HINDUSTAN FIELD SERVICES P.LTD, NAVI MUMBAI V. DCIT CIR 1(1)(2), Mumbai

ITA 4472/MUM/2016

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 2519 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 11 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-06-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Assessment Year: 2012-2013
• Appeal Filed On: 28-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SATISH RAJORE
• Assessee Lawyers: GAUTAM R MOTA
• Keywords: Principle of natural justice; TDS
• Section: 143(3); 234B; 115JB; 148; 154; 139

Judgement Text

1 IN THE INCOME-TAX APPELLATE TRIBUNAL G BENCH MUMB AI BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND SHRI M. BALAGANESH, ACCOUNTANT MEMBER ITA NO. 2210/MUM/2019 (ASSESSMENT YEAR 2010-11 ) M/S GULICK NETWORK DISTRIBUTION PVT. L TD., FLAT NO.B/11, WEST VIEW, L.N. ROAD, DADAR (EAST), MUMBAI-400014 . PAN: AAACG8820B VS. ITO WARD-12(2)(3), AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400020 APPELLANT RESPONDE NT APPELLANT BY : SHRI GAUTAM R. MOTA (C.A) RESPONDENT BY : SHRI SATISH RAJORE (SR. DR) DATE OF HEARING : 10.06.2019 DATE OF PRONOUNCEMEN T : 21.06.2019 ORDER UNDER SECTION 254(1)OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER; 1. THIS APPEAL BY ASSESSEE IS DIRECTED AGAINST THE ORD ER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-20 [THE LD. CIT(A)], MUMBAI DA TED 25.02.2019 FOR ASSESSMENT YEAR 2010-11. THE ASSESSEE HAS RAISED T HE FOLLOWING GROUNDS OF APPEAL: 1. THE ORDER OF LD. CIT(A) IS BAD-IN-LAW. 2. THE ORDER OF LD. CIT(A) IS BAD-IN-LAW AND AGAINS T THE PRINCIPLE OF NATURAL JUSTICE. 3. THE LD. CIT(A) ERRED IN HOLDING THE EXCESS INTER EST LEVIED U/S 234A BY THE ASSESSING OFFICER WITHOUT APPRECIATING THAT INTERES T UNDER SECTION 234A COULD HAVE BEEN CHARGED ONLY TILL THE TIME TAX LIABILITY WAS OUTSTANDING. 4. THE LD. CIT(A) ERRED IN UPHOLDING THE LEVY OF EX CESS INTEREST UNDER SECTION 234B. ITA NO. 2210 MUM 2019-M/S GULICK NETW ORK DISTRIBUTION PVT. LTD. 2 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PRIVATE LIMITED COMPANY ENGAGED IN THE BUSINESS OF MULTI LEVEL MARKETING. N O RETURN OF INCOME WAS FILED BY THE ASSESSEE WITHIN THE TIME PRESCRIBED UN DER SECTION 139 OR 139(5). THE ASSESSING OFFICER RECEIVED INFORMATION IN INDIV IDUAL TRANSACTION STATEMENT (ITS) THAT ASSESSEE-COMPANY WAS IN RECEIP T OF CREDIT OF RS. 16,49,960/- AND THAT ASSESSEE FAILED TO DISCLOSE TH E SAID INCOME FOR RELEVANT ASSESSMENT YEAR. ON THE BASIS OF INFORMATION, THE A SSESSEES CASE WAS SELECTED FOR SCRUTINY AND CONSEQUENT UPON NOTICE UN DER SECTION 148 DATED 30.03.2017 WAS SERVED. IN RESPONSE TO THE NOTICE UN DER SECTION 148, THE ASSESSEE FILED ITS RETURN OF INCOME ON 23.06.2017. THE ASSESSEE FILED RETURN OF INCOME MANUALLY ON 07.05.2014 DECLARING TOTAL INCOM E OF RS. 16,49,960/- UNDER THE NORMAL PROVISION AND RS. 1,39,326/- UNDER SECTION 115JB AS PER MAT PROVISIONS. THE ASSESSMENT WAS COMPLETED ON 13. 10.2017 UNDER SECTION 143(3) R.W.S. 147 AND NO ADDITION WAS MADE IN THE ASSESSED INCOME.. THE ASSESSING OFFICER WHILE PASSING THE ASSESSMENT ORDER RAISED A DEMAND OF RS. 581470/- ON ACCOUNT OF INTEREST UNDER SECTION 2 34A AND 234B. THE ASSESSEE FILED AN APPLICATION UNDER SECTION 154 DAT ED 22.12.2017 FOR SEEKING RECTIFICATION OF WORKING OF THE INTEREST. THE ASSE SSING OFFICER PARTIALLY RECTIFIED THE MISTAKE VIDE ORDER DATED 09.01.2018. ON APPEAL BEFORE THE LD. CIT(A), THE ORDER OF ASSESSING OFFICER DATED 09.01. 2018 ON APPLICATION UNDER SECTION 154 WAS CONFIRMED. THE LD CIT(A) PASSED EX -PARTY ORDER. AGGRIEVED ITA NO. 2210 MUM 2019-M/S GULICK NETW ORK DISTRIBUTION PVT. LTD. 3 BY THE ORDER OF LD. CIT(A), THE ASSESSEE HAS FILED THE PRESENT APPEAL BEFORE THIS TRIBUNAL. 3. WE HAVE HEARD THE SUBMISSION OF LD. AUTHORIZED REPR ESENTATIVE (AR) OF THE ASSESSEE AND LD. DEPARTMENTAL REPRESENTATIVE (DR) F OR THE REVENUE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. AT THE OU TSET OF HEARING, THE LD. AR OF THE ASSESSEE SUBMITS THAT HE IS NOT PRESSING THE GROUND NO.1 & 2 OF THE APPEAL. CONSIDERING THE SUBMISSIONS OF ASSESSEE, TH E LD. AR OF THE ASSESSEE, THE GROUND NO.1 & 2 OF THE APPEAL ARE DISMISSED AS NOT PRESSED. 4. GROUND NO.3 RELATES TO LEVY OF INTEREST UNDER SECTI ON 234A. THE LD. AR OF THE ASSESSEE SUBMITS THAT DUE DATE OF FILING RETURN OF INCOME FOR RELEVANT ASSESSMENT YEAR WAS 15.10.2010. THE ASSESSEE HAS PA ID TAX ON 24.03.2014, THEREFORE, THE ASSESSEE WAS LIABLE TO PAY INTEREST FOR 42 MONTHS ONLY UNDER SECTION 234A. NO INTEREST UNDER SECTION 234A CAN BE LEVIED, IF THERE WAS NO OUTSTANDING TAX DUE. THE ASSESSING OFFICER CHARGED THE EXCESS INTEREST OF RS. 1,33,614/-, WHICH IS NOT IN ACCORDANCE WITH SECTION 234A. THE LD. AR OF THE ASSESSEE FURNISHED THE FOLLOWING COMPUTATION OF INT EREST UNDER SECTION 234A ALONG WITH THE COMPARISON OF CALCULATION/COMPUTATIO N MADE BY THE ASSESSING OFFICER IN THE FOLLOWING MANNER: AS PER ASSESSING OFFICER AS PER PROVISIONS OF LAW TOTAL TAX PAYABLE (A) 3,42,603 3,42,603 PERIOD 1 ST OCTOBER, 2010 TO 30 TH JUNE 2017 1 ST OCTOBER, 2010 TO 31 ST MARCH 2014 (B) 81 MONTHS 42 MONTHS RATE OF INTEREST 1% 1% INTEREST LEVIABLE (A*B*C) 2,77,508 1,43,893 ITA NO. 2210 MUM 2019-M/S GULICK NETW ORK DISTRIBUTION PVT. LTD. 4 5. THE LD. AR OF THE ASSESSEE FURTHER SUBMITS THAT IN SUBSEQUENT ASSESSMENT YEAR ON SIMILAR FACT, NO SUCH INTEREST WAS CHARGED FROM THE ASSESSEE. THE LD. AR OF THE ASSESSEE ALSO RELIED ON THE DECISION OF M UMBAI TRIBUNAL IN MS. PRITI PRITHWALA VS. ITO [2003] 129 TAXMAN 79(MUM). 6. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESENTAT IVE (DR) FOR THE REVENUE RELIED UPON THE ORDER OF LOWER AUTHORITIES. 7. WE HAVE CONSIDERED THE SUBMISSION OF BOTH THE PARTI ES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE HAVE NOTED THAT TH E ASSESSING OFFICER HAS COMPUTED THE INTEREST FROM 01.10.2010 TO 30.06.2017 I.E. FOR 81 MONTHS. THOUGH, THE ASSESSEE WAS LIABLE TO PAY INTEREST ONL Y TILL MARCH 2014 I.E. FOR 42 MONTHS ONLY. IN PRINCIPLE WE ARE IN AGREEMENT WI TH THE CALCULATION OF INTEREST FURNISHED BY THE ASSESSEE, WHICH WE HAVE R EFERRED IN PARA 4 ABOVE. . 8. WE HAVE FURTHER NOTED THAT THE LD. AR FOR THE ASSE SSEE SUBMITTED BEFORE US THAT ON SIMILAR SET OF FACTS NO SUCH INTEREST WAS C HARGED BY ASSESSING OFFICER FOR SUBSEQUENT ASSESSMENT YEAR. THIS FACT IS NOT DI SPUTED BY THE LD. DR FOR THE REVENUE. THE CO-ORDINATE BENCH OF TRIBUNAL IN PRITI PRITHWALA VS. ITO (SUPRA) ON SIMILAR GROUND OF APPEAL HELD THAT IN SECTION 23 4A, THE WORD REGULAR ASSESSMENT ARE USED IN THE CONTEXT OF COMPUTATION. IT DOES NOT SHOW THAT THE ORDER PASSED UNDER SECTION 143(3)/144 SHALL BE SUBS TITUTED BY SECTION 147. IN TERM OF SECTION 234A(1)(A)(B), THE PERIOD FOR WHICH INTEREST LIABILITY IS CALCULATED IS THE PERIOD BETWEEN THE DATE ON WHICH RETURN WAS DUE TO BE FILED AND THE ENDING ON THE DATE, THE SAME IS ACTUALLY FU RNISHED AND WHEN NO RETURN ITA NO. 2210 MUM 2019-M/S GULICK NETW ORK DISTRIBUTION PVT. LTD. 5 IS FURNISHED, ENDING ON THE COMPLETION OF ASSESSMEN T UNDER SECTION 144. SECTION 234A(1)(B) CONTEMPLATES THE SITUATION WHERE NO RETURN HAS BEEN FURNISHED, IN SUCH A CASE, THE PERIOD PRESCRIBED IS ENDING ON THE DATE OF COMPLETION OF THE ASSESSMENT. ONCE THE ASSESSEE CON CEDED HIS LIABILITY TO PAY INTEREST UNDER SECTION 234A, THERE WAS NO POINT IN GOING FURTHER INTO THE MATTER AND EXEMPTION WHETHER INTEREST WAS NOT LIABL E TO PAY. 9. THEREFORE, IN VIEW OF THE ABOVE FINDING OF CO-ORDIN ATE BENCH OF TRIBUNAL AND THE FACT THAT THE CONTENTION OF LD. AR OF THE ASSES SEE THAT ASSESSEE SUBMITS THAT THE ASSESSEE COULD NOT BE MADE LIABLE TO PAY I NTEREST FOR THE PERIOD DURING WHICH IT WAS NOT POSSIBLE ON THEIR PART TO FILE THE RETURN. THEREFORE, WE DIRECT THE ASSESSING OFFICER TO RE-COMPUTE THE INTEREST U P TO THE DATE OF FILING OF RETURN. HENCE, GROUND NO. 3 OF THE APPEAL IS ALLOWE D. 10. GROUND NO.4 RELATES TO INTEREST UNDER SECTION 234B. WE FIND THE INTEREST U/S 234B IS CHARGEABLE FROM THE FIRST DAY OF ASSESSMENT YEAR TILL THE DATE OF ASSESSMENT YEAR ON THE AMOUNT OF ASSESSED TAX DUE ( I.E. TAX PAYABLE TDS) FROM TIME TO TIME. WE DIRECT THE ASSESSING OFFICER TO COMPUTE THE INTEREST UNDER SECTION 234B AS UNDER:- FROM 1.4.2010 TILL MARCFH 2014 ON THE ASSESSED TAX DUE WHICH IS CONSIDERED AS X TAX PAYABLE TDS (+) X = Y THEN CALCULATE INTEREST FROM 1.4.2014 TILL THE DATE OF COMPLETION OF ASSESSMENT ON THE AMOUNT OF Y . 11. THEREFORE, WE DIRECT THE ASSESSING OFFICER TO REC OMPUTE THE INTEREST AS STATED ABOVE. ITA NO. 2210 MUM 2019-M/S GULICK NETW ORK DISTRIBUTION PVT. LTD. 6 12. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 21/06/2019. SD/- SD/- M. BALAGANESH, PAWAN SINGH ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATE: 21.06.2019 SK COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. DR G BENCH, ITAT, MUMBAI 6. GUARD FILE BY ORDER, DY./ASST. REGISTRAR ITAT, MUMBAI