DEPOSIT INSURANCE AND CREDIT GUARANTEE CORORATION, MUMBAI V. ACIT LTU, MUMBAI

ITA 3040/MUM/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 59865 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-02-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 08-12-2011
• Assessment Year: misc
• Appeal Filed On: 16-04-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RUPINDER BRAR
• Assessee Lawyers: YOGESH A THAR
• Keywords: Condonation of delay; TDS
• Section: 143(3); 246; 154; 15

Judgement Text

IN THE INCOME TAX APPELLATE APPELLATE APPELLATE APPELLATE TRIBUNAL MUMBAI BENCH D MUMBAI BEFORE SHRI T.R.SOOD, ACCOUNTANT MEMBER & SHRI R.S.PADVEKAR, JUDICIAL MEMBER I.T.A.NO.3040/MUM/2010 A.Y 1988-89 M/S. DEPOSIT INSURANCE AND CREDIT GUARANTEE CORPORATION, 2 ND FLOOR, RBI BLDG., OPP. MUMBAI CENTRAL STATION, NEAR MARATHA MANDIR, MUMBAI 400 008. PAN: AAACD 2094 E VS. ASST. COMMISSIONER OF I.T. LTU MUMBAI (APPELLANT) (RESPONDENT) APPELLANT BY : MR. YOGESH A. THAR. RESPONDENT BY : MS. RUPINDER BRAR. DATE OF HEARING: 14-02-2012. DATE OF PRONOUNCEMENT: 29-02-2012. O R D E R PER T.R.SOOD, AM: IN THIS APPEAL THE ASSESSEE HAS RAISED THE FOLLOWIN G GROUNDS: GROUND I: NON-ADMISSION OF APPEAL : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT(A) ERRED IN REJECTING THE APPLICATION O F THE APPELLANT ON THE GROUND THAT THE LETTER OF ASSISTANT COMMISSIONE R OF INCOME TAX, LTU, MUMBAI (THE AC) CANNOT CONSTITUTE THE SUBJEC T MATTER OF AN APPEAL U/S 246A OF THE ACT.. 2. THE APPELLANT PRAYS THAT THE APPEAL OUGHT TO BE ADMITTED BY THE CIT (A) AND DECIDE THE ISSUE BASED ON THE MERITS OF THE CASE. GROUND IL:- NON-CONDONATION OF DELAY FOR FILING THE APPEAL : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT(A) ERRED IN NOT CONDONING THE DELAY IN FILING THE APPEAL FILED BY THE APPELLANT. 2. THE APPELLANT PRAYS THAT IN THE INTEREST OF JUST ICE THE APPEAL OUGHT TO BE CONDONED. GROUND ILL:- REJECTING THE INTEREST ON REFUND U/S 2 14 OF THE ACT : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT(A) ERRED IN NOT DISCUSSING THE ISSUE ON MERITS OF THE CASE AND THEREBY REJECTING THE PLEA OF THE APPELLANT OF INTEREST DUE ON REFUND DUE TO EXCESS OF TAX DEDUCTED AT SOURCE AMOU NTING TO RS. 11,64,98,559/-. ITA NO.3040 OF 2010 2 2. THE APPELLANT PRAYS THAT THE AC BE DIRECTED TO G RANT THE APPELLANT INTEREST U/S 214 OF THE ACT ON REFUND OF RS. 11,64, 98,559/-. 2. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE FILED A RETURN OF INCOME ON JUNE 30,1988. AS PER THE RETURN, THERE WAS A REF UND OF RS.17.15 CRORES AND ASSESSEE HAD FILED THE CLAIM FOR REFUND IN FORM 30 ON 30-6- 88 ITSELF. THE ASSESSMENT WAS COMPLETED U/S.143[3] ON 20-4-1991. PART OF THE REFUND AMOUNTING TO RS.11.65 CRORES WAS GIVEN ON 16-4-91 AND THE OTHER PART OF RS.5.80 CRORES WAS GIVEN ON 2 1-2-92. ON 3-3- 3007 ASSESSEE WROTE A LETTER TO THE AO REQUESTING T O GIVE INTEREST ON THE REFUND ISSUED EARLIER. ANOTHER LETTER MAKING A REQUEST FOR INTEREST ON REFUND WAS FILED ON 2-7-08 . THE AO ON 5-3-2009 WROTE A LETTER TO THE ASSESSEE CLARIFYING THAT THE ASSESSMENT ORDER U /S.143[3] WAS PASSED ON 20-3-1991 AT A TOTAL LOSS OF RS.128.79 CR ORES AND REFUND OF RS.17,45,86,780/- WAS DETERMINED. IT WAS FURTHER CL ARIFIED THAT R.O.NO.041579 DATED 15-4-1991 FOR RS.11,64,98,559/- WAS RECEIVED BY THE ASSESSEE AND THE BALANCE SUM OF RS.5,80,88,2 21/- HAD BEEN ADJUSTED AGAINST THE DEMAND FOR AY 1989-90. THE AO FURTHER HELD THAT SINCE ASSESSEE HAD NOT MADE RECTIFICATION APPLICATI ON U/S.154 FOR INTEREST, HENCE REQUEST OF THE ASSESSEE WAS REJECTE D. IT WAS ALSO CLARIFIED THAT SEC.214 RELATES TO THE INTEREST ON E XCESS ADVANCE TAX AND, THEREFORE, NO INTEREST WAS DUE AND THEREFORE REQUES T OF THE ASSESSEE WAS REJECTED. 3. AGGRIEVED BY THE ABOVE LETTER ASSESSEE FILED AN APPEAL BEFORE THE CIT(A). SUCH APPEAL WAS LATE BY ABOUT FOUR MON THS AND THE LD. ITA NO.3040 OF 2010 3 CIT(A) REFUSED TO CONDONE THE DELAY. ON THE ISSUE O F INTEREST, LD. CIT(A) DECLINED THE CLAIM VIDE PARAS 5 & 6 WHICH AR E AS UNDER: 5. I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELL ANT AND SINCE IN THIS CASE IT IS CLEAR THAT THE APPELLANT DID NOT FILE AN Y APPLICATION U/S 154 OF THE I.T. ACT WITHIN THE TIME AVAILABLE TO HIM AS ST ATED BY THE AC IN THE REJECTION LETTER DT. 5/3/2009 AND FURTHERMORE NO AP PEAL SEEMS TO HAVE BEEN FILED AGAINST THE ORDER U/S 143(3) OF I.T. ACT DT. 20/3/1991 AND ONLY NOW THE APPELLANT HAS FILED THIS APPEAL AGAINST THE REJECTION LETTER OF THE AO DT. 5/3/2009 FOR ITS CLAIM OF INTEREST ON REFUND THE APPEAL FILED BY THE APPELLANT NOW ON 12/8/2009 SEEMS TO BE NOT ONLY MIS CONCEIVED AS IT IS AGAINST THE LETTER OF REJECTION OF THE AC DT. 5/3/2 009 WHICH IN MY OPINION CANNOT FORM THE SUBJECT MATTER OF AN APPEAL U/S 246 A BECAUSE IT IS NEITHER AGAINST THE ORDER U/S 143(3) OF I.T. ACT DT . 20/3/1991 IN APPELLANTS CASE NOR IS IT AGAINST ANY ORDER U/S 15 4 PASSED BY THE AC WITHIN THE PERMITTED TIME IT IS ONLY AN ATTEMPT T O FILE AN APPEAL AGAINST A LETTER WRITTEN BY THE APPELLANT TO THE AC ON 2/7/ 2008 AND REJECTED BY THE AC ON 5/3/2009. THIS ACTION OF THE AC ON 5/3/20 09 REJECTING THE APPLICATION OF THE APPELLANT CANNOT CONSTITUTE THE SUBJECT MATTER OF AN APPEAL U/S 246A OF LT. ACT AND IS THEREFORE REJECTE D AS NOT BEING PROPER. 6. IN THE RESULT, SINCE I HAVE HELD THAT THE LETTER OF REJECTION BY THE AC DT. 5/3/2009 NOT BEING ONE U/S 154 AND NOT RELATING TO ANY ORDER AS ENVISAGED U/S 246A OF I.T. ACT CANNOT BE THE SUBJEC T MATTER OF AN APPEAL U/S 246A THE SAME IS HEREBY REJECTED AND ALSO SINCE IT IS NOT COVERED BY ANY OF THE APPELLABLE PROVISIONS U/S 246A, THE FURT HER REQUEST OF THE APPELLANT FOR CONDONATION OF DELAY U/S 249(3) AS A CONSEQUENCE STANDS REJECTED. 4. BEFORE US, LD. COUNSEL FOR THE ASSESSEE MAINLY C ONTENDED THAT CIT(A) HAS NOT GIVEN PROPER REASONS FOR NOT CONDONI NG THE DELAY. IT HAS BEEN FURTHER ARGUED THAT EVEN THE LETTER OF THE AO WOULD CONSTITUTE AN ORDER AND IN THIS REGARD RELIANCE HAS BEEN PLACED ON THE FOLLOWING DECISIONS- I) SECOND. ITO V. K. M ABRAHAM (33 LTD 538) (TMUM) II) INDIAN ALUMINIUM CO LTD V COMMISSIONER OF C. EX. (APPEALS), COCHIN (200 ELT 428)(TBANG) III) CIT V S C SHAH (11 TAXMAN 66)(BOM) ITA NO.3040 OF 2010 4 IT WAS FURTHER ARGUED THAT MERELY BECAUSE ASSESSEE DID NOT FILE ANY EXPRESS CLAIM, THE DEPARTMENT WAS STILL BOUND TO GI VE INTEREST AND IN THIS REGARD RELIANCE WAS PLACED ON THE DECISION OF THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF CHOKSHI METAL REFINERY VS .CIT [107 ITR 63] AND BOARDS CIRCULAR NO.14[LX-35] OF 55 DATED 11-4- 1955 IN THIS CASE. 5. THE LD. COUNSEL FURTHER ARGUED THAT IT HAS BEEN OBSERVED BY THE HON'BLE SUPREME COURT IN THE CASE OF SANDVIK ASSIA LTD. VS. CIT [280 ITR 643] THAT INTEREST IS OF COMPENSATORY NATURE TH EREFORE GOVERNMENT MUST COMPENSATE THE ASSESSEE IF THE AMOUNT OF REFUN D HAS BEEN WRONGFULLY WITHHELD BY THE GOVERNMENT. THEREFORE, T RIBUNAL SHOULD ISSUE SUITABLE DIRECTIONS FOR THE GRANT OF INTEREST . IT WAS FURTHER SUBMITTED THAT INTEREST ON EXCESS TDS IS ALSO PAYAB LE BY THE G0VERMENT IN THE ABSENCE OF ANY PROVISIONS OF THE A CT AND IN THIS REGARD RELIANCE WAS PLACED ON THE DECISION OF THE H ON'BLE GUJARAT HIGH COURT IN THE CASE OF GUJARAT FLOUROCHEMICALS LTD. V S. CIT [300 ITR 328]. 6. ON THE OTHER HAND, LD. DR SUBMITTED THAT ASSESSE E HAS NOT FILED ANY RECTIFICATION APPLICATION BEFORE THE AO AND HAD ONLY FILED A LETTER MAKING A REQUEST FOR GRANT OF INTEREST WHICH CANNOT BE CONSTRUED AS RECTIFICATION APPLICATION. THEREFORE THE LETTER WRI TTEN BY THE AO IN RESPONSE TO THE LETTER OF THE ASSESSEE CANNOT BE CO NSTRUED AS AN ORDER U/S.154 AND ACCORDINGLY CIT(A) HAS RIGHTLY REFUSED TO ADMIT THE APPEAL. SHE ALSO CONTENDED THAT ONCE APPEAL WAS NOT ADMITAB LE, THEN THERE IS NO QUESTION OF CONDONATION OF DELAY. ITA NO.3040 OF 2010 5 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFUL LY. ADMITTEDLY, ASSESSEE HAS NEVER FILED ANY APPLICATION AFTER THE RECEIPT OF REFUND. ASSESSEE WOKE UP AFTER A GAP OF ALMOST 16 YEARS AND WROTE A LETTER TO THE AO MAKING A REQUEST FOR GRANT OF INTEREST. THE AO SIMPLY RESPONDED TO THAT LETTER, BUT THEN SUCH LETTER CANN OT BE CONSTRUED AS A RECTIFICATION APPLICATION U/S.154. ASSUMING FOR THE ARGUMENT SAKE THAT LETTER WRITTEN BY THE ASSESSEE SHOULD BE CONSTRUED AS AN APPLICATION U/S.154 FOR RECTIFICATION, IN THAT CASE, SUCH APPLI CATION IS REQUIRED TO BE FILED WITHIN THE FOUR YEARS FROM THE DATE OF THE AS SESSMENT ORDER AND THERE IS NO PROVISION FOR LATE FILING OF SUCH AN AP PLICATION U/S.154. WHEREVER LEGISLATURE HAS INTENDED THAT EVEN AN APPL ICATION/APPEAL FILED BELATEDLY SHOULD BE ACCEPTED BY THE HIGHER AU THORITY, THEN A SUITABLE PROVISION HAS BEEN MADE. FOR EXAMPLE, AN A PPEAL CAN BE FILED BELATEDLY BEFORE THE CIT(A) AND THERE IS A PROVISIO N UNDER SUB-SEC.[3] OF SEC.249 WHICH GIVES POWER FOR CONDONATION OF DEL AY. SIMILARLY, IF THE APPEAL IS FILED BELATEDLY BEFORE THE TRIBUNAL THEN SUB-SEC.[5] OF SEC.253 GIVES POWER FOR CONDONATION OF DELAY. THEREFORE, TH ERE BEING NO PROVISION FOR CONDONATION OF DELAY, THIS LETTER OF THE ASSESSEE WHICH EVEN IF ASSUMED TO BE THE RECTIFICATION APPLICATION , COULD NOT HAVE BEEN ENTERTAINED BY THE AO. IN THIS CASE ASSESSMENT U/S. 143[3] WAS PASSED ON MARCH 30, 1991 AND REFUND WAS ISSUED ON APRIL 15 , 1991. THEREFORE, CAUSE OF ACTION AROSE SOMEWHERE IN 1991. SO EVEN IF THE LETTER WRITTEN BY THE ASSESSEE IS CONSTRUED AS RECT IFICATION APPLICATION, SAME WAS REQUIRED TO BE FURNISHED WITHIN FOUR YEARS I.E. IN 1995. WHEREAS THE LETTER HAS BEEN WRITTEN REQUESTING FOR INTEREST FOR THE FIRST ITA NO.3040 OF 2010 6 TIME IN THE YEAR 2007 I.E. ALMOST AFTER 16 YEARS. A S OBSERVED EARLIER, THERE IS NO PROVISION FOR CONDONATION OF DELAY IN S EC.154, THEREFORE, THIS APPLICATION COULD NOT HAVE BEEN ENTERTAINED BY THE AO. ACCORDINGLY, WE CONFIRM THE ACTION OF THE AO IN REF USING TO ENTERTAIN THE REQUEST FOR GRANT OF INTEREST. 8. WE MAY FURTHER OBSERVE THAT IT IS SETTLED POSITI ON OF LAW THAT APPEAL IS NOT AN INHERITED RIGHT BUT IT IS ONLY A S TATUTORY RIGHT. REFERENCE MAY BE MADE TO THE FOLLOWING CASE LAW: A) SMT.GANGABAI VS.VIJAY KUMAR AIR 1974 S.C. 1126, 112 9 B) DARSHAN SINGH V. RAM PAL SINGH (1992) SUPP (1) SCC 191, 212 (S.C.) C) CIT VS. SYED JAFFER & SONS (1992) 194 ITR 645, 649 (S.C) 9. THEREFORE, A MERE REPLY TO THE REQUEST OF THE AS SESSEE TO A LETTER CANNOT BECOME AN APPEALABLE ORDER WHICH CAN BE APPEALED. THEREFORE, IN OUR OPINION, LD. CIT(A) RIGHTLY REFUS ED TO ADMIT THE APPEAL AND ONCE APPEAL IS NOT ADMISSIBLE, THE QUESTION OF CONDONATION OF DELAY BECOMES INFRUCTUOUS. 10. IN THE RESULT, ASSESSEES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 2 9/2/2012. SD/- SD/- (R.S.PADVEKAR) (T.R.SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI: 29/2/2012. P/-*