DCIT - CC- 4(1)- MUMBAI CR-4 PR. CIT- (C)-2, MUMBAI V. ASHWIN S. MEHTA, MUMBAI

ITA 3118/MUM/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 8480 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-07-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 1992-1993
• Appeal Filed On: 11-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR P DANIEL LD
• Assessee Lawyers: VIJAY MEHTALD
• Keywords: Rectification of order; Set aside
• Section: 143(3); 234B; 154

Judgement Text

1 ITA NO.3118/MUM/2018 SHRI ASHWIN S. MEHTA ASSESSMENT YEAR-1992-93 IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI , , BEFORE HONBLE SHRI SANDEEP GOSAIN, JM AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM ./ I.T.A. NO.3118/MUM/2018 ( / ASSESSMENT YEAR: 1992-93) DCIT- CENTRAL CIRCLE-4(1) ROOM NO.1916, 19 TH FLOOR AIR INDIA BUILDING, NARIMAN POINT MUMBAI-400 021. / VS. SHRI ASHWIN S. MEHTA 32, MADHULI D.A.B. ROAD, WORLI MUMBAI-400 026. ./ ./PAN/GIR NO. ABAPM 2121 M ( /APPELLANT ) : ( ! / RESPONDENT ) REVENUE BY : DR. P. DANIEL-ADVOCATE, LD. DR ASSESSEE BY : SHRI VIJAY MEHTA- LD. AR #$ % / DATE OF HEARING : 09/07/2019 #$ % / DATE OF PRONOUNCEMENT : 16/07/2019 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER): - 1. AFORESAID APPEAL BY THE REVENUE FOR ASSESSMENT YEAR [IN SHORT REFERRED TO AS AY] 1992-93 CONTEST THE ORDER OF L D. COMMISSIONER OF 2 ITA NO.3118/MUM/2018 SHRI ASHWIN S. MEHTA ASSESSMENT YEAR-1992-93 INCOME-TAX (APPEALS)-52, MUMBAI, [IN SHORT REFERRED TO AS CIT(A)], APPEAL NO. CIT(A)-52/IT-455/DCIT-4(1)/16-17 DATED 02/02/2018 ON FOLLOWING GROUNDS OF APPEAL:- 1. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) ERRED IN LAW IN RESTRICTING THE MEANING OF REGULAR ASSESSMEN T WITHOUT APPRECIATING THE FACT THAT ASSESSMENT ORDER DATED 28.03.2016 WAS PASSED U/S 14 3(3) RWS 254 OF THE ACT.' 2. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) ERRED IN HOLDING THAT INTEREST U/S 234A & 234B IS TO BE C OMPUTED TILL THE DATE OF ORIGINAL ASSESSMENT AND NOT TILL THE DATE OF FRESH ASSESSMEN T WITHOUT APPRECIATING THAT PROVISIONS OF SECTION 234A & 234B PROVIDES INTEREST COMPUTATION TILL THE DATE OF REGULAR ASSESSMENT U/S 143(3) UNDER WHICH THE FRESH ASSESSM ENT ORDER WAS PASSED.' 3. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) ERRED IN HOLDING THAT INTEREST U/S 220(2) IS TO BE COMPUTED FROM THE DATE OF FRESH ASSESSMENT ORDER WITHOUT APPRECIATING THE FACT THAT THE ISSUES OF ADDITION MADE IN ORIGINAL ASSESSMENT ORDER AND FRESH ASSESSMENT ORDER ARE SAM E, HENCE, ASSESSEE WAS IN DEFAULT FROM THE DATE OF ORIGINAL ASSESSMENT ORDER AND NO NEW MATERIAL EVIDENCE HAS BEEN FURNISHED BY ASSESSEE IN FRESH ASSESSMENT PROC EEDINGS SO AS TO CHALLENGE ITS DEFAULT.' 4. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) ERRED IN HOLDING THAT FOR INTEREST U/S 220(2) THE DATE OF FRESH ASSESSMENT ORDER IS TO BE CONSIDERED, HOWEVER, FOR INTEREST U/S 234A & 234B, THE FRESH ASSESSMENT WOULD NOT BE CONSIDERED AS REGULAR ASSESSMENT, THEREBY, BRINGING COMPLETE ANOMALY AND ARBITRARINESS IN ITS ORDER.' THE APPELLANT, THEREFORE, PRAYS THAT ON THE GROUNDS STATED ABOVE, THE ORDER OF THE CIT{A)-52, MUMBAI, MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER RESTORED. 2. THE LD. AUTHORIZED REPRESENTATIVE FOR ASSESSEE [ AR], SHRI VIJAY MEHTA, AT THE OUTSET, SUBMITTED THAT THE ISSUES ARE SQUARELY COVERED BY THE RECENT DECISION OF TRIBUNAL RENDERED IN BUNCH OF AP PEALS ON 14/01/2019. THE ISSUES IN THE PRESENT APPEAL ARE STATED TO BE H AVE BEEN COVERED BY CROSS-APPEALS ITA NOS.3427 & 3386/MUM/2017 FOR AY 1 992-93 IN ASSESSEES OWN CASE. THE RELEVANT PAGES OF THE ORDE R HAVE BEEN PLACED ON RECORD. THE LD. COUNSEL FOR REVENUE, ON THE OTHER H AND, PLEADED THAT THE REVENUE COULD NOT BE DEPRIVED-OFF OF INTEREST DURIN G INTERREGNUM PERIOD. 3 ITA NO.3118/MUM/2018 SHRI ASHWIN S. MEHTA ASSESSMENT YEAR-1992-93 3.1 IN THE ABOVE BACKGROUND, WE FIND THAT THE DISPU TE OF THE PRESENT APPEAL STEM FROM RECTIFICATION ORDER PASSED BY LD. ASSESSING OFFICER U/S 154 ON 06/09/2016 PURSUANT TO RECTIFICATION APPLICA TION FILED BY THE ASSESSEE AGAINST THE ORDER DATED 28/03/2016 PASSED BY LD. AO U/S 143(3) R.W.S. 254 OF THE ACT DETERMINING THE INCOME AT RS. 1884.71 CRORES. TWO ISSUE ARISES UNDER THE APPEAL. IT IS WORTH MENTIONI NG THAT THE ASSESSEE IS A NOTIFIED ENTITY UNDER THE PROVISIONS OF THE SPECIAL COURT ACT. 3.2 THE FIRST ISSUE PERTAINS TO CHARGING OF INTERES T U/S 220(2). AS PER ASSESSEES SUBMISSIONS, THE INTEREST WAS TO BE CHAR GED AFTER EXPIRY OF 35 DAYS FROM THE ISSUE OF FRESH ASSESSMENT ORDER PASSE D PURSUANT TO THE DIRECTIONS OF THE TRIBUNAL IN SET ASIDE PROCEEDINGS AND NOT FROM THE DATE OF ISSUE OF ORIGINAL ASSESSMENT ORDER DATED 27/03/1995 . THE COMPUTATIONS MAKE A DIFFERENCE OF RS.1536 CRORES. HOWEVER, LD. A O DISREGARDED THE SAME SINCE IT WAS NOT A MISTAKE APPARENT FROM RECORD AND THEREFORE, COULD NOT BE A SUBJECT MATTER OF RECTIFICATION U/S 154. W ITHOUT PREJUDICE, THE SUBMISSIONS WERE REJECTED BY LD. AO RELYING UPON CB DT CIRCULAR NO. 334 DATED 03/04/1982 AND DRAWING ANALOGY FROM SECTION 2 40 OF THE ACT. 3.3 THE SECOND ISSUE PERTAINS TO CHARGEABILITY OF I NTEREST UNDER SEC. 234A, 234B & 234C.THE ASSESSEE, WHILE CONTESTING CH ARGING OF INTEREST U/S 220(2) FROM THE DATE OF ORIGINAL ORDER, SUBMITTED T HAT INTEREST U/S 234A & 234B WAS NOT TO BE CHARGED UP-TO THE DATE OF PRESEN T ORDER BUT ONLY UP-TO THE DATE OF ORIGINAL ORDER. THE LD. AO OPINED THAT IF IN CASE AT A LATER STAGE, APPELLATE AUTHORITIES DECIDE THAT INTEREST UNDER SE CTION 220(2) WAS TO BE CHARGED FROM THE DATE OF FRESH ASSESSMENT ORDER, TH EN IN THAT CASE THE 4 ITA NO.3118/MUM/2018 SHRI ASHWIN S. MEHTA ASSESSMENT YEAR-1992-93 INTEREST U/S 234B SHALL BE CHARGED TILL THE DATE OF FRESH ASSESSMENT ORDER AND THEREFORE, NO SEPARATE DEMAND WAS RAISED ON THI S ACCOUNT. REGARDING INTEREST U/S 234A, LD. AO CONCLUDED THAT NO VALID R ETURN OF INCOME WAS EVER FILED BY THE ASSESSEE AND THEREFORE, THE INTEREST U /S 234A WAS TO BE CHARGED TILL THE DATE OF FRESH ASSESSMENT ORDER. AT PRESENT THE INTEREST U/S 234A WAS CHARGED TILL THE DATE OF ORIGINAL ASSESSME NT ORDER. HOWEVER, LD. AO, IN THE SIMILAR MANNER, OPINED THAT IF AT ANY LA TER STAGE APPELLATE AUTHORITY DECIDES THAT INTEREST UNDER SEC. 220(2) W AS TO BE CHARGED FROM THE DATE OF FRESH ASSESSMENT ORDER, THEN IN THAT CA SE THE INTEREST U/S 234A SHALL BE CHARGED TILL THE DATE OF FRESH ASSESSMENT ORDER. REGARDING INTEREST U/S 234C, THE ASSESSEE SUBMITTED THAT THE ISSUE COU LD NOT BE TAKEN UP IN ASSESSEES RECTIFICATION APPLICATION. HOWEVER, DISR EGARDING THE SAME ON THE GROUND THAT INTEREST U/S 234C WAS ALREADY CHARGED A T RS.13.98 CRORES WHILE COMPLETING THE ASSESSMENT, THE LD. AO HELD TH AT ASSESSEE WAS LIABLE TO PAY INTEREST FOR DEFERMENT OF ADVANCE TAX PAYMEN T ON THE BASIS OF ASSESSED INCOME. THEREFORE, LD. AO CONCLUDED THAT I NTEREST U/S 234C WAS TO BE CHARGED ACCORDINGLY AFTER DUE VERIFICATION. 4.1 AGGRIEVED, THE ASSESSEE CONTESTED THE STAND OF LD. AO, BY WAY OF ELABORATE SUBMISSIONS, BEFORE LD. FIRST APPELLATE A UTHORITY, WHICH HAS ALREADY BEEN REPRODUCED IN THE IMPUGNED ORDER AND T HEREFORE, NOT REPEATED HERE FOR THE SAKE OF BREVITY AND TO AVOID DUPLICATI ON. THE LD. FIRST APPELLATE AUTHORITY, RELYING UPON CERTAIN BINDING JUDICIAL PR ONOUNCEMENTS AND ALSO RELYING UPON THE ORDER OF ITS PREDECESSOR IN ASSESS EES OWN CASE FOR SAME AY, DIRECTED LD. AO TO RECOMPUTE INTEREST U/S 220(2 ) FROM THE DUE DATE AS 5 ITA NO.3118/MUM/2018 SHRI ASHWIN S. MEHTA ASSESSMENT YEAR-1992-93 PER THE FRESH ASSESSMENT ORDER AND NOT FROM THE DUE DATE AS PER THE ORIGINAL ASSESSMENT ORDER. 4.2 REGARDING ALTERNATIVE STAND OF LD. AO IN CHARGI NG OF INTEREST U/S 234A & 234B, THE FIRST APPELLATE AUTHORITY CAME TO A CON CLUSION THAT THE ISSUE WAS DISPUTABLE AND COULD NOT BE CONSIDERED WHILE PASSIN G RECTIFICATION ORDER U/S 154. THE ASSESSEES GROUND OF CHARGING OF INTEREST U/S 234C WERE TERMED AS INFRUCTUOUS SINCE THE FIRST APPELLATE AUTHORITY, VIDE ORDER DATED 28/02/2017, IN ASSESSEES APPEAL AGAINST ORDER U/S 143(3) R.W.S. 254 HAD ALREADY HELD THAT INTEREST U/S 234C WAS TO BE COMPU TED ON THE BASIS OF RETURNED INCOME. 4.3 AGGRIEVED AS AFORESAID, THE REVENUE IS IN FURTH ER APPEAL BEFORE US. 5. WE HAVE PERUSED THE CITED ORDER OF TRIBUNAL REND ERED IN CROSS- APPEALS IN ASSESSEES OWN CASE FOR AY 1992-93 PASSE D IN THE MATTER OF ASSESSMENT FRAMED U/S 143(3) R.W.S. 254 OF THE ACT. WE FIND THAT THE ISSUE OF CHARGING OF INTEREST U/S 234A, 234B, 234C & 220( 2) HAS ALREADY BEEN DELVED INTO BY THE CO-ORDINATE BENCH, IN PARA 61.1 OF THE ORDER. IN THE SAID PARA, THE REVENUE AUTHORITIES HAVE BEEN DIRECTED TO FOLLOW THE ORDER PASSED IN THE CASE OF LATE HARSHAD S. MEHTA VIDE PARA NOS. 29 TO 30.10 AND CHARGED INTEREST ACCORDINGLY. IN PARA 30.10 OF THE ORDER, IT HAS BEEN HELD THAT INTEREST U/S 220(2) WAS TO BE CHARGED FROM THE DATE OF DEFAULT OF FRESH DEMAND NOTICE ISSUED AFTER THE FRESH ASSESSMENT MAD E IN CONSEQUENT OF THE ORDERS OF THE APPELLATE AUTHORITIES. SIMILARLY, THE ISSUE OF CHARGING OF INTEREST U/S 234A, 234B & 234C HAS ALSO BEEN DEALT WITH BY THE COORDINATE BENCH, IN OTHER PARAS. SINCE A VIEW HAS ALREADY BEE N TAKEN BY THE 6 ITA NO.3118/MUM/2018 SHRI ASHWIN S. MEHTA ASSESSMENT YEAR-1992-93 COORDINATE BENCH IN THE MATTER, REFRAINING FROM DEL VING INTO THE ISSUES ANY FURTHER, WE DIRECT LD. AO TO FOLLOW THE CITED ORDER OF THE TRIBUNAL. 6. IN RESULT, THE APPEAL STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH JULY, 2019. SD/- SD/- (SANDEEP GOSAIN) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 16/07/2019 SR.PS:-JAISY VARGHESE / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. !' / THE RESPONDENT 3. # ( ) / THE CIT(A) 4. # / CIT CONCERNED 5. $%!& ' , ' , / DR, ITAT, MUMBAI 6. %)*+ / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.