DDIT, New Delhi V. Oracle Corporation, Gurgaon

ITA 4618/DEL/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 65874 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-11-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 1997-1998
• Appeal Filed On: 29-08-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Rectification of order; Retrospective amendment
• Section: 153A; 263; 154; 139; 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : E : NEW DELHI BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER ITA NO.4618/DEL/2012 ASSESSMENT YEAR : 1997-98 DDIT, CIRCLE 2 (1), 4 TH FLOOR, DRUM SHAPED BUILDING, IP ESTATE, NEW DELHI. VS. ORACLE CORPORATION, C/O KPMG, BUILDING NO.10B, CYBER CITY, GURGAON. PAN : AAACO0207A (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI TARANDEEP SINGH, CA REVENUE BY : SHRI JASDEEP SINGH, SR.DR ORDER PER SHAMIM YAHYA, ACCOUNTANT MEMBER THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE OR DER OF THE LD. CIT (A) DATED 13.06.2012 AND PERTAINS TO ASSESSMENT YEAR 1997-98. THE GROUNDS OF APPEAL READ AS UNDER:- 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT (A) HAS ERRED IN RELYING UPON THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF DIT VS. JACABS CIVIL INCORPORATED IN HOLDING HAT THE PROVISIONS OF SECTION 234D WERE AP PLICABLE ONLY FROM ASSESSMENT YEAR 2004-05 ONWARDS AND NOT IN EARLIER ASSESSMENT YEARS BY IGNORING THAT THE SAID DECISION OF THE HONBLE HIGH COURT HAS NOT BEEN ACCEPTED BY THE DEPARTME NT AND AGAINST WHICH A SPECIAL LEAVE PETITION HAS BEEN FILED BEFORE THE APEX COURT. 2. WHETHER ON THE FATS AND CIRCUMSTANCES OF THE CASE, THE CI T (A) HAS ERRED IN DELETING THE INTEREST CHARGE U/S 234D IN THIS CASE BY HOLDING THAT THE PROVISIONS OF SECTION 234D WER E APPLICABLE ONLY FROM ASSESSMENT YEAR 2004-05 ONWARDS BY IGNORING THAT THESE PROVISIONS ARE APPLICABLE ON ANY P ROCEEDINGS ITA NO.4618/DEL/2012 2 COMPLETED ON OR AFTER 1 ST JUNE, 2003, IRRESPECTIVE OF ASSESSMENT YEAR TO WHICH IT PERTAINS AS CLARIFIED BY THE AMENDMENT BROUGHT IN BY THE FINANCE ACT, 2012. 2. IN THIS CASE, THE RETURN OF INCOME WAS FILED ON 27. 11.1997 AND A REFUND OF ` 50,84,825/- WAS ISSUED TO THE ASSESSEE VIDE INTIMATION DATED 23.01.1998. LATER ON, THE ASSESSMENT WAS MADE ON 23.06.2006 AT AN INCOME OF ` 41,29,12,171/- U/S 147 AND A DEMAND WAS CREATED. HOWEVER, INTEREST U/S 234D WAS CHARGED VIDE RECTIFICAT ION ORDER U/S 154. AGAINST THE ABOVE RECTIFICATION ORDER, THE ASSESS EE APPEALED BEFORE THE LD. CIT (A). THE ASSESSEE CONTENDED THAT SE CTION 234D HAS BEEN INTRODUCED BY THE FINANCE ACT, 2003 AND, THERE FORE, IT IS APPLICABLE FROM ASSESSMENT YEAR 2004-05 ONWARDS. THUS, IT WAS PLEADED THAT SECTION 234D DID NOT APPLY TO ASSESSMENT Y EAR UNDER CONSIDERATION. FOR THIS PROPOSITION, THE ASSESSEE PLACED RELIANCE UPON THE FOLLOWING CASE LAWS:- I) ITO VS. EKTA PROMOTERS PVT. LTD. 305 ITR 1 (SB); AND II) DIT VS. JACABS CIVIL INCORPORATED 235 CTR 123 (DEL). 3. CONSIDERING THE ABOVE, THE LD. CIT (A) HELD THAT SECTION 234D WAS NOT APPLICABLE FOR ASSESSMENT YEAR 1997-98 AND, HENC E, HE DIRECTED THE ASSESSING OFFICER TO DELETE THE INTEREST CH ARGED U/S 234D. AGAINST THE ABOVE ORDER, THE REVENUE IS IN APPEAL BE FORE US. 4. WE HAVE HEARD THE RIVAL CONTENTIONS IN THE LIGHT OF THE MATERIAL PRODUCED AND PRECEDENTS RELIED UPON. THE LD. DR SUBM ITTED THAT EXPLANATION 2 HAS BEEN INSERTED IN SECTION 234D WITH RETROSPECTIVE EFFECT FROM 01.06.2003. HENCE, HE PLEADED THAT THE SAID EXPLANATION CLEARLY PROVIDES THAT THE SECTION WILL BE APPLICABLE TO ALL ASSESSMENT YEARS COMMENCING BEFORE THE FIRST DAY JUNE, 2003 AND THE PROCEEDINGS IN RESPECT OF SUCH ASSESSMENT IS COMPLETED AFTER THE SAID D ATE. ITA NO.4618/DEL/2012 3 5. THE LD. COUNSEL OF THE ASSESSEE COULD NOT COGENTLY RE BUT THE SUBMISSIONS BUT PLACED RELIANCE UPON THE FOLLOWING CASE LAWS:- I) ASSTT. COMMISSIONER OF LT (OSD) VS. GTL LTD. (MA NO.746/MUM/2009); II) CIT VS. SUDHIR S. MEHTA 139 TAXMAN 54; AND III) GLAXOSMITHKLINE ASIA (P) LTD. VS. ACIT 97 TTJ (DEL) 1 08. 6. THE LD. DR SUBMITTED THAT ALL THE ABOVE CASE LAWS W ERE RENDERED PRIOR TO THE AMENDMENT IN SECTION 234D VIDE EXPLANA TION 2. HENCE, HE PLEADED THAT LD. CIT (A)S ORDER NEEDS TO BE REVERSED . THE LD. DR RELIED UPON THE FOLLOWING CASE LAWS:- I) CIT VS. KAMLA S. RANI 189 ITR 359 (BOM); AND II) GTC INDUSTRIES LTD. VS. DCIT 105 TTJ (MUM) (TM) 1010 . 7. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS. WE CAN GAINFULLY REFER TO THE PROVISIONS OF SECTION 234D HERE:- INTEREST ON EXCESS REFUND. INTEREST ON EXCESS REFUND. INTEREST ON EXCESS REFUND. INTEREST ON EXCESS REFUND. 234D. 234D. 234D. 234D. (1) SUBJECT TO THE OTHER PROVISIONS OF THIS ACT, W HERE ANY REFUND IS GRANTED TO THE ASSESSEE UNDER SUB-SECTION (1) OF SECTION 143 , AND ( A ) NO REFUND IS DUE ON REGULAR ASSESSMENT; OR ( B ) THE AMOUNT REFUNDED UNDER SUB-SECTION (1) OF SECTION 143 EXCEEDS THE AMOUNT REFUNDABLE ON REGULAR ASSESSMENT, THE ASSESSEE SHALL BE LIABLE TO PAY SIMPLE INTEREST AT THE RATE OF 6 [ONE-HALF] PER CENT ON THE WHOLE OR THE EXCESS AMOUNT SO REFUNDED, FOR EVERY MONTH OR PART OF A MONTH COMPRISED IN THE PERIOD FROM THE DATE OF GRA NT OF REFUND TO THE DATE OF SUCH REGULAR ASSESSMENT. ITA NO.4618/DEL/2012 4 (2) WHERE, AS A RESULT OF AN ORDER UNDER SECTION 154 OR SECTION 155 OR SECTION 250 OR SECTION 254 OR SECTION 260 OR SECTION 262 OR SECTION 263 OR SECTION 264 OR AN ORDER OF THE SETTLEMENT COMMISSION UNDER SUB-SECTION (4) OF SECTION 245D , THE AMOUNT OF REFUND GRANTED UNDER SUB-SECTION (1) OF SECTION 143 IS HELD TO BE CORRECTLY ALLOWED, EITHER IN WHOLE OR IN PART, AS THE CASE MAY BE, THEN, THE INTEREST CHARGEABLE, IF ANY, UNDER SUB-S ECTION (1) SHALL BE REDUCED ACCORDINGLY. EXPLANATION 1 . WHERE, IN RELATION TO AN ASSESSMENT YEAR, AN ASSESSMENT IS MADE FOR THE FIRST TIME UNDER SECTION 147 OR SECTION 153A , THE ASSESSMENT SO MADE SHALL BE REGARDED AS A REGULAR ASSESSMENT FOR THE PURPOSES OF THIS SECTION.] EXPLANATION 2. FOR THE REMOVAL OF DOUBTS, IT IS HEREBY DECLARED THAT THE PROVISIONS OF THIS SECTION SHALL ALSO APPLY TO A N ASSESSMENT YEAR COMMENCING BEFORE THE 1ST DAY OF JUNE, 2003 IF THE PROCEEDINGS IN RESPECT OF SUCH ASSESSMENT YEAR IS COMPLETED AFTER THE SAID DATE. 8. A READING OF THE ABOVE SECTION CLEARLY INDICATES THA T EXPLANATION 2 WAS ADDED BY FINANCE ACT, 2012 WITH RETROSPECTIVE E FFECT FROM 01.06.2003. BY THAT AMENDMENT, IT WAS CLEARLY BROUG HT ON THE STATUTE THAT THE SECTION SHALL ALSO APPLY TO AN ASSESSMENT YEAR C OMMENCING BEFORE THE FIRST DATE OF JUNE, 2003 IF THE PROCEEDIN GS IN RESPECT OF SUCH ASSESSMENT YEAR IS COMPLETED AFTER THE SAID DATE. IN TH IS REGARD, WE FIND THAT THE CASE LAWS RELIED UPON BY THE LD. DR ARE GERMANE. IN THE CASE OF CIT VS. KAMLA S. RANI 189 ITR 359 (BOM), HON BLE BOMBAY HIGH COURT HAS HELD THAT COURT CANNOT IGNORE RETROSPECTIVE AMENDMENT WHILE CONSIDERING APPLICATION U/S 256 (2) AND HAS TO E XERCISE A JURISDICTION IN THE LIGHT OF THE LAW AS IT IS DEEMED T O STAND ON THE DATE WHEN THE TRIBUNAL DECIDED THE APPEAL. IN THE CASE O F GTC INDUSTRIES LTD. VS. DCIT 105 TTJ (MUM) (TM) 1010, THE ITAT, T HIRD MEMBER BENCH HAD HELD THAT WHEN A LAW IS AMENDED WITH RETROSPECTIV E EFFECT, THE AUTHORITY WHEN HE DECIDES ANY PROCEEDINGS HAS TO APPLY SUCH RETROSPECTIVELY AMENDED LAW AS IT WERE ENFORCED AT AL L MATERIAL TIMES. ITA NO.4618/DEL/2012 5 9. CONSIDERING THE ABOVE CASE LAWS AND THE CLEAR PROVI SIONS OF THE SECOND EXPLANATION ADDED IN SECTION 234D, WE ARE OF THE OPINION THAT THE ORDER OF THE LD. CIT (A) IS TO BE REVERSED. ACCO RDINGLY, WE SET ASIDE THE ORDER OF THE LD. CIT (A) AND DECIDE THE ISSUE IN FAVOUR OF THE REVENUE. 10. IN THE RESULT, THE APPEAL FILED BY THE REVENUE ST ANDS ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 23.11.20 12. SD- SD- [RAJPAL YADAV] [SHAMIM YAHYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED, 23.11.2012. DK COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES