HEMA NATARAJAN, MUMBAI V. ITO 22(2)(1), MUMBAI

ITA 2936/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 48559 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 07-04-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 13-04-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R S SRIVASTAV
• Keywords: Revised return
• Section: 244A; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES, H, MUMBAI BEFORE SHRI J SUDHAKAR REDDY, ACCOUNTANT MEMBER AND SHRI VIJAY PAL RAO, JUDICIAL MEMBER ITA NO. 2936/MUM/2010 (ASSESSMENT YEAR 1996-97) SMT.HEMA NATARAJAN 1302, SOUMYA TOWER 4THCROSS ROAD, OPP, GANDHI MAIDAN CHEMBUR, PAN:AAEPN8392G .APPELLANT VS INCOME TAX OFFICER WARD 22(2)(1), MUMBAI. .. RESPONDENT ASSESSEE BY : SHRI K GOPAL REVENUE BY :SHRI R S SRIVASTAV O R D E R PER VIJAY PAL RAO THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 15.02.2010 OF CIT(A) FOR THE ASSESSM ENT YEAR 1996-97 ARISING FROM THE ORDER PASSED UNDER SECTIO N 154 OF THE ACT. 2. THE ASSESSEE HAS RAISED FOLLOWING EFFECTIVE GROU NDS IN THIS APPEAL: 1. THE LD. CIT(A) ERRED IN CONFIRMING THE ORDER PASSED BY THE AO DATED 7.10.2008 AND FAILED TO APPRECIATE THAT THE AO HAS NOT GIVEN EFFECT TO THE ITA NO. 2936/UM/2010 (ASSESSMENT YEAR 1996-97) 2 ORDER OF THE CIT(A) DATED 16.01.2006 AS PER THE DIRECTION CONTAINED THEREIN. HENCE THE ORDER DATED 7.10.2008 IS NOT AS PER THE DIRECTION OF THE LD CIT (A); 2. THE LD. CIT(A) ERRED IN CONFIRMING THE ORDER PASSED BY THE AO DATED 7.10.2008 REJECTING APPELLANTS CLAIM OF INTEREST FOR THE PERIOD THE GR ANT OF REFUND WAS DELAYED; 3. THE LD. CIT(A) FAILED TO APPRECIATE THAT THE DELAY IN GRANTING REFUND WAS NOT CAUSED DUE TO ANY OMISSION OR COMMISSION COMMITTED BY THE APPELLANT. HENCE THE REJECTION OF THE CLAIM IS NOT AT ALL JUST IFIED HENCE THE SAME MAY BE GRANTED: 3. ONLY ISSUE ARISES IN THIS APPEAL OF THE ASSESSEE WHETHER THE ASSESSEE IS ENTITLED FOR INTEREST U/S 244A ON T HE ADVANCE TAX PAID BY THE ASSESSEE AS PER THE ORIGINAL RETUR N OF INCOME AND SUBSEQUENTLY FILED THE REVISED RETURN OF INCOM E WITH THE, CLAIM OF REFUND OF TAX ON THE GROUND THAT THE ADVAN CE TAX WAS WRONGLY PAID. 4. FACTS LEADING TO THE ISSUE ARE THAT THE ASSESSE E FILED ORIGINAL RETURN OF INCOME ON 31.08.1996 FOR THE YEA R UNDER CONSIDERATION AND CLAIMED REFUND OF RS.2501/-. THE RETURN WAS PROCESSED U/S 143(1)(A). THEREAFTER REVISED RE TURN CLAIMING REFUND OF RS.5,70,287/- WAS FILED ON 1.01 .1998. THE REVISED RETURN WAS PROCESSED U/S 143(1). SUBSEQUENT LY A REFUND O F RS.10,11,443/- WAS GRANTED TO THE ASSESS EE ON 26.7.2004. THE AO DID NOT GRANT INTEREST U/S 244A OF THE ACT. THE ASSESSEE FILED APPLICATION U/S 154, WHICH WAS REJECTED BY ITA NO. 2936/UM/2010 (ASSESSMENT YEAR 1996-97) 3 THE AO ON THE GROUND THAT THERE IS NO PROVISIONS U NDER THE INCOME TAX ACT, 1961 FOR ALLOWING INTEREST ON EXCE SS PAYMENT OF SELF ASSESSMENT TAX. ON APPEAL, THE CIT(A) CONF IRMED THE ACTION OF THE AO. THE CIT(A) WAS ALSO OF THE OPINIO N THAT THE ISSUE IS A DEBATABLE ISSUE AND THE SAME CANNOT BE RESOLVED U/S 154 OF THE ACT. 4.1 AGGRIEVED BY THE ORDER OF THE CIT(A), THE ASS ESSEE FILED AN APPEAL BEFORE THIS TRIBUNAL. THE TRIBUNA L ALLOWED THE APPEAL OF THE ASSESSEE. WHILE GIVING EFFECT TO THE TRIBUNAL ORDER, THE CIT(A) HAS HELD AS UNDER : IT IS FURTHER NOTEWORTHY THAT THE RELIEF ARGUED FO R U/S 154 ON ACCOUNT OF INTEREST ON EXCESS PAYMENT OF TAXES BY WAY OF SELF ASSESSMENT TAX IS HIGHLY DEBATABLE AS EVIDENT FROM THE ABOVE DISCUSSION AND THIS ITSELF KEEPS THIS MATTER OUT OF THE PURVIEW O F PROVISIONS OF SECTION 154 WHERE THE DECISION CAN BE TAKEN EITHER WAY ONLY AFTER A LONG DRAWN PROCESS OF DELIBERATION AND ARGUMENTS LEAVING NO SCOPE FOR MISTAKE BEING APPARENT FROM RECORD. THUS, THERE APPEARS NO NEED TO INTERFERE WITH THE ACTION OF TH E AO TO REJECT THE PETITION U/S 154 ON THIS COUNT. HOWEVER, THE LD. AO IS DIRECTED TO ACCEPT THE PETIT ION U/S 154 ON OTHER GROUNDS IF ANY 4.2 THE AO WHILE GIVING EFFECT TO THE ORDER OF THE CIT(A), THE AO HELD AS UNDER : YOU HAVE FILED ORIGINAL RETURN OF INCOME FOR ASSESSMENT YEAR 1996-97 ON 31.8.1996 IN WHICH YOU HAVE PAID TAXES I.E. ADVANCE TAX AND CLAIMED REFUND OF RS.2501. THE RETURN WAS PROCESSED U/S 143(1)(A) AND INTIMATION ALONG WITH CHALLANS OF RS.14628/- W AS ITA NO. 2936/UM/2010 (ASSESSMENT YEAR 1996-97) 4 SENT TO YOU. AFTERWARDS, YOU HAVE FILED RETURN OF 1.1.98 IN REFUND OF RS.570287/- WAS CLAIMED. THIS RETURN WAS PROCESSED. AFTER A TOTAL REFUND OF RS.10,11,443/- WAS GRANTED TO YOU AS ON 26.7.2004 O F RS.9,34,705/- AND RS.76738/- ON 6.2.2005. WHILE GRANTING REFUND, INTEREST UNDER SECTION 244A OF RS.934705/- AND RS.76738/- ON 6.2.2005. WHILE GRANTING REFUND, INTEREST U/S 244A WAS GRANTED FROM 1.1.98 TILL DATE OF ISSUE OF REFUND. WHILE GRANTING REFUND, INTEREST HAS BEEN CORRECTLY GRANTED FROM 1.1.98 BY FOLLOWING CIRCULAR NO. 549 DATED 31.10.19 89 REPORTED IN 182 ITR (ST) 49 IN WHICH IT IS STATED THAT DELAY IN GRANTING REFUND, IF ANY ATTRIBUTED TO THE ASSESSEE WILL BE EXCLUDED FROM THE PERIOD FOR WHICH INTEREST IS PAYABLE. THEREFORE, YOUR APPLICATION F OR GRANTING OF FURTHER INTEREST IS NOT IN ORDER. THERE FORE, YOU ARE ELIGIBLE FOR RANTING FURTHER INTEREST U/S 2 44A OF THE ACT 4.3 AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE PREFERRED APPEAL BEFORE THE CIT(A) BY RAISING THE F OLLOWING GROUNDS: 1. THE LD. AO ERRED IN PASSING THE ORDER DATED 7.10.2008 REFUSING TO GIVE EFFECT TO THE ORDER PASS ED BY THE LD. CIT(A) DATED 16.1.2006 AND 2. THE LD. AO FAILED TO APPRECIATE THAT THE LD. CIT(A) HAS DIRECTED HIM TO ACCEPT THE APPLICATION U /S 154 VIDE ORDER DATED 16.01.2006. THE ORDER PASSED ON 7.10.2008 IS IN BREACH OF THE SAME. HENCE THE A O MAY BE DIRECTED TO GIVE EFFECT TO THE ORDER DATED 16.1.2006 4.4 DURING THE COURSE OF ASSESSMENT PROCEEDINGS, TH E ASSESSEE FREQUENTLY MADE A CLAIM OF INTEREST U/S 24 4A. 5. THE CIT(A) OBSERVED THAT THE AO WHILE GIVING EF FECT TO THE ORDER OF CIT(A) HAS COMPLIED WITH THE ORDER AND AS SUCH THERE IS NO MISTAKE APPARENT IN THE ORDER DATED 7.1 0.2008. THE ITA NO. 2936/UM/2010 (ASSESSMENT YEAR 1996-97) 5 CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE VIDE IM PUGNED ORDER. 6. BEFORE US, THE LEARNED AR OF THE ASSESSEE HAS SU BMITTED THAT THE ASSESSEE IS ENTITLED FOR INTEREST U/S 244A FROM THE DATE OF THE ADVANCE TAX PAID TILL THE DATE OF THE R EFUND ORDER. WHEREAS THE AO GRANTED THE INTEREST ONLY FROM THE DATE OF REVISED RETURN TILL THE DATE OF REFUND. THE MAIN CONTENTION OF THE ASSESSEE IS BASED ON THE PREMISES THAT WHEN THE AMOUNT OF ADVANCE TAX WAS WITH THE DEPARTMENT THEN THE ASS ESSEE IS ENTITLED FOR INTEREST ON REFUND FOR THE ENTIRE PERI OD DURING WHICH THE AMOUNT REMAINED WITH THE DEPARTMENT. WH EN THE ADVANCE TAX PAID BY THE ASSESSEE WAS ACCOUNTED WI TH THE REVENUE FROM THE DATE ON WHICH THE TAX ARE PAID INT O TREASURY AND THE SAID AMOUNT BECOME DUE TO THE ASSESSEE AS E XCESS TAX PAID THEN THE ASSESSEE IS ENTITLED FOR THE INTE REST SO LONG THE EXCESS AMOUNT WAS REMAINED WITH THE DEPARTMENT. 7. ON THE OTHER HAND THE LEARNED DR RELIED UPON THE ORDERS OF THE LOWER AUTHORITIES AND SUBMITTED THAT THE ASS ESSEE PAID THE ADVANCE TAX AS PER HIS OWN CALCULATION.. THERE IS A TIME GAP BETWEEN THE ORIGINAL RETURN AND THE REVISED RET URN FILED. THE ASSESSEE CLAIMED REFUND ON THE BASIS OF REVISED RETURN. THE ADVANCE TAX PAID BY THE ASSESSEE WAS NOT AS PER ANY ITA NO. 2936/UM/2010 (ASSESSMENT YEAR 1996-97) 6 ORDER OR DIRECTION OF THE DEPARTMENT BUT THE ASSESS EE PAID THE ADVANCE TAX AT HIS OWN RISK AND WILL WHICH WAS FO UND AS EXCESS PAYMENT. THEREFORE, THE DELAY BETWEEN THE O RIGINAL RETURN AND THE REVISED RETURN ATTRIBUTABLE TO THE A SSESSEE FOR WHICH THE ASSESSEE IS NOT ENTITLED FOR ANY INTEREST . 8. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND TH E RELEVANT RECORD. UNDISPUTEDLY, THE ASSESSEE FILED T HE ORIGINAL RETURN ALONG WITH THE ADVANCE TAX AT HIS OWN AND SU BSEQUENTLY AFTER A GAP OF MORE THAN ONE YEAR, THE ASSESSEE F ILED THE REVISED RETURN ON 1.1.1998 CLAIMING THE REFUND OF RS.5,72,287 INSTEAD OF REFUND OF RS.2501/- CLAIMED IN THE ORI GINAL RETURN. THE REFUND WAS GRANTED ON THE BASIS OF REVISED RET URN AND FROM THE DATE OF REVISED RETURN ALONG WITH INTEREST . I.E. FROM 1.1.1998 TILL REFUND WAS PAID. AS PER THE PROVISIO NS OF SECTION 244A, THE INTEREST IS GRANTED ON THE REFUND AMOUNT WHEN IT BECOMES DUE TO THE ASSESSEE UNDER THIS ACT. THE O RIGINAL RETURN FILED BY THE ASSESSEE WAS ACCEPTED UNDER SEC TION 143(1)(A) WITHOUT ANY ADJUSTMENT IN THE TAX AS DEP OSITED BY THE ASSESSEE VOLUNTARILY ON ITS OWN. SUBSEQUENTLY, THE ASSESSEE CLAIMED REFUND IN THE REVISED RETURN FILE D. THE SAID RETURN PROCESSED AND THE REFUND OF TOTAL AMOUNT OF RS.10,11,043/- WAS GRANTED TO THE ASSESSEE. WHILE GRANTING REFUND OF EXCESS TAX PAID IN ADVANCE, THE INTEREST THERE UPON U/S 244A WAS ALSO GRANTED W.E.F. 1.1.1998 TILL THE DATE OF ISSUE ITA NO. 2936/UM/2010 (ASSESSMENT YEAR 1996-97) 7 OF REFUND ORDER. THUS, IT IS CLEAR THAT THE EXCESS PAYMENT OF TAX WAS NOT AS PER THE DIRECTION OF THE REVENUE OR DEMAND AND REFUND ALSO BECAME DUE AS PER THE REVISED RETURN F ILED BY THE ASSESSEE. THE CLAIM OF THE ASSESSEE IS NOT TENABL E BECAUSE, NO REFUND DID BECOME DUE ON THE BASIS OF THE ORIG INAL RETURN OF INCOME. WHEN THE REFUND BECAME DUE ONLY ON THE BASIS OF THE REVISED RETURN THEN NO INTEREST CAN BE GRANTED PRIOR TO THE DATE OF REVISED RETURN. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE ORDER OF THE CIT(A). 9. ACCORDINGLY, WE DISMISS THE APPEAL OF THE ASSESS EE. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DI SMISSED. PRONOUNCED IN THE OPEN COURT ON 29TH APRIL, 2011 SD SD (J.SUDHAKAR REDDY) (VIJAY PAL RAO) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, ON THIS 29 DAY OF APRIL, 2011 SRL:15411 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT CONCERNED 4. CIT(A) CONCERNED 5. DR CONCERNED BENCH BY ORDER TRUE COPY ASSTT. REGISTRAR, ITAT, MUMBAI