Niya Finstock Pvt. Ltd., Ahmedabad V. The ACIT.,Circle-5, Ahmedabad

ITA 3049/AHD/2013

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 6154 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 3 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-04-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 29-03-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 23-12-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DEEPAK SUTARIA
• Assessee Lawyers: H C SHAH
• Section: 244A; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH BEFORE: SHR I S. S. GODARA , JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER NIYA FINSTOCK PVT. LTD. NIRMA HOUSE, ASHRAM ROAD, AHMEDABAD PAN: AAACN5205D (APPELLANT) VS THE ACIT, CIRCLE - 5, AHMEDABAD (RESPONDENT) REVENUE BY : S H RI DEEPAK SUTARIA , SR. D . R. ASSESSEE BY: S H RI H.C. SHAH , A.R. DATE OF HEARING : 27 - 03 - 2 017 DATE OF PRONOUNCEMENT : 19 - 04 - 2 017 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - THIS ASSESSEE S APPEAL FOR A.Y. 2006 - 07 , AR I SES FROM ORDER OF THE CIT(A) - XI, AHMEDABAD DATED 11 - 11 - 2013 IN APPEAL NO. CIT(A) - XI/140 / ACIT.CIR - 5/12 - 13 , IN PROCEEDINGS UNDER SECT ION 154 OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . I T A NO . 3049 / A HD/20 13 A SSESSME NT YEAR 200 6 - 07 I.T.A NO. 3049 /AHD/20 13 A.Y. 2006 - 07 PAGE NO NI YA FINSTOCK PVT. LTD. VS. ACIT 2 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: - 1) IN LAW AND IN FACTS AND CIRCUMSTANCES OF THE APPELLANT'S CASE, THE LEARNED CIT(A) HAS GROSSLY ERRED IN POINTS OF LAW AND FACTS. 2) IN LAW AND IN FACTS AND CIRCUMSTANCES OF THE APPELLANT'S CASE, THE LEARNED CIT(A) HAS GROSSLY ERRED IN REJECTIN G APPELLANT'S CONTENTION THAT COMPENSATION RS.48,000 SHOULD BE GIVEN FOR ISSUING DELAYED REFUND. 3. BRIEF FACTS OF THE CASE ON THE ISSUE IN GROUND OF APPEAL IS THAT THE ASSESSING OFFICER HAD GRANTED REFUND ON THE APPLICATION OF THE ASSESSEE VIDE ORDE R U/S. 154 OF THE ACT MADE ON 06 - 07 - 2012. THE ASSESSEE FILED APPEAL BEFORE THE LD. CIT(A) THAT THE ASSESSING OFFICER HAD NOT GRANTED ADDITIONAL COMPENSATION OF RS. 47 , 873/ - ON THE INTEREST AMOUNT OF RS. 1 , 95 , 402/ - GRANTED U/S. 244 A OF THE ACT. THE ASSESS EE HAS CONTENDED THAT INTEREST U/S. 244A OF THE ACT OF RS. 1 , 95 , 402/ - WHICH WA S RECEIVABLE ON JULY, 2008 BUT WAS RECEIVED ON AUG, 2012. THE LD. CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE BY STATING THAT DECISION OF THE HON BLE APEX COURT IN THE CASE OF SANDVIK ASIA 280 ITR 643 HAD BEEN OVERRULED BY THE DECISION OF THE APEX COURT IN THE CASE OF CIT VS. GUJARAT FLOURO CHEMICALS. THE FINDINGS OF THE LD. CIT(A) IS REPRODUCED AS UNDER: - 3.1 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE. APPELLANT HA S RELIED ON VARIOUS DECISIONS IN WHICH INTEREST ON DELAY IN PAYMENT OF INTEREST U/S.244A HAVE BEEN ALLOWED TO THE ASSESSEE. APPELLANT HAS ALSO INVITED ATTENTION TO THE ORDERS OF MY PREDECESSOR LD. CIT(A) IN THE CASE OF NIRMA LTD. IN WHICH THE A.O. HAS BEEN DIRECTED TO GRANT INTEREST. THESE DIRECTIONS WERE MAINLY GIVEN IN VIEW OF DECISION OF HON'BLE SUPREME COURT IN THE CASE OF SANDVIK ASIA 280 ITR 643. THE HON'BLE SUPREME COURT HAS RECENTLY DELIVERED A CONTRARY DECISION IN THE CASE OF CIT VS GUJARAT FLOURO CHEMICALS IN SLP (CIVIL) NO. 11406/2008. THE SUPREME COURT HAS HELD THAT IN THE I.T.A NO. 3049 /AHD/20 13 A.Y. 2006 - 07 PAGE NO NI YA FINSTOCK PVT. LTD. VS. ACIT 3 SANDVIK ASIA CASE THE INTEREST PAYMENT WAS WRONGLY WITHHELD FOR A LONG PERIOD OF 17 YEARS. THEREFORE, THE INTEREST FOR DELAY IN PAYMENT OF THE AMOUNT LAWFULLY DUE TO ASSESSEE W AS ORDERED. NOW IN THE ABOVE DECISION THE HON'BLE SUPREME COURT HAS OBSERVED THAT SECTION 214 OF THE I.T. ACT DOES NOT PROVIDE FOR PAYMENT OF COMPENSATION BY THE REVENUE TO THE ASSESSEE IN WHOSE FAVOUR REFUND ORDER HAS BEEN PASSED. IT WAS FURTHER OBSERVED BY THE HON'BLE SUPREME COURT THAT IN SANDVIK ASIA CASE INTEREST WAS ORDERED ON THE BASIS OF EQUITY AND ALSO ON THE BASIS OF ARTICLE 265 OF CONSTITUTION. HON'BLE SUPREME COURT HAS FURTHER HELD AS UNDER : - 'WE HAVE SERIOUS DOUBTS ABOUT THE CORRECTNESS OF THE JUDGEMENT IN SANDVIK ASIA [SUPRA]. IN OUR VIEW, THE JUDGMENT OF THIS COURT IN THE CASE OF MODI INDUSTRIES LIMITED VS. COMMISSIONER OF INCOME TAX, 1995 (6) S.C.C. 396 CORRECTLY HOLDS THAT ADVANCE TAX OR TDS LOSES ITS IDENTITY AS SOON AS IT IS ADJUSTED AGAI NST THE LIABILITY CREATED BY THE ASSESSMENT ORDER AN D BECOMES TAX PAID PURSUANT TO THE ASSESSMENT ORDER. IF ADVANCE TAX OR TDS LOSES ITS IDENTITY AND BECOMES TAX PAID ON THE PASSING OF THE ASSESSMENT ORDER, THEN, IS THE ASSESSEE NOT ENTITLED TO INTEREST UN DER THE RELEVANT PROVISIONS OF THE ACT?' IT WAS ALSO HELD - 'WE SAY NO MORE. WITH RESPECT, WE ARE OF THE VIEW THAT SANDVIK ASIA (SUPRA) HAS NOT BEEN CORRECTLY DECIDED. IN THE CIRCUMSTANCES, WE DIRECT THE REGISTRY TO PLACE THIS MATTER BEFORE HON'BLE THE CHIEF JUSTICE ON THE ADMINISTRATIVE SIDE FO R APPROPRIATE ORDERS. THE REGISTRY IS ALSO DIRECTED TO PLACE SIMILAR MATTERS, WHICH ARE PENDING IN THIS COURT, ALONG WITH THIS PETITION.' 3.2 IN VIEW OF THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF GUJARAT FLOURO CHEMICALS (SUPRA), I AM OF THE OPINION THAT THE DELAY IN GRANT OF INTEREST U/S.244A WAS NOT INORDINATE AND CANNOT BE SAID TO HAVE CAUSED IRREPARABLE DAMAGE TO THE APPELLANT. THIS IS NOT A CASE WHERE THE INTEREST WAS WRONGLY HELD BY THE REVENUE FOR AN INORDINATE PERIOD. IN VIEW OF THE ABOVE DISCUSSION, I AM OF THE OPINION THAT THE GROUND OF APPEAL RAISED BY THE APPELLANT AGAINST NON - GRANTING OF INTEREST ON INTEREST RECEIVABLE U/S.244A DESERVES TO BE DISMISSED. I.T.A NO. 3049 /AHD/20 13 A.Y. 2006 - 07 PAGE NO NI YA FINSTOCK PVT. LTD. VS. ACIT 4 4 . WE HAVE HEARD THE RIVAL CONTENTIONS. AFTER CONSIDERING THE DECISION OF THE HON BLE SUPREME COURT IN THE CASE OF GUJARAT FLOURO CHEMICALS AS ELABORATED IN THE FINDINGS OF THE LD. CIT(A) WE FIND THAT LD.CIT(A) WAS JUSTIFIED IN HIS DECISION AS IN THE ABOVE CASE THE HON BLE S UPREME COURT HAS DECIDED THAT SECTION 214 OF THE ACT DOES NOT PROVIDE FOR PAYMENT OF COMPENSATION BY THE REVENUE , THEREFORE WE DO NOT FIND ANY REASON TO INTERFERE IN THE FINDINGS OF THE LD. CIT(A). 5 . AS A RESULT, THE APPEAL OF THE ASSESSEEE IS DISMISS ED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 19 - 04 - 201 7 SD/ - SD/ - ( S.S. GODARA ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 19 /04 /2017 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,