NECESSARY TO DECIDE THIS QUESTION BASED ON EQUITABL E GROUNDS. 29. IN VIEW OF THE ABOVE, THE QUESTION OF LAW IS AN SWERED IN THE NEGATIVE I.E. IN FAVOUR OF THE APPELLANT-REV ENUE AND AGAINST THE RESPONDENT-ASSESSEE. ITA NO.3904/DEL/2013 4 5. IN VIEW OF THE ABOVE FACTS, WE HOLD THAT THE INT EREST IS CHARGEABLE UNDER SECTION 234D IN RESPECT OF THE ASSESSMENT YEA R UNDER CONSIDERATION I.E. 2002-03 AND ALLOW THE APPEAL OF THE REVENUE. 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE S TANDS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THIS 30 TH DAY OF SEPTEMBER, 2014. SD/- SD/- (C.M. GARG) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED THE 30 TH DAY OF SEPTEMBER, 2014/TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A), FARIDABAD. 5.CIT(ITAT), NEW DELHI. AR/ITAT