Gujarat Urja Vikas Nigam Ltd., Baroda V. The Dy.CIT.,Circle-1(1), Baroda

ITA 3857/AHD/2008

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 0208 (ITAT-AHMEDABAD)
• Duration Of Justice: 11 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 24-09-2009
• Assessment Year: 2006-2007
• Appeal Filed On: 26-11-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHELLEY JINDAL
• Assessee Lawyers: J P SHAH
• Keywords: Bonafide belief; Question of law; Set aside
• Section: 143(3); 234B; 115JB; 143(1); 264; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C AHMEDABAD BENCH C AHMEDABAD BENCH C AHMEDABAD BENCH C BEFORE BEFORE BEFORE BEFORE SHRI SHRI SHRI SHRI T.K.SHARMA T.K.SHARMA T.K.SHARMA T.K.SHARMA, JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER AND AND AND AND SHRI N.S. SAINI, ACCOUNTANT MEMBER SHRI N.S. SAINI, ACCOUNTANT MEMBER SHRI N.S. SAINI, ACCOUNTANT MEMBER SHRI N.S. SAINI, ACCOUNTANT MEMBER DATE OF HEARING:24.09.09 DRAFTED ON:25.09.09 ITA NO.3857/AHD/2008 ASSESSMENT YEAR : 2006-07 GUJARAT URJA VIKAS NIGAM LTD. SARDAR PATEL VIDHYUT BHAVAN, RACE COURSE CIRCLE, BARODA. VS. DY. COMMISSIONER OF INCOME TAX, CIRCLE 1(1), BARODA. PAN/GIR NO. : AACCG 2861L (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI J.P.SHAH RESPONDENT BY: SHRI SHELLEY JINDAL D. R. O R D E R O R D E R O R D E R O R D E R PER N.S.SAINI , ACCOUNTANT MEMBER :- THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD.CIT(APPEALS)-I, BARODA, DATED 1.09.2008. ITA NO3 857/AHD/2008. M/S.GUJARAT URJA VIKAS NIGAM LTD. ASST.YEAR -2006-07 - 2 - 2. THE SOLE GROUND OF APPEAL TAKEN BY THE ASSESSEE IN THIS APPEAL READS AS UNDER:- THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) ER RED IN LAW AND ON FACTS HAS CONFIRMED THE CHARGING OF INTEREST AGGREGATING TO RS.1,00,21,608/- UNDER SECTION 234B AND 234C OF THE INCOME TAX ACT, 1961 ON THE ADVANCE TAX PAID BY THE APPELLANT ON THE BOOK PR OFITS COMPUTED UNDER SECTION 115JB OF THE I.T. ACT, 1961. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE, IT IS NOT IN DISPUTE THAT THE ASSESSEE COMPANY IS LIABL E TO PAY TAX UNDER SECTION 115JB ON THE BASIS OF THE BOOK PROFIT COMPUTED UNDER THAT SECTION. THE LEARNED ASSESSING OFFICER CHARGED INTEREST UNDER SECTION 234B AND 234C OF THE ACT IN RESPECT OF SUCH TAX LIABILITY IN THE PROCESSING MADE UNDER SECTION 143(1) OF THE ACT AND HAS NOT MADE THE ASSESSMENT UNDER SECTION 143(3) OF THE ACT. THE DISPUTE BEFORE US IS THAT WHETHER INTEREST UNDER SECTION 234B AND 234C COULD HAVE BEEN CHARGED IN INTIMATION PASSED UNDER SECTION 143(1) ON 23.12.2007 IN RESPECT OF TAX PAYABLE UNDER SECTION 115JB OF THE ACT. THE ACTION OF THE LEARNED ASSESSING OFFICER WAS CONFIRMED BY THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS). BEFORE US THE ITA NO3 857/AHD/2008. M/S.GUJARAT URJA VIKAS NIGAM LTD. ASST.YEAR -2006-07 - 3 - LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE DRAWN OUR ATTENTION TO THE DECISION OF THIS TRIBUNAL IN THE CASE OF GUJARAT ALKALIES & CHEMICALS LTD. VS. DY.CIT, BARODA IN ITA NO.1361/AHD/2005 WHEREIN VIDE ORDER DATED 30.12.2005 ON EXACTLY THE SAME ISSUE WHICH IS BEFORE US, THE TRIBUNAL HELD AS UNDER: IN ADDITION TO ABOVE, WE FIND FORCE IN THE SUBMISSION OF L D. AR THAT UNDER SECTION 143(1) THE ASSESSING OFFICER HAS LIMITED P OWER AND UNDER THAT SECTION AN INTIMATION SHALL BE SENT TO THE ASSES SEE SPECIFYING THE SUM SO PAYABLE ON THE BASIS OF THE RETURN FILED BY THE ASSESSEE. THE LEARNED ASSESSING OFFICER IS NOT EMPOWERE D TO MAKE ANY ADJUSTMENT WHICH IS CONTROVERSIAL ONE. FOR THAT PURPO SE THE ASSESSMENT IS REQUIRED TO BE MADE UNDER SECTION 143(3) . IN THE LIGHT OF ABOVE DISCUSSION AND IN VIEW OF THE JUDGMENT OF JURISD ICTIONAL HIGH COURT IN THE CASE OF SAYAJI IRON & ENGG. CO. VS. CIT 253 ITR 749 WHEREIN THE JURISDICTIONAL HIGH COURT HAS STATED IN THE CASE OF CIT VS. L.G. RAMAMURTHI AND OTHERS REPORTED IN 110 ITR 453 THAT N O TRIBUNAL OF FACT HAS ANY RIGHT OR JURISDICTION TO COME TO A CONCLU SION ENTIRELY CONTRARY TO THE ONE REACHED BY ANOTHER BENCH OF THE SAME TRIBUNAL ON THE SAME FACTS. THEREFORE, WE RESPECTFULLY FOLLOW THE ORDER O F ITAT (SUPRA) IN THE CASE OF VADILAL ENTERPRISES LTD. AND I N VIEW OF THAT THE ORDERS OF LOWER AUTHORITIES ARE SET ASIDE AND CLAIM OF TH E ASSESSEE IS ALLOWED. 4. THE LEARNED DEPARTMENTAL REPRESENTATIVE POINTED OUT THAT AGAINST THE ABOVE DECISION OF THE TRIBUNAL, APPEAL WAS FILED BY THE REVENUE BEFORE THE HON'BLE GUJARAT HIGH COURT WHICH IS PENDING FOR ITA NO3 857/AHD/2008. M/S.GUJARAT URJA VIKAS NIGAM LTD. ASST.YEAR -2006-07 - 4 - DISPOSAL. THE LEARNED DEPARTMENTAL REPRESENTATIVE ALSO ADMITTED THAT HON'BLE HIGH COURT HAS NOT YET SUSPENDED THE OPERATION OF THE AFORESAID ORDER OF THIS TRIBUNAL. THE ABOVE FACT ALSO SHOWS THAT THE ISSUE INVOLVES SUBSTANTIAL QUESTION OF LAW AND IS UNDER A BONAFIDE DEBATE. THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED UPON THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF ASHIMA SINTEX LTD. 310 ITR (AT)1, WHEREIN SPECIAL BENCH VIDE ORDER DATED 17.10.2008 HAS HELD THAT INTEREST UNDER SECTION 234B AND 234C ARE CHARGEABLE IN RESPECT OF TAX PAYABLE IN PURSUANCE TO PROVISIONS OF SECTION 115JA OF THE ACT. WE FIND THAT THE AFORESAID ORDER WAS PASSED BY THE SPECIAL BENCH ON 17.10.2008 AND THUS, IT IS EVIDENT THAT BEFORE THAT THERE WAS BONAFIDE DISPUTE OR DEBATE REGARDING CHARGE OF INTEREST IN RESPECT OF TAX PAYABLE ON BOOK PROFIT UNDER SECTION 115JA OF THE ACT. WE FIND THAT THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE CITED BEFORE US THE DECISION OF THE DELHI TRIBUNAL IN THE CASE OF DEPUTY COMMISSIONER OF INCOME TAX VS. SURYA ROSHNI LTD. (2006) 8 SOT 470 (DEL), WHEREIN IT WAS HELD THAT :- AO HAD NO JURISDICTION TO DETERMINE THE LIABILITY OF IN TEREST OTHERWISE THAN AS PER THE CLAIMS MADE BY THE ASSESSEE UNDER SECTI ON 143(1). IN THE PRESENT CASE, NOT ONLY THE PROVISIONS OF S.115JA CAME INTO PLAY ITA NO3 857/AHD/2008. M/S.GUJARAT URJA VIKAS NIGAM LTD. ASST.YEAR -2006-07 - 5 - BUT THE ASSESSEE HAD A BONAFIDE BELIEF THAT IT WAS NOT LIABLE TO PAY ANY INTEREST UNDER S. 234C. THEREFORE, WHILE PROCESSING THE RE TURN OF THE ASSESSEE UNDER SECTION 143(1), THE AO COULD NOT HAVE EN TERED INTO ANY INTERPRETATIVE EXERCISE WHILE COMPUTING THE TAX O R INTEREST PAYABLE ON THE BASIS OF THE INFORMATION EMANATING FROM RETURN SUB MITTED BY THE ASSESSEE, UNDER S. 143(1)(A). IT WAS INCUMBENT FOR THE LEAR NED ASSESSING OFFICER TO HAVE TAKEN RECOURSE TO S.143(2) AND REGULAR ASSESSMENT UNDER S.143(3) TO LEVY SUCH INTEREST. ACCORDI NGLY, THE LEARNED ASSESSING OFFICER SHOULD HAVE ENTERTAINED THE APPLICATION OF THE ASSESSEE UNDER SEC. 154 AND SHOULD HAVE DELETED THE INTEREST CIT VS. SMT. PREMLATA JALANI (2003) 185 CTR (RAJ.) 601; ( 2003) 264 ITR 744 (RAJ.) APPLIED. 5. IN VIEW OF THE ABOVE IN OUR CONSIDERED OPINION, NO ORDER UNDER SECTION 143(1) CAN BE PASSED IN RESPECT OF ANY DEBATABLE ISSUE AND IN OUR CONSIDERED OPINION ON 23.12.2007 WHEN THE IMPUGNED INTIMATION UNDER SECTION 143(1) WAS MADE BY THE LEARNED ASSESSING OFFICER, THERE WAS BONA FIDE DIFFERENCE IN THE OPINION THAT WHETHER INTEREST UNDER SECTION 234B AND 234C ARE CHARGEABLE IN RESPECT OF TAX PAYABLE UNDER SECTION 115JB OF THE ACT. THEREFORE, IN OUR CONSIDERED OPINION THE LEARNED ASSESSING OFFICER WAS NOT JUSTIFIED IN LEVYING INTEREST UNDER SECTION 234B AND 234C IN A PROCESSING MADE UNDER SECTION 143(1) IN RESPECT OF TAX PAYABLE UNDER SECTION 115JB OF THE ACT AND THE LEARNED ITA NO3 857/AHD/2008. M/S.GUJARAT URJA VIKAS NIGAM LTD. ASST.YEAR -2006-07 - 6 - ASSESSING OFFICER OUGHT TO HAVE TAKEN RECOURSE OF PROVISIONS OF SECTION 143(3) BY PASSING A REGULAR ASSESSMENT ORDER FOR LEVY OF SUCH INTEREST. 6. BEFORE PARTING WITH THIS ORDER, WE WOULD LIKE TO OBSERVE THAT THE LEARNED DEPARTMENTAL REPRESENTATIVE DURING THE COURSE OF THE HEARING BEFORE US RELIED UPON THE DECISION OF THE DELHI BENCH OF THE TRIBUNAL IN THE CASE OF JOINT COMMISSIONER OF INCOME TAX VS. MOHAN EXPORT INDIA LTD. [2006] 101 ITD 478 (DELHI), WHEREIN IT WAS HELD THAT THE CHARGING OF INTEREST UNDER SECTION 143(1) DOES NOT TANTAMOUNT TO MAKING OF PRIMA FACIE ADJUSTMENT. WE AGREE WITH THE ABOVE PROPOSITION THAT CHARGING OF INTEREST IN AN INTIMATION PASSED UNDER SECTION 143(1) DOES NOT TANTAMOUNT TO MAKING OF ANY PRIMA FACIE ADJUSTMENT WITH THE INCOME OR LOSS DISCLOSED BY THE ASSESSEE IN THE RETURN OF INCOME. HOWEVER, IN THE INSTANT CASE, THE ISSUE IS WHETHER ANY LEVY WHICH IS DEBATABLE IN NATURE CAN BE LEVIED IN AN INTIMATION PASSED UNDER SECTION 143(1) OR NOT. IN OUR VIEW, AS INTIMATION UNDER SECTION 143(1) IS PASSED WITHOUT ALLOWING ANY OPPORTUNITY OF HEARING TO THE ASSESSEE ANY LEVY IN SUCH INTIMATION WHICH ARE OF DEBATABLE NATURE IS NOT SUSTAINABLE AND IF THE LEARNED ASSESSING OFFICER IS OF THE OPINION THAT SUCH LEVY IS TO BE IMPOSED THEN ITA NO3 857/AHD/2008. M/S.GUJARAT URJA VIKAS NIGAM LTD. ASST.YEAR -2006-07 - 7 - HE SHOULD TAKE RECOURSE TO THE PROVISION OF REGULAR ASSESSMENT AND ALLOW PROPER OPPORTUNITY OF HEARING TO THE ASSESSEE BEFORE MAKING SUCH LEVY. WE THEREFORE, SET ASIDE THE ORDERS OF THE LOWER AUTHORITIES AND ALLOW THE GROUND OF APPEAL OF THE ASSESSEE. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER SIGNED, DATED AND PRONOUNCED IN THE COURT ON 30/10/2009. SD/- SD/- ( T.K. SHARMA ) ( T.K. SHARMA ) ( T.K. SHARMA ) ( T.K. SHARMA ) ( N.S. SAINI ) ( N.S. SAINI ) ( N.S. SAINI ) ( N.S. SAINI ) JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER AC ACAC ACCOUNTANT MEMBER COUNTANT MEMBER COUNTANT MEMBER COUNTANT MEMBER AHMEDABAD; DATED 30/10/2009 PARAS # COPY OF THE ORDER FORWARDED TO COPY OF THE ORDER FORWARDED TO COPY OF THE ORDER FORWARDED TO COPY OF THE ORDER FORWARDED TO : :: : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS)-I, BARODA. 5. THE DR, AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT.REGISTRAR), ITAT, AHMEDABAD