ACIT (TDS), Chandigarh V. M/s ICICI Bank Ltd., Chandigarh

ITA 355/CHANDI/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 77166 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-07-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 04-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHWIN SINGH
• Assessee Lawyers: RAV I MAHESHWARI
• Section: 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B, CHANDIGARH BEFORE SHRI T.R. SOOD, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITAS NO. 355 TO 362/CHD/2014 AYS : 2008-09 TO 2009-10 A.C.I.T. (TDS) V M/S I.C.I.C.I. BANK LTD CHANDIGARH REGIONAL PROCESSING CENTRE SCO 36, 2 ND FLOOR POCKET 1, NAC MANIMAJRA CHANDIGARH PTLI 1034 IC (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI ASHWIN SINGH RESPONDENT BY: SHRI RAV I MAHESHWARI DATE OF HEARING 24.6.2014 DATE OF PRONOUNCEMENT 9.7.2014 O R D E R PER T.R. SOOD, A.M THESE APPEALS ARE DIRECTED AGAINST THE ORDER DATED 29.1.2014 OF THE LD CIT(A), CHANDIGARH. 2. IN ALL THESE APPEALS THE REVENUE HAS RAISED THE FOLLOWING COMMON GROUNDS: 1 THOUGH THE LD. CIT(A), CHANDIGARH HAS OBSERVED T HAT INTEREST IS TO BE CHARGED FOR THE PERIOD FROM THE D ATE OF DEDUCTIBILITY OF TAX TILL THE DATE OF ITS ACTUAL PA YMENT BY THE DEDUCTEE IN VIEW OF THE JUDGMENT OF HON'BLE SUPREME COURT IN CASE OF M/S ELI LILLY & CO. (INDIA) (P) LTD., 178 T AXMAN 505, YET EFFECT TO THE ORDER OF THE LD. CIT(A), CHANDIGARH C ANNOT BE GIVEN DUE TO THE FOLLOWING REASONS: (I) THIS IS A CASE OF SYSTEM GENERATED DEMAND, THER E IS NO PROVISION FOR PASSING RECTIFICATORY ORDER U/S 154, AS PER INTENTION OF THE LD. CIT(A), CHANDIGARH. (II) BY FILING APPEAL INTEREST OF REVENUE WOULD STA ND PROTECTED. 3 AFTER HEARING BOTH THE PARTIES WE FIND THAT DUE T O SOME PROGRAMME ERROR THE ASSESSEEBANK HAD NOT DEDUCTED SURCHARGE ON INTEREST PAYMENT OF MORE THAT RS. 10 L AKHS BECAUSE OF WHICH SOME SHORT DEDUCTION WAS DETECTED. 2 HOWEVER, LATER ON THE ASSESSING OFFICER HIMSELF ACC EPTED THE PLEA OF THE ASSESSEE THAT IN VIEW OF THE JUDGMENT O F HON'BLE SUPREME COURT IN CASE OF HINDUSTAN COCA COLA BEVER AGE P. LTD V CIT, 293 ITR 226 (S.C), THE ASSESSEE COULD NO T BE CALLED IN DEFAULT BECAUSE THE DEDUCTEE HAD PAID FULL TAX. THEREFORE ONLY PAYMENT INTEREST U/S 201(1A) OF THE ACT WAS HE LD TO BE PAYABLE. THE DISPUTE AROSE REGARDING PERIOD FOR WH ICH SUCH INTEREST IS TO BE LEVIED. 4 WHEN THIS DISPUTE TRAVELED TO THE FIRST APPELLATE AUTHORITY, THE LD. CIT(A) HELD THAT INTEREST IS TO BE CHARGED FOR A PERIOD FROM THE DATE OF DEDUCTIBILITY OF TAX TILL THE DATE OF ITS ACTUAL PAYMENT BY THE DEDUCTEE IN VIEW OF THE DECISION OF HON'BLE SUPREME COURT IN CASE OF CIT V. M/S ELI LILLY & CO . (INDIA) (P) LTD. 312 ITR 225. NOW AGGRIEVED BY THIS ORDER THE R EVENUE IS IN APPEAL BEFORE US. 5 BEFORE US, THE LD. D.R. FOR THE REVENUE SUPPORTE D THE ORDER OF THE ASSESSING OFFICER. 6 ON THE OTHER HAND. THE LD. COUNSEL FOR THE ASSESS EE SUPPORTED THE IMPUGNED ORDER. 7 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFUL LY AND FIND FORCE IN THE SUBMISSIONS OF THE LD. COUNSEL FOR THE ASSESSEE. THE HON'BLE SUPREME COURT IN CASE OF CIT V. M/S EL I LILLY & CO. (INDIA) (P) LTD. (SUPRA) HELD AS UNDER: THE LEVY OF INTEREST U/S 201(1A) IS MANDATORY AND THE ABSENCE OF LIABILITY FOR TAX WILL NOT DILUTE THE DEFAULT. THE LIABILITY OF DEDUCTING TAX AT SOURCE IS IN THE NATURE OF A VICAR IOUS LIABILITY, WHICH PRESUPPOSES EXISTENCE OF PRIMARY LIABILITY. INTEREST U/S 201(1A) R.W.S 201(1) CAN ONLY BE LEVIED WHEN A PERS ON IS DECLARED AN ASSESSEE-IN-DEFAULT. THE PERIOD OF DEFAULT STARTS FROM THE DATE OF DEDUCTIBILITY TILL THE DATE OF ACTUAL PAYME NT. THE PAYMENT BY THE CONCERNED EMPLOYEE CAN BE TREATED AS THE DATE OF ACTUAL PAYMENT. THE ABOVE HIGHLIGHTED PORTION CLEARLY SHOW THAT THE INTEREST CAN BE CHARGED ONLY FOR A PERIOD FROM THE DATE OF D EDUCTIBILITY 3 TILL THE DATE OF PAYMENT OF SAID TAX HAS BEEN MADE BY THE DEDUCTEE. THEREFORE CLEARLY THE ORDER HAS BEEN PASS ED BY THE LD. CIT(A) ON THE BASIS OF LAW LAID DOWN BY HON'BL E SUPREME COURT AND THEREFORE WE CONFIRM HIS ORDER. 8 FROM THE PERUSAL OF THE GROUNDS OF APPEAL IT SEEM S THAT THE REVENUE IS NOT AGGRIEVED BY THE ORDER OF THE LD . CIT(A) IN THIS RESPECT BUT IS ONLY WONDERING HOW THE APPEAL E FFECT CAN BE GIVEN. SIMPLY BECAUSE THE DEMAND HAS BEEN GENERATED BY THE SYSTEM, CANNOT BE AN EXCUSE FOR NOT GIVING APPEAL E FFECT TO THE ORDERS OF THE APPELLATE AUTHORITIES. SUCH DEMAND CA N ALWAYS BE CANCELLED BY PASSING APPEAL EFFECT ORDER AND THE SO LUTION IS NOT FILING OF UN-NECESSARY APPEALS. 9. IN THE RESULT, ALL THE APPEALS OF THE REVENUE AR E DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 9.7.2014 SD/- SD/- (SUSHMA CHOWLA) (T.R. SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 9.7.2014 SURESH COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT/THE C IT(A)/THE DR