ACIT, New Delhi V. M/s. Ramnath Exports Pvt. Ltd, New Delhi

ITA 3118/DEL/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 3926 (ITAT-DELHI)
• Duration Of Justice: 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-05-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 05-05-2010
• Assessment Year: 1990-1991
• Appeal Filed On: 07-07-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: H K LAL
• Keywords: TDS
• Section: 143(3); 244A; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH-F, NEW DELHI BEFORE SHRI RAJ PAL YADAV, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A.NO.3118/DEL/2009 ASSESSMENT YEAR 1990-91 ASSTT. COMMISSIONER OF INCOME-TAX, VS. M/S RAMNATH EXPORTS PVT. LTD., CIRCLE-15(1), 4, ARBINDO MARG, MEHRAULI, I.P. ESTATE, NEW DELHI-110030. NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI H.K. LAL, SR. D.R. RESPONDENT BY : SHRI SATISH KUMAR GOEL, ADVOCATE O R D E R PER SHAMIM YAHYA, AM: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST ORDE R OF THE CIT(A)- XVIII, NEW DELHI DATED 31.3.2009 AND PERTAINS TO AS SESSMENT YEAR 1990- 91. 2. GROUNDS RAISED READ AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AS WELL IN LAW THE LD. CIT(A) HAS ERRED IN DIRECTING T O ALLOW INTEREST U/S 244(A) ON REFUND AMOUNT OF RS.14,65,70 1/- WITHOUT PROPER APPRECIATION OF THE FACTS OF THE CAS E WITH REFERENCE TO RELEVANT LEGAL PROVISIONS. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AS WELL IN LAW THE LD. CIT(A) HAS ERRED IN DIRECTING T O ALLOW INTEREST U/S 244(A) ON REFUND AMOUNT OF RS.14,65,70 1/- IGNORING THE FACT THAT DELAY IS ATTRIBUTABLE SOLELY AND EXCLUSIVELY TO THE ASSESSEE ITSELF. 3. THE FACTS OF THE CASE, IN BRIEF, ARE THAT THE AS SESSEE FILED APPEAL AGAINST THE ORDER PASSED BY THE ASSESSING OFFICER A FTER GIVING EFFECT TO THE ITA NO.3118/DEL/09 2 ORDER OF CIT(A) AND THE ORDER OF ITAT U/S 250/254 A ND FURTHER PASSING AN ORDER U/S 154 SHOWING THE TAXABLE INCOME OF RS.47,8 6,710/-, INCOME-TAX REFUND OF RS.15,44,761 AND INTEREST U/S 244A OF RS. 1,05,070/- TOTALING RS.16,49,831/-. ON PASSING THE ORDER U/S 154 OF TH E INCOME-TAX ACT, THE ASSESSING OFFICER ALLOWED INTEREST U/S 244A ON THE BALANCE REFUND OF INCOME TAX OF RS.14,65,701/-. ASSESSEE SUBMITTED B EFORE THE CIT(A) THAT IT FILED RETURN ON 31.12.1990 SHOWING TAXABLE INCO ME OF RS.72,53,870/- AND PAID ADVANCE TAX AND TDS OF RS.43,13,103/-, WHI CH WAS PROCESSED UNDER SECTION 143(1)(A) ON 26.03.1991 BUT LATER ON THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) ON THE TAXABLE INCOM E OF RS.73,83,440/-. THE ASSESSEE FILED APPEAL BEFORE THE CIT(A) AGAINST THE ORDER OF THE ASSESSING OFFICER. THE CIT(A) ALLOWED CERTAIN RELIE F TO THE ASSESSEE, BUT AGGRIEVED WITH THE ORDER OF THE CIT(A), THE ASSESSE E FURTHER FILED THE APPEAL BEFORE THE ITAT, NEW DELHI. THE ITAT ALLOWE D SOME RELIEF INCLUDING RELIEF OF ADDITIONAL GROUND OF RS.24,88,8 84/-. WHILE GIVING EFFECT TO THE ORDER OF THE ITAT, THE ASSESSING OFFICER HAS NOT ALLOWED THE RELIEF OF ADDITIONAL GROUND OF RS.24,88,884/-, WHICH WAS LATE R RECTIFIED BY THE ASSESSING OFFICER U/S 154 AND ISSUED THE REFUND OF RS.16,49,831/- ALLOWING INTEREST U/S 244A ON THE REFUND OF RS.79,060/-, BUT NOT ALLOWED INTEREST ON REFUND OF RS.14,65,701/- WITHOUT GIVING ANY REASON FOR WHICH THE ASSESSEE IS ENTITLED. HENCE THE ASSESSEE FILED APPEAL BEFOR E THE CIT(A). ITA NO.3118/DEL/09 3 4. CONSIDERING THE ABOVE SEQUENCE OF EVENTS, THE CI T(A) DIRECTED THE ASSESSING OFFICER TO ALLOW INTEREST U/S 244A. AGAI NST THIS ORDER, THE REVENUE IS IN APPEAL BEFORE US. 5. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT IN PURSUANCE OF GIVING EFFECT TO ITATS ORDER DATED 15.7.2005, WHIC H WAS LATER RECTIFIED ON 7.6.2006, ASSESSEE HAS BEEN GRANTED RELIEF OF RS.15 ,44,761/-DETAILS WHEREOF, AS SUBMITTED BY THE LD. COUNSEL FOR THE AS SESSEE, ARE AS UNDER:- 14,65,701 OUT OF TDS AND ADVANCE TAX PAID BUT INT EREST U/S 244(A) WAS NOT ALLOWED. 79,060 ADJUSTED ON 29.3.1993 BUT INTEREST OF RS .1,05,070 WAS ------------- ALLOWED U/S 244(A) 15,44,761 ------------- HENCE, THE LD. COUNSEL FOR THE ASSESSEE CLAIMED THA T CLEARLY THE ASSESSING OFFICER HAD NOT GRANTED INTEREST U/ 244(A ) ON THE SUM OF RS.14,65,701/- WHICH WAS OUT OF ADVANCE TAX AND TDS . 6. THE LD. D.R., ON THE OTHER HAND, SUBMITTED THAT EXPLANATION 2 TO SECTION 244A WAS APPLICABLE IN THIS CASE WHEREIN IT HAS BEEN SPECIFIED AS UNDER:- EXP.(2) IF THE PROCEEDINGS RESULTING IN THE REFUN D ARE DELAYED FOR REASONS ATTRIBUTABLE TO THE ASSESSEE, WHETHER WHOLL Y OR IN PART, THE PERIOD OF THE DELAY SO ATTRIBUTABLE TO HIM SHALL BE EXCLUDED FROM THE PERIOD FOR WHICH INTEREST IS PAYABLE, AND WHERE ANY QUESTION ARISES AS TO THE PERIOD TO BE EXCLUDED, IT SHALL BE DECIDE D BY THE CHIEF COMMISSIONER OR COMMISSIONER WHOSE DECISION THEREON SHALL BE FINAL. ITA NO.3118/DEL/09 4 HE CLAIMED THAT THE REFUND HAS ARISEN TO THE ASSESS EE AS THE FINALLY ASSESSED INCOME PURSUANT TO TRIBUNALS ORDER HAD BE COME EVEN LOWER THAN THE INCOME ORIGINALLY RETURNED BY THE ASSESSEE . HENCE, HE CLAIMED THAT CLEARLY THE DELAY WAS DUE TO ASSESSEES OWN FA ULT AND HENCE INTEREST CANNOT BE PAID BY VIRTUE OF EXPLANATION 2 TO SECTIO N 244A. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ECORDS. AS PER ADMITTED FACTS OF THE CASE, ASSESSEE HAS BEEN GRANT ED REFUND IN PURSUANCE TO GIVING EFFECT TO THE ORDER OF THE ITAT . OUT OF A SUM OF RS.14,65,701/-, WHICH HAS BEEN CLAIMED TO BE OUT OF ADVANCE TAX AND TDS, INTEREST U/S 244A HAS NOT BEEN GRANTED BY THE ASSESSING OFFICER. REVENUES PLEA IN THIS REGARD IS THAT THE SAME IS D UE TO THE FAULT OF THE ASSESSEE AND HENCE EXPLANATION 2 TO SECTION 244A WI LL COME INTO PLAY. NOW THE SAID EXPLANATION MANDATES THAT NO INTEREST U/S 244A WILL BE PAYABLE IF THE PROCEEDINGS RESULTING IN REFUND ARE DELAYED FOR REASONS ATTRIBUTABLE TO THE ASSESSEE. NOW, THE REASON CITE D BY THE LD. COUNSEL IS THAT THE TRIBUNAL HAS GRANTED EXTRA CONCESSION TO T HE ASSESSEE BY VIRTUE OF WHICH THE INCOME RETURNED, WHICH WAS ORIGINALLY RS. 72,53,870/-, HAS NOW BECOME RS.47,86,710/-. HENCE, IT IS CLAIMED THAT I T IS ON ACCOUNT OF FAULT ATTRIBUTABLE TO THE ASSESSEE. 8. IN OUR CONSIDERED OPINION, THE ABOVE CANNOT BE T AKEN TO BE FALLING UNDER THE REALM OF EXPLANATION 2 TO SECTION 244A. IF THE ASSESSEE HAS FILED A RETURN OF INCOME, IT IS INCUMBENT UPON THE ASSESS ING OFFICER TO ASSESS ITA NO.3118/DEL/09 5 THE SAME AS PER LAW. IN THIS REGARD IT WILL BE WOR THWHILE TO REFER TO CBDT CIRCULAR NO.14(XL-35) OF 1955 DATED 11.4.1955 WHICH STATES THAT OFFICERS OF THE DEPARTMENT MUST NOT TAKE ADVANTAGE OF THE IGNOR ANCE OF THE ASSESSEE AS TO HIS RIGHTS. ARTICLE 265 OF THE CONSTITUTION OF INDIA MANDATES THAT NO TAX CAN BE COLLECTED EXCEPT BY AUTHORITY OF LAW. HO NBLE APEX COURT IN THE CASE OF CIT V. V. MR. P. FIRM, MUAR, (1965) 56 ITR 67 (SC), HAS EXPOUNDED THAT IF A PARTICULAR INCOME IS NOT TAXABL E UNDER THE INCOME-TAX ACT, THEN IT CANNOT BE TAXED ON THE BASIS OF ESTOPP EL OR ANY OTHER EQUITABLE DOCTRINE. HENCE, WHEN THE DEPARTMENT IS IN POSSESSI ON OF TAX AMOUNT PAID WHICH IS MORE THAN DUE LAWFULLY ON THE INCOME AFTER DUE ASSESSMENT PROCEDURE, INTEREST U/S 244A HAS TO BE PAID. 9. IN THE BACKGROUND OF ABOVE DISCUSSION, WE FIND T HAT ASSESSEE HAS BECOME ENTITLED TO REFUND OF RS.14,65,701/- WHICH I S ADMITTEDLY OUT OF ADVANCE-TAX AND TDS PAID AND HENCE AS PER THE MANDA TE OF SECTION 244A, ASSESSEE IS ENTITLED TO INTEREST U/S 244A ON THIS AMOUNT. WE DO NOT FIND ANY INFIRMITY OR ILLEGALITY IN THE ORDER OF LD. CIT (A). ACCORDINGLY, WE UPHOLD THE SAME. 10. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 14.5.2010. SD/- SD/- ( RAJ PAL YADAV ) ( SHAMIM YAHYA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 14 5.2010. VSK ITA NO.3118/DEL/09 6 COPY TO:- 1. APPELLANT-REVENUE 2. RESPONDENT-ASSESSEE 3. CIT 4. CIT(A) 5. DR, ITAT, NEW DELHI. DEPUTY REGISTRAR