Sh. Deepak Mittal, Hoshiarpur V. The Asstt. Commissioner of Income-tax, Hoshiarpur

ITA 343/ASR/2012

• Counselvise Citation: 34320914 RSA 2012
• Duration Of Justice: 1 year(s) 7 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 06-12-2012
• Assessment Year: 2004-2005
• Appeal Filed On: 21-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: VINAY MALHOTRA
• Section: 143(3); 80IB; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER I.T.A. NOS. 341, 342,343 & 344.(ASR)/2012 ASSESSMENT YEARS:2001-02, 2002-03, 2004-05, 2005-06 PAN :AARPM7571R SHRI DEEPAK MITTAL VS. ASSTT. COMMISSIONER OF INC OME TAX, C/O M/S. SONALIKA AGRO INDS. HOSHIARPUR. JALANDHAR ROAD, HOSHIARPUR. (APPELLANT) (RESPONDENT) APPELLANT BY:SH. VINAY MALHOTRA, CA RESPONDENT BY:SH.TARSEM LAL, DR DATE OF HEARING: 18/03/2014 DATE OF PRONOUNCEMENT:31/03/2014 ORDER PER BENCH ; THESE FOUR APPEALS OF THE ASSESSEE ARISE FROM TH E DIFFERENT ORDERS OF THE CIT(A), JALANDHAR EACH DATED 26.06.2012 FOR THE ASSESSMENT YEARS 2001- 02, 2002-03, 2004-05 & 2005-06. AS THE ISSUES INVOL VED IN ALL THE APPEALS ITA NOS.341 TO 344(ASR)/2012 2 ARE IDENTICAL, THESE WERE HEARD TOGETHER AND ARE BE ING DISPOSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. THE GROUNDS RAISED BY THE ASSESSEE IN ITA NO. 341(ASR)/2012 FOR THE ASSESSMEN T YEAR 2001-02, WHICH ARE IDENTICAL IN OTHER APPEALS ARE REPRODUCED AS UN DER: 1. THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE CHARGING OF INTEREST U/S 220(2) AGAINST THE LEGAL PROVISIONS AN D THE FACTS OF THE CASE AND HAS FURTHER WRONGLY HELD THAT THE ENTI RE DEMAND AS RAISED BY THE AO IN ASSESSMENT FRAMED U/S 145(3) HA S NOT BEEN DELETED BY THE CIT(A) AND THE DEMAND NOTICE ISSUED FOR THE DEMAND U/S 145(3) HAS NOT STAND SATISFIED. 2. THAT THE LD. CIT(A) HAS ERRED BOTH LEGALLY & ON THE FACTS OF THE CASE IN HOLDING THAT THE DEMAND CREATED ON THE ENHA NCEMENT OF INCOME BY CIT(A) IS THE CONTINUATION OF THE ORIGINA L DEMAND AND NOT A SEPARATE DEMAND WHICH ARISES ONLY AFTER E NHANCEMENT ORDER IS PASSED BY THE CIT(A) AT A LATER DATE, FOR WHICH THE DATE OF THE NEW NOTICE OF DEMAND OF ADDITIONAL TAX IS TH E BASIS FOR THE CHARGING OF TAX AND INTEREST ON THE DELAYED PAY MENTS. 3. THAT THE LD. CIT(A) HAS ERRED IN NOT CONSIDERING THE RELIEF OF AMOUNT OF TAX, ON WHICH INTEREST U/S 220(2) WAS CHA RGEABLE, RESULTING OUT OF THE ORDER PASSED U/S 250(6) WHICH HAS BEEN UPHELD BY THE HONBLE ITAT & JURISDICTIONAL HIGH CO URT THUS ATTAINED FINALITY AS NO FURTHER APPEAL WAS PREFERR ED BY THE DEPARTMENT. 4. IT IS PRAYED THAT INTEREST AS CHARGED U/S 220(2) MAY PLEASE BE DELETED. 5. THAT THE APPELLATE REQUEST FOR LEAVE TO ADD OR A LTER THE GROUNDS OF APPEAL BEFORE THE APPEAL IS HEARD AND DISPOSED OFF. 2. FIRST OF ALL, WE TAKE UP APPEAL OF THE ASSESSEE IN ITA NO.341(ASR)/2012 FOR THE ASSESSMENT YEAR 2001-02 AN D OUR DECISION ITA NOS.341 TO 344(ASR)/2012 3 HEREINBELOW SHALL BE IDENTICALLY APPLICABLE IN ALL OTHER APPEALS MENTIONED HEREINABOVE. 3. THE BRIEF FACTS IN ITA NO.341(ASR)/2012 FOR THE ASSESSMENT YEAR 2001-02 AS PER ORDER OF THE CIT(A) ARE REPRODUCED AS UNDER: 2. THE APPEAL IS DIRECTED AGAINST THE ORDER DATED 01.10.2009 OF THE AO CHARGING INTEREST AMOUNTING TO RS.45,100/- U/S 220(2) OF THE INCOME TAX ACT. AS PER THE ORDER UNDE R APPEAL AN INCOME TAX DEMAND OF RS.27,62,303/- WAS RAISED VIDE ORDER DATED 29.12.2006 U/S 143(3) OF THE ACT FOR THE ASSESSMENT YEAR 2001-02 IN THE CASE OF THE ASSESSEE, AND THE CORRESPONDING NO TICE OF DEMAND WAS SERVED ON THE ASSESSEE ON 29.12.2006. AN ADDITIONAL DEMAND ON ACCOUNT OF INTEREST AMOUNTING TO RS.3,57,434/- WAS RAISED VIDE ORDER DATED 10.12.2007 U/S 154 OF THE ACT, FOR WHICH THE DEMAND NOTICE WAS SERVED ON THE ASSESSEE ON 12.12.2007. THE ORIGINAL DEMAND, WHICH WAS DUE TO BE PAID ON OR BEFORE 28.01.2007, WAS PAI D BY THE ASSESSEE IN INSTALMENTS, THE LAST INSTALMENT BEING PAID ON 1 4.02.2008. THE AO HAS HELD IN THE IMPUGNED ORDER THAT INTEREST WAS CH ARGEABLE U/S 220(2) FROM 28.01.2007 IN RESPECT OF THE NET TAX AN D INTEREST DEMANDED, AFTER GIVING EFFECT TO THE ORDER OF THE C IT(A). HE HAS CHARGED INTEREST OF RS.45,100/- U/S 220(2). THE A SSESSEE HAS CONTESTED THE LEVY OF THIS INTEREST. 4. THE LD. CIT(A) HAS OBSERVED IN PARAS 6 TO 8 OF T HE ORDER, WHICH FOR THE SAKE OF CONVENIENCE IS REPRODUCED AS UNDER: 6. I HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFULLY. IN THE IMPUGNED ORDER THE AO HAS NOTED THAT THE DEMAND RAI SED ORIGINALLY VIDE ORDER U/S 143(3) DATED 29/12/2006 AND U/S 154 DATED 10/12/2007 HAD BEEN REDUCED TO RS.30,35,118/- U/S 250(6) VIDE ORDER DATED 14/9/2009. NO APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER DATED 14/09/2009 OF THE AO GIVING APPEAL EFFECT TO THE ORDER DATED 26.8.2009 OF THE CIT(A). SINCE THE ORDER DATED 14/0 9/2009 GIVING EFFECT TO THE ORDER OF THE CIT(A), JALANDHAR IS ENT IRELY DIFFERENT FROM THE SUBJECT MATTER OF THE IMPUGNED ORDER DATED 01/1 0/2009 U/S 22(2) ITA NOS.341 TO 344(ASR)/2012 4 OF THE ACT, THE ADDITIONAL GROUND OF APPEAL WHICH SEEKS TO CHALLENGE THE ORDER DATED 14.09.2009 GIVING EFFECT TO THE ORD ER OF THE CIT(A) CANNOT BE ALLOWED TO BE RAISED IN THE PROCEEDINGS R ELATING TO THE APPEAL AGAINST THE ORDER DATED 01.10.2009 U/S 220(2 ) OF THE ACT. IN THE APPEAL AGAINST THE ORDER CHARGING INTEREST, THE COMPUTATION OF THE TOTAL INCOME ASSESSED EARLIER GIVING RISE TO THE DE MAND UNDER WHICH INTEREST WAS CHARGED CANNOT BE ALLOWED TO BE RAISED . THE ADDITIONAL GROUND OF APPEAL IS, THEREFORE, NOT ADMITTED FOR AD JUDICATION. 7. I AM ALSO OF THE VIEW THAT SINCE THE CORRECTNESS OF THE ORDER DATED 14.09.2009 GIVING EFFECT TO THE APPELLATE ORD ER DATED 26/08/2009 HAS NOT BEEN CHALLENGED IN APPEAL, ITS C ORRECTNESS CANNOT BE CONSIDERED IN THE PRESENT APPEAL RELATING TO THE CHARGING OF INTEREST. THE AO HAS RAISED A PERTINENT ISSUE REGAR DING MAINTAINABILITY OF THE PRESENT APPEAL, SINCE APPEA L AGAINST AN ORDER CHARGING INTEREST U/S 220(2) OF THE ACT HAS NOT BEE N PROVIDED SPECIFICALLY IN SECTION 246A OF THE ACT. THE HONBL E JURISDICTIONAL TRIBUNAL HAVE, HOWEVER, IN THEIR DECISION DATED 20. 4.2007 IN THE CASE OF THE NAKODAR CO-OP. SUGAR MILLS LTD; NAKODAR VS. TRO IN ITA NO.84(ASR)/2006, HELD THAT THE OBJECTION OF THE LD. CIT(A) THAT NO APPEAL WAS MAINTAINABLE AGAINST THE ORDER PASSED U/ S 220(2) OF THE ACT COULD NOT BE UPHELD. IT WAS HELD THAT ONCE THER E WAS NO DEMAND OUTSTANDING AGAINST THE ASSESSEE, NO INTEREST U/S 2 20(2) WAS CHARGEABLE ON THE FACTS OF THE CASE. IT IS SEEN THA T THE ASSESSEE HAS DENIED HIS LIABILITY OF INTEREST U/S 220(2) FOR THE REASON THAT THE DEMAND RAISED ORIGINALLY SHOULD HAVE BEEN REDUCED T O NIL AND A FRESH DEMAND NOTICE IN RESPECT OF THE ENHANCEMENT TO THE INCOME OF THE ASSESSEE BY THE CIT(A) SHOULD HAVE BEEN RAISED. HEN CE, FOR THE REASON THAT THE ASSESSEE HAS DENIED HIS LIABILITY TO PAY I NTEREST U/S 220(2) OF THE ACT AND IN LIGHT OF THE DECISION OF HONBLE JUR ISDICTIONAL TRIBUNAL IN THE CASE OF THE NAKODAR CO-OP. SUGAR MILLS LTD, NAKODAR VS. TRO(SUPRA), I HOLD THAT THE APPEAL IS MAINTAINABLE IN THIS CASE. 8. AS PER THE ORDER DATED 14.09.2009, THE DISALLOWA NCE U/S 80IB FULLY DISALLOWED BY THE AO HAD BEEN RESTRICTED BY THE CIT(A) U/S 80IA(10) BY CONSIDERING THE REASONABLE NET PROFIT T O BE 20% OF THE JOB RECEIPTS FROM M/S. ITL. THE AO HAS, ACCORDINGLY, CO MPUTED THE TOTAL INCOME AND THE DEMAND PAYABLE BY THE ASSESSEE AS PE R THE DECISION OF THE CIT(A). THIS DEMAND HAS BEEN TAKEN TO BE IN CON TINUATION OF THE DEMAND RAISED ORIGINALLY BY THE AO AFTER ASSESSMENT . I AM OF THE VIEW THAT SINCE THE CORRECTNESS OF THE ORDER DATED 14.09 .2009 OF THE AO HAS ITA NOS.341 TO 344(ASR)/2012 5 NOT BEEN CHALLENGED IN APPEAL AND IS NOT THE SUBJEC T MATTER OF APPEAL IN THE PRESENT PROCEEDINGS, THE AO WAS JUSTIFIED IN CHARGING INTEREST ON THE DEMAND REMAINING AFTER GIVING EFFECT TO THE ORDER OF THE CIT(A) FOR THE BELATED PAYMENT OF TAX AND INTEREST. THE G ROUND OF APPEAL IS, THEREFORE, REJECTED. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. WE ARE OF THE VIEW THAT THE ADDITION MADE IN THE OR DER PASSED U/S 143(3) OF THE ACT HAS BEEN DELETED BY THE LD. CIT(A). THEREFO RE, DEMAND IN THE ORIGINAL ORDER STANDS SATISFIED. THE LD. CIT(A) HA S MADE ENHANCEMENT VIDE HIS ORDER DATED 26.08.2009 AND SO THE DEMAND ON WHI CH INTEREST CAN BE CHARGED U/S 220(2) FROM THE DATE OF ORDER OF ENHAN CEMENT. IN THE PRESENT CASE, THE PAYMENT OF TAX HAS BEEN MADE AGAINST THE ORDER PASSED U/S 143(3) AND THE DEMAND AGAINST THE ORDER PASSED U/S 143(3) OF THE ACT HAS BEEN DELETED BY THE LD. CIT(A) HIMSELF. RELIANCE IS PLAC ED ON CBDT CIRCULAR NO.334 DATED 3.4.1982, WHICH IS BINDING ON INCOME T AX AUTHORITIES, IT IS STATED THAT WHERE THE DEMAND HAS BEEN DELETED BY TH E INCOME TAX DEPARTMENT AND SUBSEQUENTLY NOT VARIED BY THE HIG HER AUTHORITIES, NO INTEREST U/S 220(2) OF THE ACT, CAN BE LEVIED. ALSO , IN THE IMPUGNED ORDER, THE APPEAL BY THE ASSESSEE HAS BEEN ALLOWED BY US IN IT A NO.424(ASR)/209 FOR THE ASSESSMENT YEAR 2001-02 BY OUR ORDER OF EVEN D ATE. ACCORDINGLY, INTEREST U/S 220(2) OF THE ACT, SO LEVIED, CANNOT BE CHARGED AND INTEREST SO ITA NOS.341 TO 344(ASR)/2012 6 CHARGED IS DIRECTED TO BE DELETED. ACCORDINGLY, ALL THE GROUNDS OF THE ASSESSEE ARE ALLOWED. 6. SINCE THE FACTS IN ALL OTHER APPEALS MENTIONED H EREINABOVE ARE IDENTICAL TO THE FACTS IN ITA NO. 341(ASR)/2012 FO R THE A.Y. 2001-2002, THEREFORE, OUR DECISION HEREINABOVE IN THE CASE OF ASSESSEE IN ITA NO.341(ASR)/2012 IS IDENTICALLY APPLICABLE IN ALL THE PRESENT APPEALS I.E. IN ITA NOS. 342 TO 344(ASR)/2012 FOR THE ASSESSMENT YE ARS, MENTIONED HEREINABOVE. ACCORDINGLY, ALL THE APPEALS OF ASSESS EE ARE ALLOWED. 7. IN THE RESULT, ALL THE FOUR APPEALS FILED BY THE ASSESSEE IN ITA NOS.341 TO 344(ASR)/2012 ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 31ST MARCH, 2014. SD/- SD/- (H.S. SIDHU) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 31ST MARCH, 2014 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:SH. DEEPAK MITTAL, HOSHIARPUR. 2. THE ACIT, HOSHIARPUR. 3. THE CIT(A), JALANDHAR. 4. THE CIT, JALANDHAR. 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR ITA NOS.341 TO 344(ASR)/2012 7