M/s. Rajeswari Hospital, Palakkad V. ITo, Kannur

ITA 476/COCH/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 64923 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 5 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-11-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 1996-1997
• Appeal Filed On: 09-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUSAN GEORGE
• Assessee Lawyers: T M SREEDHARANSR

Judgement Text

1 ITA NO.476/COCH/2011 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.R.S. GANESAN (JM) AND SHRI B.R. BASKARA N(AM) I.T.A NO. 476/COCH/2011 (ASSESSMENT YEAR 1996-97) M/S RAJESWARI HOSPITAL VS THE ITO, WD.2(1) TALAP, KANNUR KANNUR PAN : NOT AVAILABLE (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI T.M. SREEDHARAN, SR COUNSEL RESPONDENT BY : SMT. SUSAN GEORGE DATE OF HEARING : 08-10-2012 DATE OF PRONOUNCEMENT : 16-11-2012 O R D E R PER N.R.S. GANESAN (JM) THIS APPEAL OF THE TAXPAYER IS DIRECTED AGAINST TH E ORDER OF COMMISSIONER OF INCOME-TAX(A)-II, KOZHIKODE DATED 18-03-2011 AND PERT AINS TO ASSESSMENT YEAR 1996-97. 2. SHRI T.M. SREEDHARAN, THE LD.SENIOR COUNSEL FOR THE TAXPAYER SUBMITTED THAT THE TAXPAYER IS CHALLENGING THE VERY LEVY OF I NTEREST U/S 220(2) OF THE ACT. ACCORDING TO THE LD.SENIOR COUNSEL, IN THE ORIGINAL ASSESSMENT NO INTEREST WAS LEVIED. HOWEVER, WHILE GIVING EFFECT TO THE ORDER OF THE INCOME-TAX APPELLATE TRIBUNAL, THE ASSESSING OFFICER LEVIED INTEREST U/S 220(2) OF THE ACT. THEREFORE, ACCORDING TO THE LD.SENIOR COUNSEL, WHEN THE INTERE ST WAS NOT LEVIED IN THE 2 ITA NO.476/COCH/2011 ASSESSMENT ORDER, IT CANNOT BE LEVIED WHILE GIVING EFFECT TO THE ORDER OF THIS TRIBUNAL. THE LD.SENIOR COUNSEL FURTHER SUBMITTED THAT WHEN THE TAXPAYER CONTEND THAT INTEREST IS NOT LEVIABLE AT ALL, THEN THE APPEAL IS MAINTAINABLE BEFORE COMMISSIONER OF INCOME-TAX(A). THEREFORE, THE COMMI SSIONER OF INCOME-TAX(A) IS NOT CORRECT IN REJECTING THE APPEAL ON THE GROUN D THAT THE APPEAL IS NOT MAINTAINABLE. 3. ON THE CONTRARY, SMT. SUSAN GEORGE, THE LD.DR SUB MITTED THAT THE INTEREST U/S 220(2) IS LEVIABLE ON THE FAILURE OF THE TAXPAY ER IN PAYING THE TAX DEMANDED WITHIN 30 DAYS FROM THE DATE OF SERVICE OF THE DEMA ND NOTICE ISSUED U/S 156 OF THE ACT. THEREFORE, THERE IS NO QUESTION OF ANY LE VY OF INTEREST IN THE ASSESSMENT ORDER. INTEREST CAN BE LEVIED ONLY IN CASE THE PAY MENT WAS NOT MADE WITHIN 30 DAYS FROM THE DATE OF SERVICE OF THE NOTICE OF DEMA ND. ADMITTEDLY, THE NOTICE OF DEMAND U/S 156 WAS SERVED ON THE TAXPAYER. HOWEVER , THE DEMAND WAS REVISED BY THE ORDER OF THE TRIBUNAL. THEREFORE, AS PER TH E ORDER OF INCOME-TAX APPELLATE TRIBUNAL, THE TAXPAYER IS LIABLE TO PAY INTEREST IN RESPECT OF THE TAX AMOUNT WHICH WAS NOT PAID WITHIN 30 DAYS FROM THE DATE OF SERVIC E OF DEMAND NOTICE ISSUED U/S 156 OF THE ACT ORIGINALLY. THEREFORE, IT IS NOT CO RRECT TO SAY THAT THE ASSESSING OFFICER LEVIED INTEREST FOR THE FIRST TIME WHILE GI VING EFFECT TO THE ORDER OF INCOME- TAX APPELLATE TRIBUNAL. ON A QUERY FROM THE BENCH, WHEN THE TAXPAYER IS CHALLENGING THE VERY LEVY OF INTEREST, WHETHER THE APPEAL IS MAINTAINABLE OR NOT? THE LD.DR SUBMITTED THAT IN THAT CASE, THE MATTER M AY BE RECONSIDERED BY THE COMMISSIONER OF INCOME-TAX(A). 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE COMMISSIONER OF INCOME-TAX(A) FOUND THAT THE APPEAL FILED BY THE TAXPAYER IS NOT MAINTAINABL E U/S 246A OF THE ACT. AS 3 ITA NO.476/COCH/2011 RIGHTLY SUBMITTED BY THE LD.SENIOR COUNSEL FOR THE TAXPAYER, WHEN THE TAXPAYER CHALLENGES THE VERY LEVY OF INTEREST, THE APPEAL IS MAINTAINABLE. HOWEVER, AS RIGHTLY SUBMITTED BY THE LD.DR INTEREST U/S 220(2) IS CHARGEABLE ONLY IN CASE THE TAXPAYER HAS NOT PAID THE DEMAND RAISED BY THE ASSE SSING OFFICER U/S 156 OF THE ACT. THEREFORE, THERE IS NO QUESTION OF CHARGING O F INTEREST AT THE ASSESSMENT STAGE, I.E. IN THE ASSESSMENT ORDER. THE CHARGING OF INTEREST IS A SUBSEQUENT EVENT AFTER PASSING OF THE ASSESSMENT ORDER AND ISS UE OF DEMAND NOTICE U/S 156 OF THE ACT. THEREFORE, THERE IS NO SUBSTANCE IN TH E CONTENTION OF THE LD.SENIOR COUNSEL THAT NO INTEREST WAS CHARGED IN THE ASSESSM ENT ORDER. AS RIGHTLY SUBMITTED BY THE LD.DR, THE INTEREST IS ALWAYS CHAR GEABLE FROM THE ORIGINAL DATE OF SERVICE OF DEMAND NOTICE U/S 156 IN RESPECT OF T HE TAX AMOUNT EVEN THOUGH THE ORDER OF ASSESSMENT IS MODIFIED IN THE APPELLAT E PROCEEDINGS. HOWEVER, THE OBSERVATION OF THE COMMISSIONER OF INCOME-TAX(A) THA T APPEAL WAS NOT MAINTAINABLE U/S 246A OF THE ACT MAY NOT BE CORRECT . IT IS FOR THE COMMISSIONER OF INCOME-TAX(A) TO CONSIDER THE CASE OF THE TAXPAYE R ON MERIT AND DECIDE THE SAME. IN VIEW OF THE ABOVE, THE ORDER OF THE COMMI SSIONER OF INCOME-TAX(A) IS SET ASIDE AND THE ISSUE IS REMITTED BACK TO HIS FILE . THE COMMISSIONER OF INCOME- TAX(A) SHALL RECONSIDER THE ISSUE AFRESH AND THEREA FTER DECIDE THE APPEAL IN ACCORDANCE WITH LAW AFTER GIVING REASONABLE OPPORTU NITY TO THE TAXPAYER. 5. WITH THE ABOVE OBSERVATIONS, THE APPEAL IS ALLOW ED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 16 TH NOVEMBER, 2012. SD/- SD/- (B.R. BASKARAN) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN, DT : 16 TH NOVEMBER, 2012 PK/- 4 ITA NO.476/COCH/2011 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE COMMISSIONER OF INCOME-TAX 4. THE COMMISSIONER OF INCOME-TAX(A) 5. THE DR (TRUE COPY) BY ORDER ASSTT. REGISTRAR, INCOME-TAX APPELLATE TRIBUNAL, COCHIN BENCH