ACIT, New Delhi V. Sh. Sunil Kumar, New Delhi

ITA 4109/DEL/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 58422 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 3 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-01-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 04-01-2012
• Assessment Year: 2009-2010
• Appeal Filed On: 06-09-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R S NEGI
• Assessee Lawyers: SANJAY KUMARC A
• Keywords: Rectification of order
• Section: 154; 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G NEW DELHI. BEFORE SHRI A.D. JAIN AND SHRI K.G. BANSAL I.T.A. NO. 4109(DEL)/2010 ASSESSMENT YEAR: 2009-10 ASSISTANT COMMISSIONER OF SHRI SUNIL KUMAR, INCOME-TAX, CENTRAL CIRCLE-23, VS. 265, DE EPALI ENCLAVE, NEW DELHI. PITAMPURA, NEW DELHI. PAN: AJBPK2569A (APPLICANT) (RESPONDENT) APPLICANT BY : SHRI R.S. NEGI, D.R. RESPONDENT BY: SHR I SANJAY KUMAR,C.A. DATE OF HEARIN G: 04.01.2012 DATE OF PRONOUN CEMENT: 04.01.2012. ORDER PER K.G. BANSAL : A.M THE FACTS OF THE CASE ARE THAT THE RETURN FILED BY THE ASSESSEE WAS PROCESSED U/S 143(1) ON 02.08.2009. WHILE DOING SO CREDIT FOR PRE-PAID TAXES OF RS. 4,76,834/- WAS GRANTED, INTEREST OF R S. 2,78,575/- WAS CHARGED U/S 234A AND INTEREST OF RS. 2,06,144/- WAS CHARG ED U/S 234C OF THE ACT. IN SO FAR AS INTEREST U/S 234A IS CONCERNED, IT WAS CHARGED FROM 01.04.2009 TO 02.08.2009. THE ASSESSEE MOVED AN APPLICATION U/S 154 SUBMITTING THAT EXCESS INTEREST HAS BEEN CHARGED UNDER SECTIONS 234B AND 234C. THEREFORE, ORDER U/S 154 WAS PASSED ON 0 6.11.2009. IN THIS ORDER, ITA4109DEL)/2010 2 APART FROM CREDIT OF RS. 4,76,834/- GRANTED EA RLIER, CREDIT OF RS. 60,56,196/- WAS GRANTED ON ACCOUNT OF SELF-ASSESS MENT TAX PAID BY THE ASSESSEE. INTEREST OF RS. 3,34,290/- WAS CHARGED U/S 234B AND INTEREST OF RS. 1,15,124/- WAS CHARGED U/S 234C. THE AFORESA ID ORDER WAS CHALLENGED BEFORE THE CIT(APPEALS)-III, NEW DELHI. 2. IT WAS SUBMITTED THAT TAX PAYABLE ON THE RET URNED INCOME AMOUNTS TO RS. 60,49,080/-. AFTER GIVING CREDIT FOR TAX DEDUCTED AT SOURCE OF RS. 4,76,834/-, THE LIABILITY COMES DOWN TO RS. 55,7 2,246/-. THE CASH OF RS. 90.00 LAKH SEIZED FROM THE ASSESSEE IN THE COURSE OF SEARCH CONDUCTED ON 19.01.2009 SHOULD HAVE BEEN USED PARTLY FOR THE PURPOSE OF SATISFACTION OF THE AFORESAID DEMAND ON THE BASIS OF WRITTEN REPRESENTATION IN THE MATTER. THIS WAS NOT DONE IN THE ORIGINAL ORDER. IN THE ORDER OF RECTIFICATION, THE CREDIT WAS GRANTED, HOWEVER, TH E LIABILITY OF INTEREST U/S 234B WAS INCREASED ALTHOUGH THE LIABILITY OF INTER EST U/S 234C WAS REDUCED. THE LD. CIT(APPEALS) CONSIDERED THE FACTS OF TH E CASE AND SUBMISSIONS MADE BEFORE HIM. IT IS MENTIONED THAT THE SEARCH W AS CONDUCTED ON 19.01.2009 RESULTING IN SEIZURE OF CASH OF RS. 90 .00 LAKH. THE ASSESSEE SUBMITTED A LETTER TO THE ADDITIONAL DIRECTOR OF INCOME-TAX (INV.) ON 12.03.2009 REQUESTING FOR ADJUSTMENT OF THE SEI ZED CASH TOWARDS TAX ITA4109DEL)/2010 3 LIABILITY OF THE ASSESSEE AND HIS ASSOCIATES. T HE RETURN FOR THIS YEAR WAS FILED ON 27.04.2009, IN WHICH IT WAS INDICATED T HAT THE SEIZED CASH MAY BE APPROPRIATED TOWARDS THE TAX LIABILITY. THE AO DID NOT GIVE ANY CREDIT IN RESPECT OF SEIZED CASH WHILE PROCESSING THE RETURN . HOWEVER, IN THE RECTIFICATION ORDER, HE ALLOWED THE CREDIT AS IF I T HAS BEEN PAID IN THE MONTH OF SEPTEMBER, 2009. INTEREST UNDER THE AFORESAID PROVISION WAS CHARGED ACCORDINGLY. HE REFERRED TO THE DECISION OF HON BLE DELHI HIGH COURT IN THE CASE OF CIT VS. K.K. MARKETING, (2005) 278 ITR 596. IT HAS BEEN HELD THAT THE AO SHOULD HAVE APPROPRIATED A PART OF THE SEIZED CASH TOWARDS ADVANCE-TAX PAYABLE BY THE ASSESSEE ON TH E DATE ON WHICH SUCH REQUEST WAS MADE AND RE-COMPUTE THE INTEREST A CCORDINGLY. 3. AGGRIEVED BY THIS ORDER, THE REVENUE IS IN APPEA L BEFORE US. THE ONLY SUBSTANTIVE GROUND TAKEN BEFORE US IS THAT THE LD. CIT(APPEALS) ERRED ON FACTS AND IN LAW IN DIRECTING THE AO TO RE-COMPUTE INTEREST UNDER SECTIONS 234B AND 234C BY ADJUSTING A PART OF THE SEIZED CASH TOWARDS ADVANCE-TAX LIABILITY ON 12.03.2009. 4. BEFORE US, THE LD. DR RELIES ON THE ORDER OF TH E AO, WHILE THE LD. COUNSEL FOR THE ASSESSEE SUPPORTS THE IMPUGNED O RDER ON THE BASIS OF ITA4109DEL)/2010 4 DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF K.K. MARKETING (SUPRA). 5. WE HAVE CONSIDERED THE FACTS OF THE CASE AND S UBMISSIONS MADE BEFORE US. THE FACTS HAVE ALREADY BEEN SUMMARIZ ED BY US. THE LIMITED QUESTION BEFORE US IS-WHETHER, THE ASSESSING OFFI CER OUGHT TO HAVE ADJUSTED THE SEIZED CASH AGAINST THE ADVANCE-TA X LIABILITY ON THE DATE WHEN THE ASSESSEE MADE A REQUEST IN THIS BEHALF? THE FACTS IN THE CASE OF K.K. MARKETING (SUPRA) ARE THAT CONSEQUENT UPON A SEARCH, AN ORDER U/S 132(5) WAS PASSED ON 16.12.1993. THE ASSESSMENTS WERE COMPLETED ON 28.11.1994. WHILE PROCESSING THE RETURN, IT WAS H ELD THAT THE ASSESSEE WAS ENTITLED TO A REFUND OF RS. 48,78,295/- AGAINST ADVANCE-TAX LIABILITY OF RS. 48,55,000/-. HOWEVER, INTEREST WAS CHARGED UNDE R BOTH THE SECTIONS 234B AND 234C. THE ASSESSEE MOVED A RECTIFICATI ON APPLICATION WHICH WAS TURNED DOWN BY THE AO. THE CIT(APPEALS) HELD THAT INTEREST COULD BE CHARGED ONLY UP TO THE DATE OF PROVISIONAL ORDER PASSED U/S 132(5). THE TRIBUNAL NOTED THAT THE ASSESSEE HAD MADE A REQUE ST FOR ADJUSTMENT OF SEIZED CASH BEFORE THE DATE ON WHICH ADVANCE-TAX BECAME DUE. ON DOING SO, THE ASSESSEE WAS ENTITLED TO REFUND OF A SM ALL AMOUNT. IT WAS HELD THAT ALTHOUGH THE QUESTION OF CHARGING OF INTER EST IS HIGHLY DEBATABLE, IT ITA4109DEL)/2010 5 WOULD NOT BE APPROPRIATE TO CHARGE INTEREST FROM T HE ASSESSEE. THIS ORDER WAS CHALLENGED BEFORE THE HONBLE HIGH COURT. IT WAS NOTED THAT THE REQUEST FOR ADJUSTMENT OF SEIZED CASH TOWARDS AD VANCE-TAX LIABILITY WAS MADE BY THE ASSESSEE BEFORE SUCH LIABILITY BECAME DUE. THEREFORE, IT IS NOT A CASE WHERE THE ASSESSEE WAS SHIRKING THE LIAB ILITY TO PAY ADVANCE-TAX. IN THE CIRCUMSTANCES, IT WAS HELD THAT THERE WAS NO ERROR OF LAW IN THE ORDER OF THE TRIBUNAL IN ACCEPTING THE CONTENTION URGED BY THE ASSESSEE. A MENTION WAS MADE THAT WHILE TAX LAWS AND EQUITY D O NOT ALWAYS GO HAND IN HAND BUT IN THE PRESENT CASE, SINCE THERE IS NO THING TO PROHIBIT THE ASSESSEE FROM MAKING A REQUEST FOR ADJUSTMENT OF CASH, EQUITY DEMANDS THE CASH OUGHT TO HAVE BEEN ADJUSTED AS PRAYED BY THE AS SESSEE. 5.1 WHEN WE LOOK TO THE FACTS OF THIS CASE, WE FIND THAT THEY ARE IN PARI-MATERIA WITH THE FACTS OF THE CASE OF K.K . MARKETING (SUPRA). THE SEARCH WAS CONDUCTED ON 19.01.2009 IN WHICH CASH AMOUNTING TO RS. 90.00 LAKH WAS SEIZED. THE ADVANCE-TAX PAYMENT THERE AFTER FELL DUE ON 15.03.2009. BEFORE THAT THE ASSESSEE WROTE A LE TTER TO THE ADDITIONAL DIRECTOR TO ADJUST THE CASH TOWARDS HIS LIABILITY AND THE LIABILITIES OF THE ASSOCIATES. HIS LIABILITY OF ADVANCE-TAX WAS L OWER THAN THE SEIZED CASH. AS THE FACTS OF THE TWO CASE ARE IN PARI-MATERI A AND THE DECISION IS THAT OF ITA4109DEL)/2010 6 JURISDICTIONAL HIGH COURT, WHICH HAS A BINDING PR ECEDENT, IT IS HELD THAT THE LD. CIT(A) WAS RIGHT IN DIRECTING THE AO TO ADJU ST THE CASH AGAINST ADVANCE-TAX LIABILITY ON 12.03.2009. 6. IN THE RESULT, THE APPEAL IS DISMISSED. SD/- SD/- (A.D. JAIN) (K.G. BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER SP SATIA COPY OF THE ORDER FORWARDED TO:- (I) SHRI SUNIL KUMAR, NEW DELHI. (II) ASSTT. CIT, CENTRAL CIRCLE-23, NEW DELHI. (III) CIT(A) (IV) CIT (V) THE D.R., ITAT, NEW DELHI. ASSISTANT REGISTRAR.