INDER T. JAISINGHANI, MUMBAI V. ACIT CEN CIR 33, MUMBAI

ITA 4607/MUM/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 84625 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-12-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: I
• Next Hearing Date: 30-12-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 12-06-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KISHAN VYAS
• Assessee Lawyers: S ATISH CHANDAK
• Section: 143(3); 153A; 234B; 14A; 132

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES I MUMBAI . . , , ! BEFORE R.C.SHARMA, ACCOUNTANT MEMBER AND SHRI VIJAY PAL RAO, JUDICIAL MEMBER ITA NO.4607/MUM/2013 (A.Y.2009-10) INDER T. JAISINGHANI, 17/6, KHIARAM BHAVAN, RAFI AHMED KIDWAI ROAD, WADALA, MUMBAI 400002 (APPELLANT ) VS. THE ACIT, CENTRAL CIRCLE -33, MUMBAI. (RESPONDENT) APPELLANT BY : SHRI SATISH CH ANDAK RESPONDENT BY : SHRI KISHAN VYAS DATE OF HEARING : 30/12/2014 DATE OF PRONOUNCEMENT : 30 /12/2014 ORDER PER VIJAY PAL RAO, J.M: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST OR DER PASSED BY LD. CIT(A)-41, MUMBAI DATED 28/03/2013 FOR ASSESSMENT YEAR 2009-1 0. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: 1. ON THE FACTS CIRCUMSTANCES OF THE APPELLANTS C ASE AND IN LAW THE LD. CIT(A) ERRED IN DISMISSING THE APPEAL BY INVOKING THE PROVISIONS OF SECTION 249(4)9A) DESPITE THE FACT THAT THE TAX ON ADMITTED INCOME WAS PAID BEFORE THE DATE OF HEARING OF THE APPEAL. 2. ON THE FACTS AND CIRCUMSTANCES OF THE APPELLANT S CASE AND IN LAW THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION MADE BY THE LD. AO OF RS.8,01,138/- U/S. 14A R.W. RULE 8D OF THE INCOME TAX ACT, 1961. 2. GROUND NO.1 IS REGARDING DISMISSING THE APPEAL O F THE ASSESSEE BY INVOKING THE PROVISIONS OF SECTION 249(4) OF THE INCOME TAX ACT, 1961(THE ACT) FOR NON-PAYMENT OF ITA NO.4607/MUM/2013 (A.Y.2009-10) 2 ADMITTED TAX. THERE WAS A SEARCH ACTION UNDER SECT ION 132(1) OF THE ACT ON 15/09/2009 IN THE CASE OF POLYCAB GROUP OF COMPAN IES AND ASSESSEE ALSO COVERED UNDER THE SEARCH UNDER SECTION 132(1) OF THE ACT. IN RESPONSE TO NOTICE UNDER SECTION 153A OF THE ACT THE ASSESSEE HAS FILED ITS RETURN O F INCOME ON 18/02/2009 DECLARING TOTAL INCOME OF RS.3,73,41,400/-. THE ASSESSMENT W AS COMPLETED UNDER SECTION 143(3) R.W.S. 153A OF THE ACT ON 20/12/2011. THE A SSESSEE CHALLENGED THE ORDER OF THE A.O BEFORE LD. CIT(A) AGAINST THE DISALLOWANCE MADE UNDER SECTION 14A R.W. RULE 8D. LD. CIT(A) DISMISSED THE APPEAL OF THE ASSESSE E BY INVOKING THE PROVISIONS OF SECTION 249(4)(A) OF THE ACT FOR WANT OF PAYMENT OF SELF ASSESSED TAX. 3. BEFORE US LD. AR OF THE ASSESSEE HAS SUBMITTED T HAT IN THE RETURN OF INCOME THE ASSESSEE HAS CLAIMED THE ADJUSTMENT OF RS.99.00 LAC S BEING CASH SEIZED DURING THE SEARCH ACTION. HE HAS REFERRED THE COMPUTATION OF TOTAL INCOME AND SUBMITTED THAT THE ASSESSEE ITSELF HAS ADJUSTED THE SEIZED CASH L YING WITH THE DEPARTMENT AGAINST THE TAX ON SELF ASSESSMENT AND, THEREFORE, AS ON TH E DATE OF FILING THE RETURN OF INCOME THERE WAS NO OUTSTANDING TAX PAYABLE. LD. AR HA S POINTED OUT THAT THIS FACT OF ADJUSTMENT OF THE CASH SEIZED DURING THE SEARCH AC TION HAS BEEN ACCEPTED BY THE AO IN THE REMAND REPORT THOUGH ADJUSTMENT WAS SHOWN B Y THE AO ON THE SUBSEQUENT DATES AND, THEREFORE, THERE WAS ADDITIONAL TAX LIAB ILITY COMPUTED BY THE AO ON ACCOUNT OF INTEREST UNDER SECTION 234B AND 234C OF THE ACT. THE LD. CIT(A) HAS ASSUMED THE WRONG FACT AND TOOK THE PAYMENT OF TA X AS THE DATE ON WHICH THE AO MADE ADJUSTMENT OF THE CASH SEIZED AND LYING WITH T HE DEPARTMENT AGAINST THE DEMAND INSTEAD OF ACCEPTING THE REQUEST OF THE ASS ESSEE OF THE ADJUSTMENT IN THE RETURN OF INCOME ITSELF. THUS, LD. AR HAS SUBMITTE D THAT DISMISSING THE APPEAL OF THE ASSESSEE UNDER THE PROVISIONS OF SECTION 249(4) OF THE ACT BY LD. CIT(A) IS NOT JUSTIFIED. 4. LD. DR ON THE OTHER HAND HAS SUBMITTED THAT LD. CIT(A) HAS GIVEN THE DETAILS OF ADJUSTMENTS ON THE VARIOUS DATES AND FURTHER TH E BALANCE PAYMENT OF TAX OF RS.20,24,290/- WAS ON 6/10/2012, WHICH IS MUCH AFT ER THE DATE OF FILING THE APPEAL ITA NO.4607/MUM/2013 (A.Y.2009-10) 3 BEFORE LD. CIT(A), THEREFORE, THE ASSESSEE HAS FAIL ED TO COMPLY WITH THE MANDATORY CONDITION OF PAYMENT OF SELF ASSESSED TAX BEFORE TH E DUE DATE OF FILING OF THE APPEAL BEFORE LD. CIT(A) AS PER PROVISIONS OF SECTION 249 (4) OF THE IT ACT. HE HAS RELIED UPON THE ORDER OF LD. CIT(A) AS WELL AS THE DECISION OF HONBLE MADRAS HIGH COURT IN THE CASE OF S. ALAGARSWAMY VS. INCOME-TAX OFFICER 29 6 ITR 43(MAD). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WEL L AS RELEVANT MATERIAL ON RECORD. IN THE RETURN OF INCOME AND AS PER THE STA TEMENT OF COMPUTATION OF TOTAL INCOME THE ASSESSEE CLAIMED ADJUSTMENT OF THE CASH SEIZED AMOUNTING TO RS.99.00 LACS AGAINST THE SELF ASSESSED TAX. THE ASSESSEE H AS ALSO COMPUTED THE INTEREST UNDER SECTION 234B AND 234C AND ARRIVED AT THE TOTA L TAX PAYABLE OF RS.1,43,59,181/-. AFTER GIVING THE ADJUSTMENT OF R S.99.00 LACS THE BALANCE TAX WAS PAID BY THE ASSESSEE BEFORE FILING OF RETURN OF INC OME. THE AO DID NOT GIVE ADJUSTMENT OF THE CASH SEIZED AND LYING WITH THE DE PARTMENT OF RS.99.00 LACS AND RAISED A DEMAND OF RS.1,63,58,413/- INCLUSIVE OF IN TEREST UNDER SECTION 234B AND 234C AMOUNTING TO RS.35.00 LACS. THEREAFTER, THE A O HAS GIVEN THE ADJUSTMENT OF THE SAID AMOUNT OF RS.99.00 LACS IN THE MONTH OF FE B.2012 WHEREBY RESULTING A SHORTFALL OF PAYMENT OF TAX OF RS.20,24,290/- , WHI CH WAS PAID BY THE ASSESSEE ON 06/10/2012. BY CONSIDERING THESE FACTS OF SUBSEQUE NT ADJUSTMENT OF THE CASH SEIZED AND RESULTING OF ADDITIONAL TAX LIABILITY ON ACC OUNT OF THE INTEREST UNDER SECTION 234B AND 234C THE LD. CIT(A) HAS DISMISSED THE APPE AL OF THE ASSESSEE AS NOT MAINTAINABLE UNDER SECTION 249(4) OF THE ACT. IT IS PERTINENT TO NOTE THAT WHEN THE ASSESSEE CLAIMED AND REQUESTED THE ADJUSTMENT OF CA SH OF RS.99.00 LACS IN THE RETURN OF INCOME ITSELF, LYING WITH THE DEPARTMENT BEING SEIZED DURING THE SEARCH UNDER SECTION 132 OF THE ACT, THEN THE ASSESSEE CAN NOT BE HELD IN DEFAULT FOR PAYMENT OF SELF ASSESSED TAX. EVEN OTHERWISE IN TH E REMAND REPORT THE AO HAS ACCEPTED THE FACT OF CASH LYING WITH THE DEPARTM ENT AND IT WAS ADJUSTED AGAINST TAX DEMAND THOUGH ON A MUCH LATER DATE, THEREFORE, THE DELAY IN ADJUSTMENT CANNOT BE ATTRIBUTED TO THE ASSESSEE GIVING RISE TO FURTHER D EMAND OF TAX DUE TO INCREASE IN THE INTEREST LEVIED UNDER SECTION 234B AND 234C. ACCOR DINGLY, IN THE FACTS AND CIRCUMSTANCES OF THE CASE WE ARE OF THE VIEW THAT WHEN THE ASSESSEE CLAIMED THE ITA NO.4607/MUM/2013 (A.Y.2009-10) 4 ADJUSTMENT OF SEIZED CASH AGAINST THE SELF ASSESSE D TAX IN RETURN OF INCOME ITSELF AND FURTHER PAID THE TAX AS PER THE DEMAND OF THE A.O THEN THE DISMISSAL OF THE APPEAL BY LD. CIT(A) UNDER THE PROVISIONS OF SECTIO N 249(4) IS NOT JUSTIFIED. ACCORDINGLY, WE SET ASIDE THE IMPUGNED ORDER OF LD . CIT(A) AND RESTORE THE APPEAL OF THE ASSESSEE TO CIT(A) TO BE DECIDED ON MERITS. 6. GROUND NO.2 IS REGARDING DISALLOWANCE MADE UNDE R SECTION 14A OF THE ACT. IN VIEW OF OUR FINDING ON GROUND NO.1, GROUND NO.2 IS REMITTED BACK TO THE RECORD OF LD. CIT(A) FOR DECIDING THE SAME ON MERITS. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 30/12/2014 ' #$% & '() 30/12/2014 $ ' * ! SD/- SD/- ( . . /R.C.SHARMA ) ( /VIJAY PAL RAO ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; '( DATED 30/12/2014 ' '' ' +, +, +, +, -%, -%, -%, -%, / COPY OF THE ORDER FORWARDED TO : 1. ./ / THE APPELLANT 2. +0./ / THE RESPONDENT. 3. 1 ( ) / THE CIT(A)- 4. 1 / CIT 5. 2* +,( , , / DR, ITAT, MUMBAI 6. *3 4 / GUARD FILE. ( ( ( ( / BY ORDER, 0, +, //TRUE COPY// 5 55 5 / 6 6 6 6 (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI . ( . ./ VM , SR. PS