J.Lalitha, Salem V. ACIT, Salem

ITA 375/CHNY/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 77302 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-05-2014
• Appeal Filed By: Assessee
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 17-02-2014
• Court: TRIBUNAL
• Department Lawyers: T N BETGERI
• Assessee Lawyers: S P RAMKUMAR
• Keywords: Condonation of delay
• Section: 234B

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHE NNAI . . . , ! , ' # $ BEFORE DR. O.K. NARAYANAN, VICE PRESIDENT & SHRI VIKAS AWASTHY, JUDICIAL MEMBER I.T.A. NO. ASSESSMENT YEAR !% APPELLANT &'!% RESPONDENT 373/MDS/2014 2011-12 SHRI M.J.SIVAKUMARAN, 35/64, ARTHANARI STREET, SHEVAPET, SALEM-636 002 [PAN: AUVPS 1240 D] COMMISSIONER OF INCOME TAX (APPEALS), SALEM 374/MDS/2014 2011-12 SHRI M.R.JAYAPAL, 35/64, ARTHANARI STREET, SHEVAPET, SALEM-636 002 [PAN: ADPPJ 8658 P] 375/MDS/2014 2011-12 J.LALITHA, 35/64, ARTHANARI STREET, SHEVAPET, SALEM-636 002 [PAN: AAQPL 8743 H] / APPELLANT BY : SHRI S.P.RAMKUMAR, CA., / RESPONDENT BY : SHRI T.N.BETGERI, JCIT / DATE OF HEARING : 30-04-2014 !' / DATE OF PRONOUNCEMENT : 23-05-2014 #( / O R D E R PER VIKAS AWASTHY, J.M: THE APPEALS HAVE BEEN FILED BY THE ASSESSEES AGAIN ST THE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-SA LEM, DATED ITA. NOS. 373, 374 & 375/MDS/2014 2 29-11-2013 RELEVANT TO THE ASSESSMENT YEAR (AY) 201 1-12 IN THEIR RESPECTIVE APPEALS. SINCE COMMON ISSUES ARE INVOLV ED IN ALL THE THREE APPEALS, THE APPEALS ARE TAKEN UP TOGETHER FO R ADJUDICATION. 2. THE APPEALS HAVE BEEN FILED WITH THE DELAY OF SE VEN DAYS. PETITION SEEKING CONDONATION OF DELAY IN FILING OF THE APPEALS CITING REASONS FOR DELAY IN FILING OF APPEALS HAVE BEEN FI LED. THE PETITIONS ARE SUPPORTED BY THE AFFIDAVITS OF RESPECTIVE ASSES SEES. AFTER PERUSAL OF SAME, WE ARE SATISFIED THAT THE DELAY IN FILING OF THE APPEALS HAVE BEEN SUFFICIENTLY EXPLAINED. THE DEL AY IN FILING OF THE APPEALS IS CONDONED. THE APPEALS ARE ADMITTED TO B E HEARD ON MERITS. 3. THE FACTS IN BRIEF AS APPLICABLE TO ALL THE THRE E APPEALS ARE AS UNDER. THE ASSESSEES ARE IN THE BUSINESS OF SILVER ORNAMENTS. A SEARCH U/S.132 OF THE INCOME TAX ACT, 1961 (HEREIN AFTER REFERRED TO AS THE ACT) WAS CONDUCTED ON 08-11-2010 AT THE COMMON PREMISES OF THE FOLLOWING FOUR PERSONS: I. SHRI M.J.SIVAKUMARAN II. SHRI M.R.JAYAPAL ITA. NOS. 373, 374 & 375/MDS/2014 3 III. SMT. J.LALITHA IV. SMT. S.USHA DURING THE COURSE OF SEARCH, CASH AMOUNTING TO ` 75,00,950/- WAS FOUND AND A SUM OF ` 74.00 LAKHS WAS SEIZED. APART FROM CASH, EXCESS STOCK OF 1043.427 KG. OF SILVER WAS FOUND. N OTICE U/S.153A/153C OF THE ACT WAS ISSUED TO THE FOLLOWIN G PERSONS: I. SHRI M.J.SIVAKUMARAN II. SHRI M.R.JAYAPAL III. SMT. J.LALITHA NO NOTICE WAS ISSUED TO SMT. S.USHA AS NO DOCUMENT PERTAINING TO HER WAS SEIZED. IN RESPONSE TO THE NOTICES, THE AS SESSEES FILED THEIR RESPECTIVE RETURN OF INCOME FOR AYS.2005-06 T O 2011-12. IN STATEMENT MADE U/S.132(4), THE ASSESSEES ADMITTED T HAT CASH SEIZED JOINTLY BELONG TO THEM AND IS UN-ACCOUNTED. THEY OFFERED THE SAME AS INCOME IN THE AY.2011-12. AS PER THE C ONTENTIONS OF THE ASSESSEE, A WRITTEN REQUEST WAS MADE TO THE ASS ESSING OFFICER ON 30-11-2010 TO ADJUST SEIZED AMOUNT LYING IN PD A /C AS ADVANCE TAX. EARLIER, ON 16-11-2010, THE ASSESSEES MADE A JOINT REQUEST TO DY.DIRECTOR (INVESTIGATIONS) TO ADJUST SEIZED CASH TOWARDS ADVANCE TAX. THE ASSESSING OFFICER WHILE COMPLETING ASSESS MENT FOR THE ITA. NOS. 373, 374 & 375/MDS/2014 4 AY.2011-12 WITHOUT CONSIDERING THE REQUEST OF ASSES SEE TO TREAT THE SEIZED AMOUNT AS ADVANCE TAX, LEVIED INTEREST U /S.234A, 234B & 234C. AGGRIEVED AGAINST THE ASSESSMENT ORDER, THE ASSESS EES PREFERRED APPEALS BEFORE THE CIT(APPEALS). THE CIT (APPEALS) HELD THAT THE ASSESSEE SHOULD HAVE MADE REQUEST BEF ORE THE CLOSE OF THE RELEVANT PREVIOUS YEAR I.E., 31-03-2011. AS PER THE REPORT OF THE ASSESSING OFFICER THE REQUEST WAS MADE ON 25-09 -2012 DURING THE COURSE OF PROCEEDINGS. THEREFORE, THE REQUEST OF ASSESSEES TO ADJUST SEIZED CASH TOWARDS ADVANCE TAX CANNOT BE AC CEPTED FOR THE AY.2011-12. AGGRIEVED BY THE ORDER OF CIT(APPEALS), THE ASSESS EES HAVE COME UP IN APPEAL IN THEIR RESPECTIVE CASE BEFORE T HE TRIBUNAL. 4. SHRI S.P.RAMKUMAR, APPEARING ON BEHALF OF THE AS SESSEES SUBMITTED THAT THE OBSERVATION OF THE CIT(APPEALS) THAT THE REQUEST WAS MADE ON 25-09-2012 TO ADJUST THE SEIZED CASH TO WARDS THE TAX LIABILITY IS WRONG. THE ASSESSEES JONTLY MADE REQUEST ON 16- 11-2010 BEFORE DY.DIRECTOR, INVESTIGATIONS, SALEM. THEREAFTER, ON ITA. NOS. 373, 374 & 375/MDS/2014 5 30-11-2010, THE ASSESSEES MADE REQUEST BEFORE THE A SSESSING OFFICER TO ADJUST THE SEIZED AMOUNT TOWARDS ADVANCE TAX. THESE REQUEST LETTERS WERE DULY ACKNOWLEDGED BY THE DEPAR TMENT. THE LD.AR FURTHER SUBMITTED THAT CIT(APPEALS) HAS ERRED IN HOLDING THAT THE SEIZED AMOUNT CANNOT BE APPROPRIATED TOWARDS AD VANCE TAX LIABILITY AS NO SUCH REQUEST WAS MADE BY THE ASSESS EE BEFORE THE CLOSE OF THE RELEVANT PREVIOUS YEAR. 5. ON THE OTHER HAND, SHRI T.N.BETGERI, APPEARING O N BEHALF OF THE REVENUE SUPPORTED THE ORDERS OF CIT(APPEALS) AN D PRAYED FOR DISMISSAL OF THE APPEALS OF THE ASSESSEES. 6. BOTH SIDES HEARD. ORDERS OF THE AUTHORITIES BEL OW PERUSED. IN APPEALS, THE ASSESSEES HAVE RAISED TWO ISSUES: I. DATE FROM WHICH SEIZED AMOUNT TO BE ADJUSTED; AND II. THE DATE OF APPLICATION MADE TO THE AUTHORITIES ON WHICH THE ASSESSEE HAD AUTHORIZED THE REVENUE TO ADJUST THE AMOUNT. ITA. NOS. 373, 374 & 375/MDS/2014 6 7. THE CO-ORDINATE BENCH OF THE TRIBUNAL IN ITA NOS.2223 TO 2229/MDS/2012 IN THE CASE OF S.DURAIPANDI & S.THALAVAIPANDIAN VS. ACIT DECIDED ON 20-03-2013 HAS CONSIDERED SIMILAR ISSUE. THE TRIBUNAL HELD THAT SEIZED AMOUNT SHALL BE TREAT ED AS ADVANCE TAX PAID PROVIDED THE ASSESSEE AUTHORIZES THE DEPAR TMENT TO APPROPRIATE THE SEIZED AMOUNT TOWARDS SUCH TAX LIAB ILITY. THE TRIBUNAL FURTHER OBSERVED THAT THE SEIZED AMOUNT SH ALL BE TREATED AS PAYMENT OF ADVANCE TAX ON THE DATE OF SEIZURE IT SELF. THE RELEVANT EXTRACT OF THE ORDER IS RE-PRODUCED HEREIN BELOW: 22. ACCORDINGLY, WE DIRECT THE ASSESSING AUTHORITY TO COMPUTE THE INTEREST, CHARGEABLE UNDER SEC.234B AFTER FIRST GIVING CREDIT TO THE AMOUNT OF ` 1.65 CRORES SEIZED ON 16.5.2007 AND ` 31 LAKHS PAID ON 17.8.2007. THE SEIZED AMOUNT SHALL BE TREATED AS ADVANCE TAX PAID ON 16.5.2007 ITSELF. THE SUM OF ` 31 LAKHS WILL BE TREATED AS ADVANCE TAX PAID ON 17.8.2007. T HE INTEREST SHALL BE REWORKED ON THE ABOVE LINES. 23. THE CONTENTION OF THE ASSESSEE REGARDING LEVY O F INTEREST UNDER SEC.234B IS THUS ACCEPTED. 24. ON THE SAME ANALOGY OF THE ABOVE DISCUSSION MAD E IN RESPECT OF SEC.234B, IT IS TO BE HELD THAT WHILE CO MPUTING INTEREST UNDER SEC.234A IT IS NECESSARY TO GIVE CRE DIT FOR THE ABOVE STATED TWO AMOUNTS PAID PRIOR TO THE COMPLETI ON OF THE ASSESSMENT. THIS PRINCIPLE HAS BEEN UPHELD BY THE H ONBLE SUPREME COURT IN THE CASE OF PRANOY ROY AND ANOTHER V. CIT (309 ITR 231). ITA. NOS. 373, 374 & 375/MDS/2014 7 25. THEREFORE, WHILE COMPUTING INTEREST BOTH UNDER SECTIONS 234A AND 234B, PREPAID AMOUNTS OF ` 1.65 CRORES AND ` 31 LAKHS NEED TO BE GIVEN CREDIT AND THE INTEREST CAN BE CALCULATED ONLY AFTER GIVING CREDIT TO THESE AMOUNT S AND REDUCING THE SAME FROM THE ADVANCE TAX LIABILITY AN D TAX LIABILITY RESPECTIVELY. IN VIEW OF THE ABOVE, IT IS HELD THAT THE ASSESSING OFFICER SHALL COMPUTE INTEREST CHARGEABLE U/S.234B AFTER GIVING C REDIT TO THE AMOUNTS SEIZED, IN THE PRESENT CASE ` 74.00 LAKHS ON 08-11-2010. THE SEIZED AMOUNT SHALL BE TREATED AS ADVANCE TAX P AID ON 08-11- 2010. 8. AS FAR AS THE CONTENTION OF THE ASSESSEE REGARDI NG DATE OF INTIMATION TO TREAT THE SEIZED AMOUNT AS ADVANCE TA X IS CONCERNED, THE ASSESSEE HAS PLACED ON RECORD COPIES OF THE COM MUNICATION DT.16-11-2010 AND 30-11-2010 ALONG WITH PHOTOCOPIES OF DEPARTMENT INWARD REGISTER. A PERUSAL OF SAME SHOW S THAT BOTH THE INTIMATIONS WERE RECEIVED IN THE OFFICE OF REVE NUE. WE REMIT THE FILE BACK TO THE ASSESSING OFFICER FOR LIMITED PURPOSE OF VERIFYING THE VERACITY OF INTIMATION AND ITS ACKNOW LEDGEMENT, BEFORE GRANTING THE AFORESAID RELIEF. IN CASE IT I S FOUND TO BE CORRECT, THE ASSESSING OFFICER WHILE COMPUTING INTE REST U/S.234A ITA. NOS. 373, 374 & 375/MDS/2014 8 AND 234B SHALL FIRST GIVE CREDIT OF THE AMOUNT SEIZ ED AS ADVANCE PAYMENT OF TAX FOR AY.2011-12. THE INTEREST U/S.23 4A AND 234B WILL BE CHARGED THEREAFTER. 9. THE APPEALS OF THE ASSESSEES ARE ALLOWED FOR STA TISTICAL PURPOSES. ORDER PRONOUNCED ON FRIDAY, THE 23RD MAY, 201 4 AT CHENNAI. SD/- SD/- ( . . . ) ( ! ) (DR. O.K. NARAYANAN) (VIKAS AWAS THY) #$% / VICE PRESIDENT & '( / JUDICIAL MEMBER )& /CHENNAI, *' /DATED: 23 RD MAY, 2014 TNMM '+ ,-.- /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. /01 /CIT(A) 4. / /CIT 5. -23 4 /DR 6. 356 /GF