Deputy Commissioner of Income-tax, V. Bajaj Finance Ltd., Pune

ITA 289/PUN/2014

• Counselvise Citation: 28924514 RSA 2014
• Duration Of Justice: 11 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-01-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 14-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B C MALAKAR
• Section: 143(3); 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND MS SUSHMA CHOWLA, JUDICIAL MEMBER ITA NOS.288 TO 291/PN/2014 A.YS. : 2006-07, 2007-08, 2007-08 & 2008-09 THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE-8, PUNE. . APPELLANT VS. BAJAJ FINANCE LIMITED, C/O BAJAJ AUTO LIMITED, BOMBAY PUNE ROAD, AKURDI, PUNE 411035 PAN : AABCB1518L . RESPONDENT ASSESSEE BY : S/SHRI KIRIT KAMDAR AND NIKHIL MUTHA DEPARTMENT BY : SHRI B.C. MALAKAR DATE OF HEARING : 22-01-2015 DATE OF PRONOUNCEMENT : 29-01-2015 ORDER PER BENCH: THE CAPTIONED FOUR APPEALS BY THE REVENUE INVOLVE A COMMON ISSUE PERTAINING TO THE SAME ASSESSEE, THEREFORE, THEY HA VE BEEN CLUBBED AND HEARD TOGETHER, AND A CONSOLIDATED ORDER IS BEING P ASSED FOR THE SAKE OF CONVENIENCE AND BREVITY. 2. ITA NO.288/PN/2014 PERTAINING TO ASSESSMENT YEAR 2006-07 IS TAKEN AS THE LEAD CASE. THIS APPEAL BY THE REVENUE IS DI RECTED AGAINST AN ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-V, PUNE DAT ED 08.11.2013 WHICH IN TURN HAS ARISEN FROM AN ORDER PASSED BY THE ASSESSI NG OFFICER U/S 154 OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) DATED 14. 03.2012 PERTAINING TO THE ASSESSMENT YEAR 2006-07. ITA NO.79/PN/2012 ITA NO.521/PN/2013 3. IN THIS APPEAL, THE REVENUE HAS TAKEN THE FOLLOW ING GROUNDS OF APPEAL:- 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE CIT(A) WAS JUSTIFIED IN DIRECTING THE AO TO TAK E THE TAXABLE INCOME AT RS.64,77,81,113/- IN THE ORDER PASSED U/S 154 OF THE IT ACT, WHEN THE AO HAD RIGHTLY RETAINED THE RETURN ED INCOME OF RS.66,11,91,012/-. 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE CIT(A) HAS ERRED IN NOT CONSIDERING THE FACT TH AT THE ASSESSED INCOME CANNOT BE LOWER THAN THE RETURNED I NCOME, IGNORING THE CLEARCUT DIRECTIONS ISSUED BY THE CBDT , NEW DELHI VIDE CIRCULAR NO.549 DATED 31.10.1989, WHICH IS ALS O SUPPORTED BY THE DECISION OF BOMBAY HIGH COURT IN THE CASE OF LML LTD. VS. ACIT 66 TAXMAN 507 (BOM)(1993)? 4. BRIEFLY PUT, THE RELEVANT FACTS ARE AS FOLLOWS. THE RESPONDENT ASSESSEE FILED A RETURN OF INCOME FOR ASSESSMENT YEAR 2006-0 7 ON 04.12.2006 DECLARING TOTAL INCOME OF RS.66,11,91,012/-. IN AN ASSESSMEN T FINALIZED UNDER SECTION 143(3) OF THE ACT, DATED 27.11.2008, THE ASSESSING OFFICER, INTER-ALIA, MADE AN ADDITION OF RS.7,11,34,419/- WHICH REPRESENTED CLOS ING BALANCE OF NON- RECOGNITION OF INTEREST INCOME ON NON-PERFORMING AS SETS (NPAS). THE ASSESSEE COMPANY VIDE ITS APPLICATION DATED 02.03.2 012 CANVASSED BEFORE THE ASSESSING OFFICER THAT THERE WAS A MISTAKE APPA RENT FROM RECORD WITHIN THE MEANING OF SECTION 154 OF THE ACT AS THE OPENING BA LANCE WAS NOT REDUCED FROM THE CLOSING BALANCE OF THE INTEREST ON NPAS WH ILE COMPUTING THE DISALLOWANCE OF RS.7,11,34,419/-. THE ASSESSING OF FICER VERIFIED THE CONTENTION OF THE ASSESSEE AND FOUND THAT OPENING B ALANCE AMOUNTING TO RS.3,23,65,446/- WAS REQUIRED TO BE REDUCED FROM TH E CLOSING BALANCE WHILE DISALLOWING THE INTEREST ON NPAS. AS A CONSEQUENCE , THE TOTAL INCOME WAS REQUIRED TO BE RE-COMPUTED AT RS.64,77,81,113/- I.E . AS UNDER:- INCOME AS PER LAST ORDER U/S. 154 DATED 14.12.2011 - RS.68,01,46,630/- LESS RELIEF U/S.154 - RS. 3,23,65,517/- REVISED INCOME - RS.64,77,81,113/- ITA NO.79/PN/2012 ITA NO.521/PN/2013 5. HOWEVER, WHILE CONCLUDING IN THE ORDER PASSED UN DER SECTION 154 OF THE ACT, DATED 14.03.2012, ASSESSING OFFICER RETAINED T HE INCOME AT RS.66,11,91,012/- ON THE GROUND THAT THE ASSESSED I NCOME COULD NOT BE LESS THAN THE RETURNED INCOME. THE ASSESSEE WAS AGGRIEV ED WITH THE ACTION OF ASSESSING OFFICER IN NOT DETERMINING THE ASSESSED I NCOME AT RS.64,77,81,113/-, AS VERIFIED BY HIM. ASSESSEE CO NTESTED THE ACTION OF THE ASSESSING OFFICER IN APPEAL BEFORE CIT(A). 6. THE CIT(A) UPHELD THE PLEA OF THE ASSESSEE BY NO TICING THE AMENDMENT MADE TO SECTION 143(3) OF THE ACT BY THE FINANCE AC T (NO.2) 1998 W.E.F. 01.10.1998 WHEREBY THE ASSESSING OFFICER WAS EMPOWE RED TO REFUND ANY AMOUNT DUE TO THE ASSESSEE AS A CONSEQUENCE OF ASSE SSMENT. THE FOLLOWING DISCUSSION BY THE CIT(A) IS RELEVANT IN THIS REGARD . 10. THIS ANOMALY WAS REALIZED BY THE LEGISLATURE A ND SECTION 143(3) WAS AMENDED BY FINANCE(NO. 2) ACT, 1998 W.E.F. 01.1 0.1998 BY ISSUING THE WORDS 'OR REFUND OF ANY AMOUNT DUE TO HIM' WITH THIS AMENDMENT THERE IS NO AMBIGUITY IN THIS REGARD WHATSOEVER AND THE ASSESSING OFFICER WAS DUTY BOUND TO DETERMINE THE REVISED INC OME WHICH CAN BE LOWER THAN THE RETURNED INCOME. ACCORDINGLY, IT IS HELD THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED IN RETAINING TH E RETURNED INCOME OF 66,11,91,012/- IN THE COMPUTATION OF INCOME EVEN TH OUGH HE HAD CALCULATED TOTAL INCOME OF 64,77,81,113/-. THEREFORE, HE IS DIRECTED TO COMPUTE THE TOTAL INCOME AT 64,77,81,113/- AND THE APPELLANT GETS THE RELIEF OF 1,34,09,899/-. THE GROUND IS THUS ALLOWED. 7. AGAINST THE AFORESAID, REVENUE IS IN APPEAL BEFO RE US BY PLACING RELIANCE ON THE CBDTS CIRCULAR DATED 31.10.1989 (S UPRA) AND THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF LML LT D. VS. ACIT 66 TAXMAN 507 (SUPRA). 8. ON THE OTHER HAND, THE LEARNED REPRESENTATIVE FO R THE RESPONDENT ASSESSEE POINTED OUT THAT THE CIT(A) HAS CORRECTLY APPRECIATED THE AMENDMENTS BROUGHT TO SECTION 143(3) OF THE ACT BY THE FINANCE ACT (NO.2) 1998, WHICH CLEARLY SUPPORT THE STAND OF THE ASSESS EE THAT THE ASSESSED ITA NO.79/PN/2012 ITA NO.521/PN/2013 INCOME CAN BE BELOW THE RETURNED INCOME AND THE REF UND ARISING TO THE ASSESSEE AFTER FINALIZATION OF ASSESSMENT UNDER SEC TION 143(3) OF THE ACT CANNOT BE DENIED. IN THIS CONTEXT, OUR ATTENTION H AS ALSO BEEN DRAWN TO THE DETAILED DISCUSSION MADE BY THE CIT(A) IN THE IMPUG NED ORDER. 9. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. IN OUR CONSIDERED OPINION, THE DISCUSSION MADE BY THE CIT(A) IN PARA 10 OF THE IMPUGNED ORDER, WHICH WE HAVE EXTRACTED ABOVE, SETTLES THE CONTROVE RSY IN FAVOUR OF THE ASSESSEE. THE RELIANCE PLACED BY THE REVENUE ON TH E CBDTS CIRCULAR DATED 31.10.1989 (SUPRA) AND THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF LML LTD. VS. ACIT (SUPRA) IS QUITE MIS-PLAC ED HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE. OSTEN SIBLY, THE CBDTS CIRCULAR DATED 31.10.1989 (SUPRA) AND ALSO THE JUDGMENT OF T HE HONBLE BOMBAY HIGH COURT IN THE CASE OF LML LTD. VS. ACIT (SUPRA) ARE IN THE CONTEXT OF ASSESSMENT YEAR 1989-90 WHICH WERE PRIOR TO THE AME NDMENTS MADE TO SECTION 143(3) OF THE ACT BY THE FINANCE ACT (NO.2) 1998 W.E.F. 01.10.1998. AS SECTION 143(3) OF THE ACT STOOD FOR THE ASSESSME NT YEAR 1989-90, THERE WAS NO PROVISION FOR REFUND AFTER THE REGULAR ASSESSMEN T. IN THE PRESENT CASE, THE ASSESSMENT YEARS INVOLVED ARE 2006-07 ONWARDS, WHIC H PERTAIN TO PERIOD AFTER SECTION 143(3) OF THE ACT WAS AMENDED BY THE FINANC E ACT (NO.2) 1998 W.E.F. 01.10.1998. AS PER THE AMENDMENT, THE ASSESSMENT U NDER SECTION 143(3) OF THE ACT, INTER-ALIA, ENVISAGES THE ASSESSING OFFICER TO GRANT REFUND OF ANY AMOUNT DUE TO THE ASSESSEE CONSEQUENT TO THE ASSESS MENT AND THEREFORE, THE ASSESSING OFFICER IS STATUTORILY EMPOWERED TO DETER MINE THE REVISED INCOME WHICH CAN BE LOWER THAN THE RETURNED INCOME. THERE FORE, IN OUR VIEW, THE OBJECTION RAISED BY THE REVENUE TO THE IMPUGNED ORD ER OF CIT(A) IS UNTENABLE IN THE EYES OF THE LAW, AS IT STOOD FOR THE PERIOD UNDER CONSIDERATION. ITA NO.79/PN/2012 ITA NO.521/PN/2013 10. IN THE RESULT, THE APPEAL OF THE REVENUE FOR AS SESSMENT YEAR 2006-07 IS DISMISSED. 11. SINCE THE FACTS AND CIRCUMSTANCES IN THE BALANC E OF THREE APPEALS ARE IDENTICAL TO THAT CONSIDERED BY US IN ASSESSMENT YE AR 2006-07 (SUPRA), THEREFORE, THE SAID DECISION WOULD APPLY MUTATIS MUTANDIS IN OTHER APPEALS ALSO. 12. RESULTANTLY, ALL THE CAPTIONED APPEALS OF THE R EVENUE ARE DISMISSED. ORDER PRONOUNCED ON 29 TH JANUARY, 2015. SD/- SD/- (SUSHMA CHOWLA) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE, DATED: 29 TH JANUARY, 2015. GCVSR COPY OF THE ORDER IS FORWARDED TO: - 1) THE DEPARTMENT; 2) THE ASSESSEE; 3) THE CIT(A)-V, PUNE; 4) THE CIT-V, PUNE; 5) THE DR B BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// ASSISTANT REGISTRAR I.T.A.T., PUNE