Softouch Hygeine Products(Mkt.) Ltd, Ahmedabad V. The Income Tax Officer Wd. 8(2), Ahmedabad

ITA 3436/AHD/2009

• Counselvise Citation: 343620514 RSA 2009
• Duration Of Justice: 2 year(s) 1 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-02-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 1997-1998
• Appeal Filed On: 30-12-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: GIRISH MEHTA AR
• Keywords: Question of law
• Section: 143(3); 234B; 260A

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C AHMEDABAD , . , !' BEFORE SHRI MUKUL KUMAR SHRAWAT, JUDICIAL MEMBER AND SHRI A MOHON ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO.3436/AHD/2009 $ %$ $ %$ $ %$ $ %$ / / / / ASSESSMENT YEAR:-1997-98 SOFTOUGH HYGIENE PRODUCTS (MKT) PVT. LTD., HANSOL, P.O. SARDARNAGAR, AHMEDABAD PAN NO.AACCS9973P / V/S . DY. COMMISSIONER INCOME-TAX OFFICE, CIRCLE-12, AHMEDABAD &'/ APPELLANT .. ()&'/ RESPONDENT &'/ BY APPELLANT SHRI GIRISH MEHTA, AR ()&' * + ! / BY RESPONDENT SHRI VINOD TANWANI, SR-DR , * -' / DATE OF HEARING 21-02-2012 .% * -' /DATE OF PRONOUNCEMENT 24 -02-2012 !/ !/ !/ !/ / // / O R D E R , /PER MUKUL KUMAR SHRAWAT, JUDICIAL MEMBER :- THIS APPEAL HAS BEEN FILED BY THE ASSESSEE ARISING FROM THE ORDER OF LD. COMMISSIONER OF INCOME-TAX (APPEAL)-XIV, AHMEDABAD ORDER DATED 16-11- 2009 FOR THE ASSESSMENT YEAR 1997-98. 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS:- 1. THE LD CIT(A) HAS ERRED IN CONFIRMING THE ORDER OF THE AO U/S.143(3) R.W. 254 WHICH IS PREMATURE AS IT IS PASSED BY CHARGING INTEREST U/S.234-B ON THE TOTAL INCOME WHICH IS NOT FINALLY ASSESSED AS PER THE DIRECTION OF HON. TRIBUNAL. ITA NO.3436/AHD/2009 A.Y. 1997-98 SOFTOUGH HYGINE PRODUCTS (MKT) P. LTD. V. DCIT CIR-12 AHD PAGE 2 1.1 THE LD CIT(A) HAS ERRED IN CONFIRMING THE ORDER U/S.143(3) R.W.S. 254 PASSED BY THE AO CHARGING INTEREST U/S. 234-B, THOUGH THE APPEALS FILED BY THE APPELLANTS AGAINST THE ORDERS OF THE HON. TRIBUNAL AGAINST THE QUANTUM ADDITIONS AND AGAINST CHARGING OF INTEREST U/S. 234-B ARE ADMITTED BY HON. GUJARAT HIGH COURT AND PENDING FOR FINAL HEARING. 1.2 THE LD CIT(A) HAS ERRED IN CONFIRMING THE ORDER OF THE AO U/S. 143(3) R.W.S. 254 THOUGH THE DECISION REPORTED IN 2 47 ITR 209 (SC)WHICH IS FOLLOWED IN 261 ITR 220 (DELHI) AND IS SENT BACK BY SUPREME COURT AS REPORTED IN 278 ITR 1 (SC)TO CONSI DER THE QUESTION OF LAW OF CHARGING INTEREST U/S.234-B WHIC H IS STILL PENDING FOR HEARING. 1.3 IN VIEW OF THE ABOVE FACTS AND APPELLANTS SUBMI T THAT THE ORDER OF AO CHARGING INTEREST U/S.234-B AS PER ORDER U/S.143 (3) R.W.S. 254 WHICH IS CONFIRMED BY THE LD CIT(A) BEING ILLEGAL, BE CANCELLED. 3. AS FAR AS THE SEVERAL GROUNDS ARE CONCERN ED, THE FUNDAMENTAL ISSUE IS THE LEVY OF INTEREST U/S. 234B OF IT ACT. ON THE DA TE OF HEARING, LD. AR, MR. GIRISH MEHTA APPEARED AND REQUESTED TO DECIDE THE A PPEAL AS PER A SHORT WRITTEN SUBMISSION CONTENTS OF THE SAME ARE REPRODU CED BELOW:- 1. THE FOLLOWING PAPERS ARE FILED ON RECORD:- (A) COPY OF THE APPLICATION FILED WITH THE REGISTRA R ON 30-12-09 WITH APPEAL MEMO U/S. 253(6)(D) FOR FEES PAYABLE OF RS.5 00/- (PAGE 16 OF P.B. 2) IN SUPPORT, COPY OF 291 ITR 314 (KARN ) IS FILED. (PAGES 31 TO 35 OF P.B.2) (B) PAPER BOOK NO.1 IS FILED ON 10-02-2010 ON RECOR D. (C) PAPER BOOK NO.2 IS FILED ON 2-01-2012 ON RECORD . (D) DECLARATION U/S. 158A(1) WITH FORM NO.8 IN DUPL ICATE WITH COPIES OF HON GUJARAT HIGH COURT ORDERS DATED 14-12 -2007 IS FILED ON 18-08-2011 ON RECORD. 2. WE REQUEST HON BENCH TO DECIDE THE FOLLOWING ISS UES AS PER WRITTEN SUBMISSIONS FILED ON RECORD:- (I) FEES PAYABLE U/S. 253 (6)(D) ARE OF RS.500/- AS THE SUBJECT MATTER OF THE APPEAL RELATES TO ANY MATTE OTHER THAN THOSE SP ECIFIED DIN CLAUSES (A) (B) AND (C). RELY ON 291 ITR 314 (KARN). (PAGES 31 TO 35 OF P.B 2). (II) ORDER MAY BE PASSED AS PER DECLARATION FILED U/S. 1 58A(1) WITH FORM NO.8. (III) IN THE ALTERNATIVE, ORDER MAY BE PASSED ON MERITS A S PER WRITTEN SUBMISSIONS. ITA NO.3436/AHD/2009 A.Y. 1997-98 SOFTOUGH HYGINE PRODUCTS (MKT) P. LTD. V. DCIT CIR-12 AHD PAGE 3 4. THE BACKGROUND IS LIKE THIS, THAT ASSESSING OFFI CER HAS PASSED AN ORDER U/S 143 R.W.S. 254 OF IT ACT DATED 17-10-2008 AND T HEREIN WHILE GIVING EFFECT OF AN ORDER OF THE TRIBUNAL BEARING ITA NO.594/AHD/2003 DATED 16-03-2007 PRONOUNCED IN ASSESSEES OWN CASE, THE AO HAS CATEG ORICALLY MENTIONED THAT IT WAS DIRECTED TO CHARGE INTEREST U/S. 234B OF THE ACT ON THE INCOME FINALLY ASSESSED. THE TOTAL INCOME WAS FINALLY ASSESSED AT RS.10,68,231/-. IT WAS REQUESTED BEFORE THE AO THAT INTEREST U/S 234B MAY NOT BE CHARGED BECAUSE AN APPEAL HAS BEEN FILED BEFORE THE HONBLE JURISDI CTIONAL HIGH COURT U/S. 260A OF I.T. ACT AGAINST THE AFORE-MENTIONED ORDER OF TH E TRIBUNAL. IT WAS INFORMED TO THE AO THAT THE SAID APPEAL HAS BEEN ADMITTED VI DE AN ORDER DATED 14-12- 2007 OF THE HONBLE JURISDICTIONAL HIGH COURT. IT W AS REQUESTED TO WAIT FOR THE FINAL ORDER OF THE HONBLE JURISDICTIONAL HIGH COUR T AND KEEP THE CHARGING OF INTEREST U/S. 234B PENDING. THE AO HAS HELD THAT NO STAY HAS BEEN GRANTED BY THE HONBLE JURISDICTIONAL HIGH COURT THEREFORE HE HAD TO FOLLOW THE DIRECTION OF THE HONBLE TRIBUNAL AND THEN GAVE THE EFFECT OF TH OSE DIRECTIONS. THE INTEREST WAS CHARGED AS PER LAW. THE MATTER WAS CARRIED BEFO RE THE FIRST APPELLATE AUTHORITY. 5. THE LD. CIT(A) HAS EXAMINED THE OPERATIVE PART OF THE DIRECTIONS OF THE TRIBUNAL AND THE RELEVANT PORTION IS REPRODUCED FOR READY REFERENCE. 2.3 I HAVE CONSIDERED THE FACTS OF THE CASE AND TH E SUBMISSIONS OF THE APPELLANT. I HAVE ALSO PERUSED THE CASE LAWS AS REL IED UPON BY THE APPELLANT. BEFORE CONSIDERING THE APPELLANTS SUBMI SSION, IT IS IMPORTANT TO LOOK ABOUT THE OPERATIVE PART OF THE DIRECTION G IVEN BY HONBLE ITAT AHMEDABAD B BENCH IN THE APPELLANTS CASE ( ITA NO.594/AHD/2003 AND ITA NO.7551/AHD/2003 ) VIDE ORDER DT: 16-03-07, AT PARA 7 OF THIS ORDER, HONBLE ITAT HELD THAT HAVING HEARD BOTH THE PARTIES AND PERUSING THE RECORD, WE FIND THAT THE CIT(A) HAS DE LETED THE INTEREST U/S. 234B ON THE GROUND THAT SINCE THE A.O HAS NOT SPECI FICALLY MENTIONED ANYTHING IN RESPECT OF CHARGING OF INTEREST U/S. 23 4B IN THE ASSTD. ORDER, THE INTEREST CHARGED IS TO BE CANCELLED. THE CIT(A) HAS RELIED UPON THE DECISION OF THE HON. SUPREME COURT IN THE CASE OF RACHI CLUB, 164 CTR (SC) 200). BUT WE HOLD THAT LEVY UNDER SEC. 234A & B IS MANDA TORY IN ACCORDANCE WITH THE DECISION OF HON. SC IN THE CASE OF CIT VS. ANJUM M.H. GHASWALA, 254 ITR 1 AND ALSO FOLLOWING TWO DEC ISIONS OF THE SPECIAL BENCH:- ITA NO.3436/AHD/2009 A.Y. 1997-98 SOFTOUGH HYGINE PRODUCTS (MKT) P. LTD. V. DCIT CIR-12 AHD PAGE 4 I) MOTOROLA INCOME. VS. DCIT 95 ITD (DEL) 269 II) DCIT AND ANOTHER VS. ROYALA JORDANIANS AIR LINE S 97 TTJ (DEL) (SB) 434. THE RELEVANT OBSERVATIONS OF THE SPECIAL BENCH IN T HE CASE OF DCIT VS. ROYAL JORDANIANS AIRLINES (SUPRA) AS UNDER:- 78. 79. IT IS IMPORTANT TO NOTE THAT THE SUBSEQUENT JUD GMENT OF THE LARGER BENCH OF HON. SUPREME COURT IN THE CASE OF ANJUIM M.H. GHASWALA (SUPRA) WAS NOT BROUGHT TO THE NOTICE OF HON. DELHI HIGH COURT IN THE CASE OF CIT VS. KISHAN LAL (HUF) (2002) 258 ITR 359 (DEL) AND (DEL) AND CIT VS. INSILCO LTD. (2003) 179 CTR (DEL) 214: (2003) 261 ITR 20 (DEL). 80. WE MAY MENTION HERE THAT THE VIEW BEING TAKEN B Y US FINDS AMPLE SUPPORT FROM THE JUDGMENT OF THE HON. PUNJAB & HARY ANA HIGH COURT IN THE CASE OF VINOD KHURANA VS. CIT (2001) 170 CTR (P &H) 383: (2002) 253 ITR 578 (P&H) WHICH IS TURN, HAS BEEN BASED ON THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF KALYAN KUM AR RAY VS. CIT. ABOVE ALL, WE FIND THAT THE HON. SUPREME COURT HAS, IN THE CASE OF ANJUM M.H. GHASWALA (SUPRA) CLEARLY HELD THAT INTER EST U/S. 234A, 234B & 234C HAS TO BE CHARGED IN ALL THE CASES HERE IT I S REQUIRED TO BE CHARGED AND THE POWER TO REDUCE OR WAIVE CAN BE EXE RCISED ONLY IN THE MANNER PROVIDED IN THE RELEVANT CBDT CIRCULAR ISSUE D IN EXERCISE OF SPECIAL POWERS OF RELAXATION VESTED IN CBDT U/S. 11 9. IT IS TRUE THAT JUDGMENT HAS BEEN DELIVERED IN CONNECTION WITH AN O RDER OF SETTLEMENT COMMISSION, BUT THE LAW PRONOUNCED IN THAT JUDGMENT IS BINDING UPON ALL AUTHORITIES CONCERNED. IN OUR HUMBLE OPINION TH ERE IS NO APPARENT CONFLICT BETWEEN THE TWO JUDGMENTS OF HON;BLE SUPRE ME COURT IN THE CASE OF RANCHI CLUB LTD. (SUPRA) AND IN THE CASE OF ANJUM M.H. GHASWALA (SUPRA). IF THERE IS ONE, THE JUDGMENTS OF HON. SUPREME COURT IN THE CASE OF ANUJUM M.H. GHASWALA 5.1 ) LD. CIT(A) HAS SAID THAT THE DIREC TIONS GIVEN TO BE STRICTLY FOLLOWED. LD. CIT(A) HAS ALSO CITED CIT VS. FUNDILAL RIKHABCH AND (1994) 208 ITR 348 (RAJ) . FINALLY THE LD. CIT(A) HAS MENTIONED THAT T HE QUESTION OF LEVY OF INTEREST HAS AGAIN BEEN CONSIDERED BY THE HONBLE SUPREME COURT IN THE CASE OF CIT V. INSILCO LTD. (2005) 278 ITR 1 (SC) AND REMANDED THE MATTER BACK TO HIGH COURT. ACCORDING LD. CIT ( A) PRESENTL Y THE A.O. WAS JUSTIFIED IN COMPUTING THE INTEREST U/S 234 B. NOW THE ASSESSEE IS FURTHER IN APPEAL BEFORE US. ITA NO.3436/AHD/2009 A.Y. 1997-98 SOFTOUGH HYGINE PRODUCTS (MKT) P. LTD. V. DCIT CIR-12 AHD PAGE 5 6. AS FAR AS WRITTEN SUBMISSIONS ARE CONCERNED, THE SAME HAS DULY BEEN CONSIDERED BY US. WE HAVE ALSO HEARD LD. AR, MR. ME HTA. SINCE AN ALTERNATE PLEA HAS ALREADY BEEN MADE TO PROCEED ON MERITS THE REFORE WE DEEM IT PROPER TO DISPOSE OFF THIS OLD APPEAL ACCORDINGLY, PENDING SINCE LONG AND NO USEFUL PURPOSE IS GOING TO BE SERVED FOR KEEPING THIS APPE AL PENDING ANY MORE. AT THE OUTSET, WE MAY LIKE TO PLACE ON RECORD THAT EVE N IF WE WILL PROCEED WITH THIS APPEAL NO PREJUDICE SHALL BE CAUSED TO THE ASSESSEE BECAUSE OF THE LANGUAGE OF U/S. 234B OF THE ACT. AS PER SUB-SECTION(4) OF S ECTION 234B WHERE AS A RESULT OF AN ORDER U/S 260A I.E. ORDER OF THE HONB LE HIGH COURT THE AMOUNT ON WHICH INTEREST WAS PAYABLE HAS BEEN INCREASED OR RE DUCED, AS THE CASE MAY BE, THE AMOUNT OF INTEREST BE AMENDED IN CONSEQUE NCE THEREOF WHICH IS PAYABLE UNDER SUB-SECTION (1) OR SUB-SECTION (3) OF SEC.234B. IN CASE WHERE THE INTEREST IN INCREASED , THE A.O. SHALL SERVE A NOTICE OF DEMAND . IN CASE WHERE THE INTEREST IS REDUCED, THE EXCESS INTEREST PAID SHALL BE REFUNDED. THEREFORE WE HEREBY CLARIFY THAT ON THE OCCASION I F THE ASSESSEE GETS RELIEF FROM THE HONBLE HIGH COURT A CONSEQUENTIAL RELIEF SHALL AUTOMATICALLY BE GRANTED TO THE ASSESSEE UNDER THE PROVISIONS OF SEC TION 234B(4)(I) & (III) OF THE ACT. RATHER, WE DEEM IT JUSTIFIABLE TO GIVE A D IRECTION IN THIS REGARD, THAT THIS PROVISIONS OF THE ACT SHOULD BE FOLLOWED WHILE GIVING THE EFFECT OF THE ORDER OF HONBLE HIGH COURT AT THE TIME OF PASSING A CON SEQUENTIAL ORDER. 6.1 ) IT HAS ALSO BEEN BROUGHT TO OUR NOTICE THAT A DECLARATION U/S 158A(1) ON FORM NO.8 HAS BEEN FILED BY THIS APPELLANT. CONS IDERING THIS DECLARATION WE HEREBY PROCEED AS PER SECTION 158A(4) WHICH PRESCRI BES THAT WHERE A CLAIM OF IDENTICAL QUESTION OF LAW IS PENDING IS ADMITTED TH EN THE APPELLATE AUTHORITY MAKE AN ORDER DISPOSING THE RELEVANT CASE, WITHOUT AWARDING THE FINAL DECISION ON THE QUESTION OF LAW IN OTHER CASE. HOWEVER, WE H AVE ALREADY NOTED VIDE SUB-SECTION (5) OF SECTION 158A WHEN THE DECISION O N THE QUESTION OF LAW IN OTHER CASE, BECOMES FINAL, THEN IT SHALL BE APPLIED TO THE RELEVANT CASE, AND THE ASSESSING OFFICER, AS THE CASE MAY BE, SHALL AM END THE ORDER REFERRED. ITA NO.3436/AHD/2009 A.Y. 1997-98 SOFTOUGH HYGINE PRODUCTS (MKT) P. LTD. V. DCIT CIR-12 AHD PAGE 6 7. AS FAR AS DECISION OF THE HONBLE DELHI HIGH COU RT PRONOUNCED IN THE CASE OF CIT V. INSILCO LTD. (2010) 190 TAXMAN 306 (DEL) IS CONCERNED IT WAS HELD THAT MERE NON-MENTIONING OF SECTION 234B IN TH E ASSESSMENT ORDER WOULD BE OF NO CONSEQUENCE. WHEN THE SAID ORDER OF THE HONBLE DELHI HIGH COURT HAD GONE FURTHER IN APPEAL BEFORE THE HONBLE APEX COURT , THEN THE GRIEVANCE OF THE APPELLANT WAS THAT THE HIGH COURT WHILE ADMITTING THE APPEAL IN RESPECT OF TWO ASSESSMENT YEARS U/S260A DIRECTED THAT ONLY THE APPEAL RELATING TO A.Y. 90-91 WOULD BE ADMITTED . AS FAR A S THE SECOND A.Y. 91-92 WAS CONCERNED, THE H.C.WAS OF THE VIEW THAT THE ISS UE HAS BEEN CORRECTLY DECIDED IN FAVOUR OF THE ASSESSEE BY THE TRIBUNAL R ELYING UPON THE DECISIONS OF THE PATNA HIGH COURT, AND THEREAFTER, BY THESE C OMMENTS THE MATTER WAS REMANDED BACK TO H.C. AFTER ADMITTING THE APPEAL FO R THE A.Y. 1991-92. WE ARE THEREFORE CONVINCED THAT IN THE ABSENCE OF ANY STAY GIVEN BY THE HONBLE JURISDICTIONAL HIGH COURT THE ASSESSING OFFICER HAS RIGHTLY PROCEEDED TO FOLLOW THE DIRECTIONS OF THE TRIBUNAL. LIKEWISE, THE LD. C IT(A) HAS JUDICIOUSLY AFFIRMED THE SAID ACTION OF THE AO. RESULTANTLY, GROUNDS RAI SED ARE HEREBY DISMISSED SUBJECT TO THE DIRECTIONS GIVEN HEREINABOVE. 8. IN THE RESULT, GROUNDS OF THE ASSESSEE ARE HEREBY D ISMISSED WITH THE DIRECTIONS MENTIONED SUPRA. 0 !/ * .% 1 2 24 /02/2012 '! 6 * 7, THIS ORDER PRONOUNCED IN OPEN COURT ON 24/ 2 . 012 . SD/- SD/- ( . ) ( ) ( !' ) ( ) ( A. MOHAN ALANKAMONY) (MUKUL KUMAR SHAWART) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) 1 2- 24/02/2012 DKP* ITA NO.3436/AHD/2009 A.Y. 1997-98 SOFTOUGH HYGINE PRODUCTS (MKT) P. LTD. V. DCIT CIR-12 AHD PAGE 7 !/ !/ !/ !/ * ** * (9 (9 (9 (9 :!9% :!9% :!9% :!9% / COPY OF ORDER FORWARDED TO:- 1. &' / APPELLANT 2. ()&' / RESPONDENT 3. < / CONCERNED CIT 4. <- / CIT (A) 5. 9?7 ( , , / DR, ITAT, AHMEDABAD 6. 7A$ B0 / GUARD FILE. BY ORDER/ !/ !, //TRUE COPY// C/ D ,