SAMOSARAN YARNS P.LTD, MUMBAI V. ASST CIT 1(3)(1), MUMBAI

ITA 3849/MUM/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0775 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2004-2005
• Appeal Filed On: 06-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR YADAV
• Assessee Lawyers: D B SANGHVI

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A, MUMBAI BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI RAM LAL NEGI , JUDICIAL MEMBER ITA NO. 3849/MUM/2016 : A.Y : 2014 - 15 M/S. SAMOSARAN YARNS PVT. LTD., 41/42, 2 ND FLOOR, LIBERTY BUILDING, SIR VITHALDAS THAKERSEY MARG, NEW MARINE LINES, MUMBAI 28 PAN : AAJCS6707Q (APPELLANT) VS. ACIT - 1(3)(1), MUMBAI (RESPONDENT) APPELLANT BY : SHRI D.B. SANGHVI RESPONDENT BY : SHRI RAJESH KUMAR YADAV DATE OF HEARING : 26/10/2017 DATE OF PRONOUNCEMENT : 19 /01/2018 O R D E R PER G.S. PANNU , AM : THE CAPTIONED APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF CIT(A) - 3 , MUMBAI DATED 29.04.2016 , PERTAINING TO THE ASSESSMENT YEAR 2014 - 15 , WHICH IN TURN HAS ARI SEN FROM THE ORDER PASSED BY THE ASSESSING OFFICER, MUMBAI DATED 14.07.2015 UNDER SECTION 143(1) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2. IN THIS APPEAL, THE ONLY ISSUE RAISED BY THE ASSESSEE IS THE AMOUNT OF INTEREST CHARGED U/S 234A OF THE A CT. 2 ITA NO. 3849/MUM/2016 M/S. SAMOSARAN YARNS PVT. LTD. 3. IN BRIEF, THE RELEVANT FACTS ARE THAT ASSESSEE IS A COMPANY INCORPORATED UNDER THE PROVISIONS OF THE COMPANIES ACT, 1956 AND IS, INTER - ALIA , ENGAGED IN THE BUSINESS OF TRADING AND MANUFACTURE OF YARN. FOR THE ASSESSMENT YEAR UNDER CONSIDERATION, IT FILED ITS RETURN OF INCOME ON 31.03.2015 DECLARING AN INCOME OF RS.4,71,51,221/ - , AS AGAINST THE DUE DATE OF FILING OF RETURN ON 30.11.2014. IN THE INTIMATION U/S 143(1) OF THE ACT, THE ASSESSING OFFICER, INTER - ALIA , LEVIED INTEREST U/S 234A OF THE ACT OF RS.5,28,420/ - . AGAINST SUCH A LEVY, THE GRIEVANCE OF THE ASSESSEE IS THAT WHILE COMPUTING THE INTEREST CHARGEABLE, THE ASSESSING OFFICER HAS NOT GIVEN CREDIT FOR THE SELF - ASSESSMENT TAX OF RS.1,51,28,080/ - AND RS.3,44,870/ - PAID ON 31.01.2015 AND 31.0 3.2015 RESPECTIVELY. IN OTHER WORDS, AS PER THE ASSESSEE, THE ASSESSING OFFICER HAS WRONGLY CHARGED INTEREST U/S 234A OF THE ACT FOR THE PERIOD 01.12.2014 TO 31.03.2015 ON THE TOTAL AMOUNT OF SELF - ASSESSMENT TAX PAID WHEREAS THE ASSESSEE SHOULD BE HELD LI ABLE FOR PAYMENT OF INTEREST U/S 234A OF THE ACT ONLY FOR THE PERIOD COMMENCING 01. 12.2014 TILL DATE OF PAYMENT OF SELF - ASSESSMENT TAX. THE CIT(A) HAS DISMISSED THE CONTENTION OF THE ASSESSEE PRIMARILY RELYING ON THE JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. ANJUM M.H. GHASWALA 252 ITR 1 (SC) TO CONTEND THAT THE LEVY OF INTEREST U/S 234A OF THE ACT IS MANDATORY IN NATURE. 4. BEFORE US, SIMILAR PLEAS HAVE BEEN ADVANCED BY THE ASSESSEE, AND IN SUPPORT OF HIS PROPOSITION , THE LEARNED REPRE SENTATIVE RELIED UPON THE FOLLOWING DECISIONS : - I) B.R. MACHINE TOOLS PVT. LTD. VS. ACIT, ITA NO. 4178/MUM/2013 DATED 16.04.2014 (ITAT - MUMBAI); 3 ITA NO. 3849/MUM/2016 M/S. SAMOSARAN YARNS PVT. LTD. II) SACHIN JAIN VS. DCIT, ITA NO. 2523/DEL/2008 DATED 12.03.2010 (ITAT DELHI); III) EPARI SADASIVA RAO (HUF) VS. ACIT, ITA NO. 323/CTK/2010 DATED 21.04.2011 (ITAT CUTTACK) ; IV) JYOTIBEN MUKUNDBHAI RANA VS ITO, ITA NO. 2476/AHD/2015 DATED 01.04.2016 (ITAT AHMEDABAD). 5. ON THE OTHER HAND, THE LD. DR APPEARING FOR THE REVENUE HAS RELIED UPON THE ORDERS OF TH E AUTHORITIES BELOW AND CONTENDED THAT THE INTEREST HAS BEEN CORRECTLY CHARGED BY THE LOWER AUTHORITIES U/S 234A OF THE ACT UPTO THE DATE OF FILING OF THE RETURN OF INCOME . 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS. IT IS A QUITE WELL - SETTLED PROPOSITION THAT INTEREST CHARGEABLE U/S 234A OF THE ACT FOR DELAY IN FILING OF RETURN OF INCOME IS COMPENSATORY IN NATURE INASMUCH AS IT IS TO COMPENSATE THE DEPARTMENT FOR THE DELAY IN PAYMENT OF SELF - ASSESSMENT TAX WHICH IS PAYABLE PRIOR TO THE FILING OF THE RETURN. IT IS IN THIS LIGHT THAT THE CUTTACK BENCH OF THE TRIBUNAL IN THE CASE OF EPARI SADASIVA RAO (HUF) (SUPRA) , BY REFERRING TO THE JUDGMENT OF HON'BLE DELHI HIGH COURT IN THE CASE OF DR. PRANNOY ROY VS. CIT, 254 ITR 755 (DELHI) (WHICH HAS SINC E BEEN APPROVED BY THE HON'BLE SUPREME COURT IN 309 ITR 231 (SC) ) OBSERVED THAT THE INTEREST ENVISAGED U/S 234A OF THE ACT WAS NOT INTENDED TO BE A PENALTY OR PUNISHMENT FOR DELAY IN SUBMISSION OF RETURN, BUT WAS COMPENSATORY IN NATURE AS THE REVENUE WAS D EPRIVED OF TIMELY PAYMENT OF SELF - ASSESSMENT TAX. THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF B.R. MACHINE TOOLS PVT. LTD. (SUPRA) ALSO NOTED THAT WHILE CALCULATING THE INTEREST CHARGEABLE U/S 234A OF THE ACT, THE ASSESSED TAX IS LIABLE TO BE REDUCED BY THE AMOUNT OF TAX PAID BEFORE FILING THE RETURN OF INCOME. SIMILAR PROPOSITION HAS ALSO BEEN 4 ITA NO. 3849/MUM/2016 M/S. SAMOSARAN YARNS PVT. LTD. AFFIRMED BY THE DELHI BENCH OF THE TRIBUNAL IN THE CASE OF SACHIN JAIN (SUPRA) . FOLLOWING THE AFORESAID PRECEDENTS, IN OUR VIEW, IT WOULD BE IN THE FITNESS OF THINGS THAT THE INTEREST COMPUTED BY THE ASSESSING OFFICER IN THE INSTANT CASE IS RECOMPUTED. ACCORDINGLY, WE SET - ASIDE THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO RECOMPUTE THE INTEREST CHARGEABLE U/S 234A OF THE ACT IN THE LIGHT OF THE AFORESAID PROPOSITION. THUS, ON THIS ASPECT, ASSESSEE SUCCEEDS IN - PRINCIPLE. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 1 9 T H JANUARY, 2018. SD/ - SD/ - (RAM LAL NEGI) JUDICIAL MEMBER (G.S. PANNU) ACCOUNTANT MEMBER MUMBAI, DATE : 1 9 T H JANUARY, 2018 *SSL* COPY TO : 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT(A) CONCERNED 4) THE CIT CONCERNED 5) THE D.R, A BENCH, MUMBAI 6) GUARD FILE BY ORDER DY./ASSTT. REGISTRAR I.T.A.T, MUMBAI