Siyaram Metals Pvt. Ltd., JAMNAGAR V. The Asstt. Commr. Income Tax, Cen.Cir.1, RAJKOT-GUJARAT

ITA 360/RJT/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 6681 (ITAT-RAJKOT)
• Duration Of Justice: 5 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-03-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 27-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice
• Section: 143(3); 153A; 234B; 147; 148; 144

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT [ CONDUCTED THROUGH E-COURT AT AHMEDABAD ] BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ./ I.T.A. NO.360/RJT/2016 ( / ASSESSMENT YEAR : 2007-08) SIYARAM METALS PVT.LTD. B-18, SHANKER-TEKRI UDYOGNAGAR, JAMNAGAR / VS. THE CIT(APPEALS)-XI AHMEDABAD ./ ./ PAN/GIR NO. AAECS 2779 P ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI SAGAR SHAH, AR ! / RESPONDENT BY : SHRI YOGESH PANDEY, CIT-DR ! & / DATE OF HEARING 20/03/2017 '( ! & / DATE OF PRONOUNCEMENT 14/03/2017 / O R D E R PER PRADIP KUMAR KEDIA, AM : THE CAPTIONED APPEAL BY THE ASSESSEE IS DIRECTED AG AINST THE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-11, AHMEDAB AD [CIT(A) IN SHORT] DATED 21/07/2016 FOR THE ASSESSMENT YEAR (AY) 2007-08. 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE READ AS UNDER:- 1. THE LEARNED COMMISSIONER OF INCOME TAX (A)-11, A HMEDABAD HAS ERRED IN LAW AS WELL AS ON FACTS IN NOT DEALING WIT H THE VARIOUS GROUNDS ITA NO. 360 /RJT/2016 SIYARAM METALS PVT.LTD. VS. CIT(A) ASST.YEAR 2007- 08 - 2 - OF APPEAL RAISED BY THE APPELLANT COMPANY AND HAS D EALT WITH ONLY ONE GROUND AND REST OF THE GROUNDS RAISED IN APPEAL HAS NOT BEEN DEALT WITH IN THE APPELLATE ORDER AND THUS THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX, APPEALS - 11, IS BAD IN LAW AS WELL AS ON FACTS. 2. THE LEARNED COMMISSIONER OF INCOME TAX, APPEALS -11, AHMEDABAD HAS ERRED IN LAW AS WELL AS ON FACTS TO APPRECIATE THE FACT THAT THE NOTICE OF DEMAND SERVED ON THE APPELLANT IS BAD IN LAW AS WELL AS ON FACTSAS SINCE THERE IS NO FRESH ADDITION IN THE ORDER PASSE D UNDER SECTION 153A R. W. S. 143(3) OF THE ACT DATED 28-02-2015 EVEN TH OUGH THE INTEREST LIABILITY HAS BEEN RAISED ON THE APPELLANT COMPANY. 3. THE LEARNED COMMISSIONER OF INCOME TAX (A)-11, A HMEDABAD HAS ERRED IN LAW AS WELL AS ON FACTS IN UPHOLDING THE W ORKING OF THE NOTICE OF DEMAND FOR THE YEAR UNDER CONSIDERATION BY THE ASST T. COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE - 1,RAJKOT. 4. THE LEARNED COMMISSIONER OF INCOME TAX (A)-11, A HMEDABAD HAS ERRED IN LAW AS WELL AS ON FACTS IN NOT TAKING INTO ACCOUNT THE GROUND RAISED REGARDING THE CALCULATION OF THE INTEREST UN DER SECTION 234A OF THE ACT BY THE APPELLANT WHILE DECIDING THE APPEAL OF THE APPELLANT COMPANY AND THUS THE ORDER PASSED BY THE LEARNED CO MMISSIONER OF INCOME TAX, A - 11 GROSSLY VIOLATE THE PRINCIPLES O F NATURAL JUSTICE. 5. THE LEARNED COMMISSIONER OF INCOME TAX (A)-11, A HMEDABAD HAS ERRED IN LAW AS WELL AS ON FACTS IN NOT CONSIDERING THE GROUND RAISED REGARDING THE CALCULATION OF THE INTEREST UNDER SEC TION 234 A & 234B OF THE ACT AND THE PERIOD FOR WHICH IT IS CHARGEABLE. 6. THE LEARNED COMMISSIONER OF INCOME TAX ( A ) - 1 1 HAS ERRED IN LAW AS WELL AS ON FACTS IN HOLDING THAT THE ASSESSMENT ORDER WHICH IS UNDER APPEAL HAS BEEN DETERMINED AT RS. 3,23,92,170/-. TH E LEARNED CIT(A) FAILED TO APPRECIATE THAT THE LAST INCOME DETERMINE D VIDE ORDER DATED 10-06-2010 HAS BEEN DETERMINED AS INCOME UNDER SECT ION 153A R.W.S. 143(3) OF THE ACT. ITA NO. 360 /RJT/2016 SIYARAM METALS PVT.LTD. VS. CIT(A) ASST.YEAR 2007- 08 - 3 - 7. THE LEARNED COMMISSIONER OF INCOME TAX (A)-11, A HMEDABAD HAS ERRED IN LAW AS WELL AS ON FACTS WHILE NOT TAKING I NTO CONSIDERATION THE CALCULATION OF INTEREST UNDER SECTION 234A AND 234B OF THE ACT AS THE TAX ALREADY DETERMINED IN EARLIER ASSESSMENT AND PA ID BY THE APPELLANT HAS NOT BEEN DEDUCTED FROM THE TAX LIABILITY FOR TH E CALCULATION OF THE INTEREST UNDER SECTION 234A AND 234B OF THE ACT. 8. THE LEARNED COMMISSIONER OF INCOME TAX(A)-11, AH MEDABAD HAS ERRED IN LAW IN NOT TAKING INTO ACCOUNT THE CALCULA TION OF INTEREST AND PERIOD FOR WHICH THE INTEREST IS PAYABLE BY THE APP ELLANT UNDER SECTION 234A AND 234 B OF THE ACT. 9. THE LEARNED ASSISTANT COMMISSIONER OF INCOME TAX , CENTRAL CIRCLE - 1, RAJKOT AND THE LEARNED COMMISSIONER OF INCOME TA X ( A ) - 11 HAS ERRED IN LAW AS WELL AS ON FACTS IN APPRECIATING TH E FACT THAT THERE IS NO FRESH ADDITION UNDER THE ORDER PASSED U/S. 153 A R. W.S. 143(3) THEN HOW THE INTEREST LIABILITY WHICH HAS ALREADY BEEN DETER MINED HAS CHANGED. 3. BRIEFLY STATED, THE ASSESSEE FILED ITS RETURN OF INCOME FOR AY 2007- 08 ON 19/10/2007 DECLARING A TOTAL INCOME OF RS.57, 68,700/- WHICH WAS PROCESSED UNDER S.143(1) OF THE INCOME TAX ACT, 196 1 (HEREINAFTER REFERRED TO AS 'THE ACT') WITHOUT ANY MODIFICATION. THEREAFTER, THE CASE WAS SELECTED FOR SCRUTINY AND THE ASSESSMENT UNDER S.143(3) OF THE ACT WAS COMPLETED ON 24/12/2009 DETERMINING THE TOTAL I NCOME AT RS.21,60,27,110/-. SUBSEQUENTLY, AFTER GIVING APPE AL EFFECT TO THE CIT(A)S DATED 10/06/2010, THE TOTAL INCOME WAS REV ISED AT RS.3,23,92,170/-. FURTHER RECTIFICATION WAS CARRIE D OUT UNDER S.154 OF THE ACT VIDE ORDER DATED 22/02/2013 WHEREIN THE TOTAL I NCOME WAS REMAINED UNCHANGED AT RS.3,23,92,170/- BUT INCOME-TAX DEMAND WAS REVISED DUE ITA NO. 360 /RJT/2016 SIYARAM METALS PVT.LTD. VS. CIT(A) ASST.YEAR 2007- 08 - 4 - TO REVISION OF INTEREST CHARGED UNDER S.234-B OF TH E ACT. MEANWHILE, SEARCH ACTION UNDER S.132 OF THE ACT WAS CARRIED OU T AT THE PREMISES OF THE ASSESSEE ON 23/08/2012. CONSEQUENT TO THE SEAR CH, PROCEEDINGS UNDER S.153A OF THE ACT WERE INITIATED BY ISSUING NOTICE DATED 09/05/2013. IN RESPONSE TO THE SAID NOTICE UNDER S.153A OF THE ACT , THE ASSESSEE FILED RETURN OF INCOME SHOWING TOTAL INCOME AT RS.57,68,6 97/-. THE ASSESSMENT UNDER S.153A R.W.S.143(3) OF THE ACT WAS FINALIZED VIDE ORDER DATED 28/02/2015 WHEREIN THE INCOME WAS ASSESSED AT THE SAME FIGURE AT RS.3,23,92,170/- AS PER REGULAR ASSESSMENT. THE AO HOWEVER SADDLED LIABILITY TOWARDS INTEREST UNDER S.234-A AND 234-B OF THE ACT ON THE ASSESSEE. IT IS THE CASE OF THE ASSESSEE THAT NO F RESH ADDITION HAS BEEN MADE IN THE ORDER PASSED UNDER S.153A OF THE ACT AN D THE INTEREST LIABILITY, IF ANY, ON THE EARLIER REGULAR ASSESSMEN T AS ARISING THEREON HAS ALSO BEEN DISCHARGED BY PAYMENT THEREOF. THEREFORE , ONCE THE INTEREST LIABILITY HAS BEEN CALCULATED IN THE REGULAR ASSESS MENT, THERE IS NO SCOPE OF EXTENDING SUCH LIABILITY AGAIN IN THE PROCEEDIN GS UNDER S.153A OF THE ACT WHEN THE TAXABLE INCOME HAS NOT BEEN DISTURBED AT ALL. 4. WITH THE ASSISTANCE OF THE LD.AR FOR THE ASSESSE E MR.SAGAR SHAH, WE HAVE PERUSED THE ORDERS OF THE AUTHORITIES BELOW REFERRED HEREINABOVE AS WELL AS PROVISIONS OF SECTION 234-A & 234-B OF T HE ACT. THE NARROW QUESTION THAT ARISES FOR OUR DETERMINATION IS WHETH ER INTEREST LIABILITY ON TAX UNDER S.234A & 234B CAN BE FASTENED ON THE ASSE SSEE ON THE INCOME ITA NO. 360 /RJT/2016 SIYARAM METALS PVT.LTD. VS. CIT(A) ASST.YEAR 2007- 08 - 5 - ALREADY ASSESSED IN THE COURSE OF REGULAR ASSESSMEN T IN THE GARB OF FRESH PROCEEDINGS UNDER S.153A OF THE ACT WHEN THE INCOME ASSESSED EARLIER REMAINS UNALTERED IN SECTION 153A PROCEEDINGS ALSO. 4.1. RELEVANT HERE TO NOTE TEXT OF SECTION 234A(3) WHICH READS AS UNDER:- 234A. (3) WHERE THE RETURN OF INCOME FOR ANY ASSE SSMENT YEAR, REQUIRED BY A NOTICE UNDER SECTION 148 [OR SECTION 153A ] ISSUED [AFTER THE DETERMINATION OF INCOME UNDER SUB-SECTION (1) OF SECTION 143 OR] AFTER THE COMPLETION OF AN ASSESSMENT UNDER SUB-SECTION (3) OF SECTION 143 OR SECTION 144 OR SECTION 147 , IS FURNISHED AFTER THE EXPIRY OF THE TIME ALLOWED UNDER SUCH NOTICE, OR IS NOT FURNISHED, THE ASSESSEE SHALL BE LIABLE TO PAY SIMPLE INTEREST AT THE RATE OF [ONE] PER CENT FOR EVERY MONTH OR PART OF A MONTH COMPRISED IN THE PERIOD COMMENCING ON TH E DAY IMMEDIATELY FOLLOWING THE EXPIRY OF THE TIME ALLOWED AS AFORESAID, AND, ( A ) WHERE THE RETURN IS FURNISHED AFTER THE EXPIRY OF T HE TIME AFORESAID, ENDING ON THE DATE OF FURNISHING THE RETURN; OR ( B ) WHERE NO RETURN HAS BEEN FURNISHED, ENDING ON THE DATE OF COMPLETION OF THE REASSESSMENT OR RECOMPUTATION UNDER SECTION 147 [OR REASSESSMENT UNDER SECTION 153A ], ON THE AMOUNT BY WHICH THE TAX ON THE TOTAL INCOME DETERMINED ON THE BASIS OF SUCH REASSESSMENT OR RECOMPUTATION EXCEEDS THE TAX ON TH E TOTAL INCOME DETERMINED [UNDER SUB-SECTION (1) OF SECTION 143 OR] ON THE BASIS OF THE EARLIER ASSESSMENT AFORESAID. [ UNDERLINE IS OURS ] 4.2. WE ALSO REPRODUCE HEREWITH A TEXT OF SECTION 2 34-B(3) OF THE ACT AS APPLICABLE AT RELEVANT TIME. 234B(3) WHERE, AS A RESULT OF AN ORDER OF REASSES SMENT OR RECOMPUTATION UNDER SECTION 147 [OR SECTION 153A], THE AMOUNT ON WHICH INTEREST WAS PAYABLE UNDER SUB-SECTION (1) I INCREASED, THE ASSE SSEE SHALL BE LIABLE TO PAY SIMPLE INTEREST AT THE RATE OF [ONE] PER CENT FOR E VERY MONTH OR PART OF A MONTH COMPRISED IN THE PERIOD COMMENCING ON THE DAY FOLLOWING [THE DATE OF DETERMINATION OF TOTAL INCOME UNDER SUB-SECTION (1) OF SECTION 143 [AND ITA NO. 360 /RJT/2016 SIYARAM METALS PVT.LTD. VS. CIT(A) ASST.YEAR 2007- 08 - 6 - WHERE A REGULAR ASSESSMENT IS MADE AS IS REFERRED T O IN SUB-SECTION (1) FOLLOWING THE DATE OF SUCH REGULAR ASSESSMENT] AND ENDING ON THE DATE OF THE REASSESSMENT OR RECOMPUTATION UNDER SECTION 147 [OR SECTION 153A], ON THE AMOUNT BY WHICH THE TAX ON THE TOTAL INCOME DETERM INED ON THE BASIS OF THE REASSESSMENT OR RECOMPUTATION EXCEEDS THE TAX ON TH E TOTAL INCOME DETERMINED [UNDER SUB-SECTION (1) OF SECTION 143 OR ] ON THE BASIS OF THE REGULAR ASSESSMENT AFORESAID. [ UNDERLINE IS OURS ] 5 . A BARE READING OF THE TEXT OF BOTH THE SECTIONS, SIMILARLY WORDED, AS UNDERLINED BY US FOR THE SAKE OF CONVENIENCE, UN RAVEL THAT THE LIABILITY TOWARDS INTEREST UNDER S.234-A & 234-B WOULD ARISE UNDER S.153A ONLY ON THE AMOUNT BY WHICH THE TAX ON TOTAL INCOME DETE RMINED UNDER S.153A EXCEEDS TAX AMOUNT ON TOTAL INCOME DETERMINE D IN ANY EARLIER ASSESSMENT. THEREFORE, IN OUR VIEW, THE FRESH LIA BILITY TOWARDS INTEREST UNDER S.234A & 234-B SHALL ARISE IN PURSUANCE OF OR DER UNDER S.153A OF THE ACT ONLY UPON INCREASE IN THE TOTAL INCOME DETE RMINED QUA THE EARLIER ASSESSMENT. THE EARLIER REGULAR ASSESSMENT IN THE INSTANT CASE SURVIVES AND DOES NOT STANDS ABATED. THE INTEREST LIABILITY ALREADY DETERMINED THEREON UNDER S.234-A & 234-B SURVIVES A ND IS AN ENFORCEABLE RECOVERY AS PER LAW. MERELY BECAUSE FR ESH ASSESSMENT HAS BEEN CARRIED OUT PURSUANT TO SEARCH, THE INTEREST L IABILITY ON THE ASSESSED INCOME EARLIER CANNOT RESURFACE ON THE SAME AMOUN T ALREADY ASSESSED EARLIER IN VIEW OF THE SCHEME OF THE ACT. RESULTAN TLY, IN OUR VIEW, LIABILITY TOWARDS INTEREST UNDER S.234-B & 234-C CO ULD NOT HAVE BEEN RAISED WITHOUT DISTURBING THE ASSESSED INCOME ASSES SED EARLIER. AS A ITA NO. 360 /RJT/2016 SIYARAM METALS PVT.LTD. VS. CIT(A) ASST.YEAR 2007- 08 - 7 - RESULT, WE ARE INCLINED TO AGREE WITH THE CASE OF T HE ASSESSEE SEEKING RELIEF TOWARDS INTEREST LIABILITY UNDER S.234A & 23 4-B OF THE ACT. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE COURT ON 14/03/20 17 AT AHMEDABAD. SD/- SD/- ( RAJPAL YADAV) ( PRADIP KUMAR KEDIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD ; DATED 14/03/2017 .., .,../ T.C. NAIR, SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. - & .& / CONCERNED CIT 4. .& ( ) / THE CIT(A)-11, AHMEDABAD 5. 234 ,&, , , /DR,ITAT, RAJKOT 6. 4?@ A / GUARD FILE. / BY ORDER, 2& ,& //TRUE COPY// / ( DY./ASSTT.REGISTRAR) %&, / ITAT, RAJKOT 1. DATE OF DICTATION .. 28.2.17 DICTATION-PAD 8- PA GES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER .. 01/03/2017 3. OTHER MEMBER... 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.14.3.17 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 14.3.17 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER