M/s Indian Farmers Fertiliser Cooperative Ltd., New Delhi V. ACIT, New Delhi

ITA 3398/DEL/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 7496 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 13-01-2012
• Assessment Year: 1997-1998
• Appeal Filed On: 01-07-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S GILL
• Section: 244A; 154

Judgement Text

ITA NOS. 3398-3399/DEL/2011 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C NEW DELHI BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NOS. 3398 & 3399/DEL/2011 A.YRS.. : 1997-98 & 1998-99 M/S INDIAN FARMERS FERTILIZER COOPERATIVE LTD. IFFCO SADAN, C-1, DISTRICT CENTRE, SAKET PLACE, NEW DELHI 17 (PAN : AAA AI 0050 M) VS. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 23(1), ROOM NO. 190, CR BUILDING, IP ESTATE, NEW DELHI (APPELLANT ) (APPELLANT ) (APPELLANT ) (APPELLANT ) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) ASSEESSEE BY : SH. HARBHAJAN SINGH, JT. G.M. (TAXATION) DEPARTMENT BY : SH. R.I.S. GILL, C.I.T.(D.R.) ORDER ORDER ORDER ORDER PER BENCH PER BENCH PER BENCH PER BENCH THESE TWO APPEALS FILED BY THE ASSESSEE ARE DIREC TED AGAINST THE RESPECTIVE ORDERS OF THE LD. COMMISSIONER OF INCOME T AX (APPEALS)- XXII, NEW DELHI PERTAINING TO ASSESSMENT YEARS 19 97-98 & 1998-99 RESPECTIVELY. SINCE THE ISSUES ARE COMMON AND HEN CE, THE APPEALS WERE HEARD TOGETHER. THESE APPEALS ARE BEING CONSO LIDATED AND DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CO NVENIENCE. 2. THE GROUNDS RAISED IN ITA NO. 3398/DEL/2011 READ AS UNDER:- I) THAT THE ORDER DATED 22.3.2011 PASSED U/S. 250 OF THE INCOME TAX ACT BY THE LD. LD. COMMISSIONER OF INCOME TAX (APPEALS), NEW DELHI IS BAD IN LAW AND WRONG ON FACT S. ITA NOS. 3398-3399/DEL/2011 2 II) THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW IN REJECTING THE CLAIM OF THE ASSESSEE F OR ALLOWING INTEREST ON THE AMOUNT UNLAWFULLY WITHHELD BY THE DEPARTMENT, TILL THE DATE OF REFUND OF SUCH AMOUNT. III) THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS FAILED TO APPRECIATE THE FACT THAT DUE TO UNLAWFULLY WITHHOLD ING OF THE DUE AMOUNT TO THE ASSESSEE, THE ASSESSEE WAS DEPRIVED OF UTILIZING SUCH AMOUNT. IV) THAT THE APPELLANT CRAVES LEAVE TO RESERVE TO I TSELF THE RIGHT TO ADD, ALTER AND / OR VARY ANY GROUND(S) AT OR BEF ORE THE TIME OF HEARING. 3. THE GROUNDS RAISED IN ITA NO. 3399/DEL/2011 READ AS UNDER:- I) THAT THE ORDER DATED 21.3.2011 PASSED U/S. 250 OF THE INCOME TAX ACT BY THE LD. LD. COMMISSIONER OF INCOME TAX (APPEALS), NEW DELHI IS BAD IN LAW AND WRONG ON FACT S. II) THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW IN REJECTING THE CLAIM OF THE ASSESSEE F OR ALLOWING INTEREST ON THE AMOUNT UNLAWFULLY WITHHELD BY THE DEPARTMENT, TILL THE DATE OF REFUND OF SUCH AMOUNT. III) THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS FAILED TO APPRECIATE THE FACT THAT DUE TO UNLAWFULLY WITHHOLD ING OF THE DUE AMOUNT TO THE ASSESSEE, THE ASSESSEE WAS DEPRIVED OF UTILIZING SUCH AMOUNT. ITA NOS. 3398-3399/DEL/2011 3 IV) THAT THE APPELLANT CRAVES LEAVE TO RESERVE TO I TSELF THE RIGHT TO ADD, ALTER AND / OR VARY ANY GROUND(S) AT OR BEF ORE THE TIME OF HEARING. 4. SINCE THE FACTS ARE IDENTICAL, WE ARE TAKING UP THE FACTS FROM THE ASSESSMENT YEAR 1997-98 FOR THE SAKE OF CONVENIENCE . 5. IN THIS CASE REFUND OF 10,38,32,977/- HAS BEEN D ETERMINED BY THE ASSESSING OFFICER. NO INTEREST HAS BEEN GRANTED U/ S. 244A, THOUGH THE TAX AND INTEREST PAYABLE ON THE RETURNED INCOME WAS COMPUTED AT ` 26,87,16,819/- AS AGAINST THE PRE-PAID TAXES OF ` 3 7,25,49,796/- INCLUDING ADVANCE TAX OF ` 24,64,00,000/-. MOREOVE R, THE REFUND OF ` 10,38,32,977/- HAS BEEN FULLY ADJUSTED AGAINST THE DEMAND FOR A.Y. 1996-97, VIDE VOUCHER DATED 19.3.1999. ASSESSEE F ILED AN APPLICATION U/S 154 DATED 18.7.2001, SEEKING GRANT OF INTEREST U/S. 244A FOR THE PERIOD 1.4.1997 TO 31.3.1999, THAT IS, UPTO THE MONT H IN WHICH THE REFUND WAS ADJUSTED. HOWEVER, THE APPLICATION U/ S. 154 HAS BEEN REJECTED, ON ACCOUNT OF BEING BARRED BY LIMITATION. IT WAS HELD THAT NO ORDER U/S. 154 COULD BE PASSED AFTER THE EXPIRY OF 4 YEARS FROM THE END OF THE YEAR IN WHICH THE ORDER SOUGHT TO BE AM ENDED WAS PASSED. 6. UPON ASSESSEES APPEAL IN THIS REGARD LD. COMMISS IONER OF INCOME TAX (APPEALS) HELD THAT HE AGREED WITH THE A SSESSEE THAT INTEREST U/S 244A SHOULD HAVE BEEN GRANTED BY THE ASSESSING OFFICER, FOR WHICH THERE WAS NO REQUIREMENT IN LAW FOR THE A SSESSEE TO CLAIM THE INTEREST. LD. COMMISSIONER OF INCOME TAX (APPE ALS) FURTHER OBSERVED THAT ASSESSEE HAS ALSO SOUGHT THAT IT BE GRANTED INTEREST ON THE DELAYED PAYMENT OF INTEREST, RELYING ON THE APE X COURT JUDGEMENT IN THE CASE OF SANDVIK ASIA LTD. VS. C.I.T. & OTHER S (280 ITR 643). THE LD. COMMISSIONER OF INCOME TAX (APPEALS) FOUND THAT T HE SAID DECISION ITA NOS. 3398-3399/DEL/2011 4 IS DISTINGUISHABLE FROM THE FACTS OF THE PRESENT CA SE. ULTIMATELY, LD. COMMISSIONER OF INCOME TAX (APPEALS) HELD THAT INTER EST OF JUSTICE WOULD BE MET BY GRANTING THE INTEREST U/S. 244A UPT O THE DATE OF ADJUSTMENT OF THE REFUND, AND DECLINED TO ORDER GR ANTING OF INTEREST ON INTEREST. 7. AGAINST THE ABOVE ORDER THE ASSESSEE IS IN APPEA L BEFORE US. 8. LD. COUNSEL OF THE ASSESSEE SUBMITTED A PAPER BOO K WHEREIN ALL THE RELEVANT FACTS AND FIGURES WERE INCORPORATED. THE ASSESSEES CLAIM IS INTEREST ON THE DELAYED PAYMENT OF INTEREST AND FOR THIS PURPOSE ASSESSEE HAS RELIED UPON THE CBDT INSTRUCTI ON NO. 2-2007, DATED 28.3.2007. IN THESE INSTRUCTIONS THE CBDT INS TRUCTED THAT INTEREST PAYABLE UNDER SECTION 244A OF THE IT ACT, 1961 ON THE AMOUNT OF REFUND SHOULD BE GRANTED SIMULTANEOUSLY WITH THE GRANT OF REFUND AND THERE SHOULD BE NO OMISSION OR DELAY IN GRANT O F SUCH INTEREST. LD. COUNSEL OF THE ASSESSEE FURTHER PLACED RELIANCE UPO N THE FOLLOWING DECISIONS: - HONBLE GUJRAT HIGH COURT ORDER DATED 3.7.2007 IN THE CASE OF GUJARAT FLOURCHEMICALS LTD. VS. CI.T. IN CIVIL APPEA L NO. 12855 OF 1994. - HONBLE APEX COURT IN THE CASE OF C.I.T. VS. NARE NDRA DOSHI 254 ITR 606 - HONBLE APEX COURT IN THE CASE OF SANDVIK ASIA LT D. VS. C.I.T. & ORS. 280 ITR 643. - HONBLE DELHI HIGH COURT IN THE CASE OF C.I.T. VS. GOODYEAR INDIA LTD. 249 ITR 527. ITA NOS. 3398-3399/DEL/2011 5 9. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. 10. WE FIND THAT HONBLE APEX COURT IN THE CASE O F SANDVIK ASIA LTD. VS. C.I.T. & ORS. 280 ITR 643 HAD HELD THAT ASSESS EE WAS ENTITLED TO COMPENSATION BY WAY OF INTEREST UNDER SECTION 214 AN D SECTION 244 FOR THE DELAY IN PAYMENT INTEREST U/S 214 AND 244 LAWFUL LY DUE TO THE ASSESSEE WHICH WERE WITHHELD WRONGLY AND CONTRARY T O LAW BY THE DEPARTMENT FOR INORDINATE LONG PERIOD. IN OUR CON SIDERED OPINION, THE RATIO FROM THIS CASE LAW IS RIGHTLY APPLICABLE ON THE FACTS OF THE CASE. THE ABOVE SAID CBDT INSTRUCTION NO. 2-2007, DATED 2 8.3.2007 IS ALSO GERMANE IN THIS REGARD. HENCE, IN OUR CONSIDERED OPINION, THE ASSESSEE IS ENTITLED TO INTEREST ON THE DELAYED P AYMENT OF INTEREST AND ACCORDINGLY THE ASSESSEES APPEAL IS ALLOWED. 11. IN THE RESULT, BOTH THE APPEALS FILED BY THE ASSESSEE STAND ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 20/1/2012. SD/- SD/- [I.P. BANSAL] [I.P. BANSAL] [I.P. BANSAL] [I.P. BANSAL] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE 20/1/2012 SRB COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES