V.S. Lad & Sons, Sandur V. ACIT, Bangalore

ITA 487/BANG/2014

• Counselvise Citation: 48721114 RSA 2014
• Duration Of Justice: 9 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-01-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 07-01-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 10-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BIJOY KUMAR
• Assessee Lawyers: S RAMASUBRAMANIAN C A A
• Section: 143(3); 153A; 234B; 147; 148; 132; 144; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, JUDICIAL MEMBER AND SHRI JASON P. BOAZ, ACCOUNTANT MEMBER ITA NO.487/BANG/2014 ASSESSMENT YEAR : 2006-07 M/S. V.S. LAD & SONS, PRASANTH NIVAS, KRISHNA NAGAR, SANDUR 583 119. PAN: AACFV 3909R VS. THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE 2(3), BANGALORE. APPELLANT RESPONDENT APPELLANT BY : SHRI S. RAMASUBRAMANIAN, C.A.A RESPONDENT BY : SHRI BIJOY KUMAR PANDA, ADDL. CIT(DR) DATE OF HEARING : 07.01.2015 DATE OF PRONOUNCEMENT : 23.01.2015 O R D E R PER N.V. VASUDEVAN, JUDICIAL MEMBER THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORD ER DATED 5.2.2014 OF THE CIT(APPEALS)-VI , BANGALORE, RELATING TO ASS ESSMENT YEAR 2006-07. 2. THE ASSESSEE IS A PARTNERSHIP FIRM. CONSEQUEN T TO SEARCH CARRIED OUT U/S. 132 OF THE ACT, AN ORDER OF ASSESSMENT FOR THE A.Y. 2006-07 DATED ITA NO.487/BANG/2014 PAGE 2 OF 6 30.12.09 WAS PASSED U/S. 143(3) R.W.S. 153A OF THE ACT . THE AO AFTER CONCLUSION OF ASSESSMENT PROCEEDINGS ISSUED A NOTIC E U/S. 154 OF THE ACT DATED 21.1.2011. ACCORDING TO THE AO, THERE WAS A MISTAKE IN CALCULATION OF INTEREST U/S. 234A OF THE ACT, WHICH WAS AN APPA RENT MISTAKE ON THE RECORD AND THE SAME HAS TO BE RECTIFIED U/S. 154 OF THE ACT. THE AO PASSED AN ORDER DATED 14.3.2011 LEVYING INTEREST U/ S. 234A OF THE ACT AT RS.21,47,515. THE CALCULATION OF THE AO IN THIS RE GARD IS AS UNDER:- RS. RS. TOTAL ASSESSED INCOME AS PER ORDER U/S. 153A DATED 30.12.2009 95,20,08,254 TAX @ 30% 28,56,02,476 ADD: SURCHARGE @ 10% 2,85,60,248 TAX + SURCHARGE 31,41,62,724 ADD: EDUCATIONAL CESS @ 2% 62,83,254 TAX+SC+EC 32,04,45,978 LESS: TDS TCS ADVANCE TAX 21,05,167 9,65,054 21,00,00,000 21,30,70,221 BALANCE TAX PAYABLE 10,73,75,757 ADD: INTEREST U/S. 234A 234B 234C 21,47,515 93,01,023 57,86,859 1,72,35,397 TOTAL TAX & INTEREST PAYABLE 12,46,11,151 LESS: TAXES PAID ON VARIOUS DATES 11,61,96,709 BALANCE PAYABLE 84,14,442 3. AGGRIEVED, THE ASSESSEE FILED APPEAL BEFORE THE CIT(APPEALS). IT WAS POINTED OUT THAT THE ASSESSEE HAD FILED A REGUL AR RETURN OF INCOME U/S. 139(1) OF THE ACT FOR THE AY 2006-07 AND AS PER INT IMATION U/S. 143(1) OF THE ACT ISSUED ON SUCH RETURN, THE TOTAL TAX PAYABL E WAS RS.31,67,99,430. ITA NO.487/BANG/2014 PAGE 3 OF 6 THE ASSESSEE ALSO POINTED OUT THAT CONSEQUENT TO S EARCH U/S. 132 OF THE ACT, A NOTICE U/S. 153A OF THE ACT WAS ISSUED TO TH E ASSESSEE ON 25.6.2008 CALLING UPON IT TO FILE A RETURN OF INCOME ON 24.72 008. IN RESPONSE TO NOTICE U/S. 153A, THE ASSESSEE FILED THE RETURN OF INCOME ON 1.9.2008. THEREFORE THERE WAS A DELAY OF ONLY TWO MONTHS I.E., JULY & A UGUST FOR WHICH PERIOD INTEREST U/S. 234A COULD BE LEVIED. IT WAS FURTHER POINTED OUT THAT TAX PAYABLE WAS RS.32,04,45,978 ON THE TOTAL INCOME OF RS.95,20,08,254 DETERMINED IN THE ORDER U/S. 153A. THE ASSESSEE DR EW ATTENTION OF THE CIT(A) TO THE PROVISIONS OF SECTION 234A(3) OF THE ACT, WHICH PROVIDES THAT LEVY OF INTEREST IN CASES WHERE RETURN OF INCOME RE QUIRED TO BE FILED U/S. 153A OF THE ACT. THE SAID PROVISION READS AS FOLLO WS:- 234A (3) WHERE THE RETURN OF INCOME FOR ANY ASSE SSMENT YEAR, REQUIRED BY A NOTICE UNDER SECTION 148 [OR SECTION 153A] ISSUED [AFTER THE DETERMINATION OF INCOME UNDER SUB-SECTIO N (1) OF SECTION 143 OR] AFTER THE COMPLETION OF AN ASSESSME NT UNDER SUB- SECTION (3) OF SECTION 143 OR SECTION 144 OR SECTIO N 147, IS FURNISHED AFTER THE EXPIRY OF THE TIME ALLOWED UNDE R SUCH NOTICE, OR IS NOT FURNISHED, THE ASSESSEE SHALL BE LIABLE T O PAY SIMPLE INTEREST AT THE RATE OF [ONE] PER CENT FOR EVERY MO NTH OR PART OF A MONTH COMPRISED IN THE PERIOD COMMENCING ON THE DAY IMMEDIATELY FOLLOWING THE EXPIRY OF THE TIME ALLOWE D AS AFORESAID, AND, ( A ) WHERE THE RETURN IS FURNISHED AFTER THE EXPIRY OF THE TIME AFORESAID, ENDING ON THE DATE OF FURNISHING THE RET URN; OR ( B ) WHERE NO RETURN HAS BEEN FURNISHED, ENDING ON THE DATE OF COMPLETION OF THE REASSESSMENT OR RECOMPUTATION UND ER SECTION 147 [OR REASSESSMENT UNDER SECTION 153A], ON THE AMOUNT BY WHICH THE TAX ON THE TOTAL INCOME DETERMINED ON THE BASIS OF SUCH REASSESSMENT OR RECOMPUTATION EXCEEDS THE ITA NO.487/BANG/2014 PAGE 4 OF 6 TAX ON THE TOTAL INCOME DETERMINED [UNDER SUB-SECTI ON (1) OF SECTION 143 OR] ON THE BASIS OF THE EARLIER ASSESSM ENT AFORESAID. 4. IT WAS POINTED OUT THAT AS PER THE ABOVE PROVISI ONS, INTEREST IS PAYABLE @ 1% FOR EVERY MONTH OR PART OF MONTH, FOLL OWING THE EXPIRY OF TIME ALLOWED FOR FURNISHING RETURN IN A NOTICE U/S. 153A . THE AMOUNT ON WHICH INTEREST IS LEVIABLE IS ' THE AMOUNT BY WHICH THE TAX ON TOTAL INCOME DETERMINED ON THE BASIS OF ASSESSMENT U/S. 153A EXC EEDS THE TAX ON TOTAL INCOME DETERMINED U/S. 143(1) ON THE BASIS OF EARLIER ASSESSMENT.' THE ASSESSEE GAVE THE FOLLOWING CALCULATION OF INTE REST ON THE BASIS OF PROVISIONS OF SECTION 234A OF THE ACT: - CALCULATION OF INTEREST U/S. 234A (AS PER ASSESSEE) INCOME AS PER PARTICULARS ASSESSMENT ORDER U/S. 153A ORIGINAL RETURN U/S. 143(1) TOTAL INCOME 952,008,254 941,174,780 OR SAY 952,008,250 941,174,780 TAX ON THE ABOVE @ 30% 285,602,475 282,352,433 ADD: SURCHARGE @ 10% 28,560,248 28,235,243 314,162,724 310,587,676 ADD: EDUCATION CESS @ 2% 6,283,254 6,211,754 320,445,978 316,799,430 INCREMENTAL TAX PAYABLE ON ACCOUNT OF ADDITIONS MAD E IN THE ASSESSMENT U/S. 153A 3,646,548 DELAY IN FILING THE RETURN OF INCOME DUE DATE FOR FILING THE RETURN OF INCOME (30 DAYS) 25-JUN-08 DATE OF FILING RETURN OF INCOME 1-SEP-08 DELAY IN FILING THE RETURN OF INCOME (IN MONTHS) 2 MONTHS INTEREST U/S. 234A (36,46,548*2 MONTHS) 72,931 ITA NO.487/BANG/2014 PAGE 5 OF 6 5. THE LD. CIT(A), HOWEVER, HELD THAT THE AO HAS F OLLOWED THE PROVISIONS OF SECTION 234A IN THE MATTER OF LEVY OF INTEREST AND CONFIRMED THE ORDER OF AO. 6. AGGRIEVED, THE ASSESSEE HAS FILED THE PRESENT A PPEAL BEFORE THE TRIBUNAL. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS. THE LD. CO UNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE CIT(A), WHILE THE LD. DR RELIED ON THE IMPUGNED ORDER OF CIT(A). 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE A RE OF THE VIEW THAT COMPUTATION OF INTEREST PAYABLE U/S. 234A AS DONE B Y THE ASSESSEE IS IN ACCORDANCE WITH THE PROVISIONS OF ACT. THE AO HAS LEVIED INTEREST ON A SUM OF RS.10,73,75,757. THIS SUM HAS BEEN ARRIVED AT BY THE AO AS THE BALANCE TAX PAYABLE ON THE TOTAL INCOME ASSESSED U/ S. 153A FOR THE A.Y. 2006-07, AFTER GIVING CREDIT TO TDS/TCS AND ADVANCE TAX. THIS MODE OF COMPUTATION IS CONTRARY TO THE PROVISIONS OF SECTIO N 234A. THERE IS NO DISPUTE WITH REGARD TO THE PERIOD FOR WHICH INTERES T IS LEVIABLE I.E., FOR A PERIOD OF TWO MONTHS. THE DISPUTE IS ON THE QUANTU M ON WHICH INTEREST HAS TO BE LEVIED. AS WE HAVE ALREADY SEEN, SECTION 23 4A(3) LAYS DOWN THAT THE AMOUNT ON WHICH INTEREST IS TO BE PAID IS THE AMOUN T BY WHICH THE TAX ON THE TOTAL INCOME DETERMINED ON THE BASIS OF ASSESSM ENT U/S. 153A EXCEEDS THE TAX ON TOTAL INCOME DETERMINED U/S. 143(1) OR O N THE BASIS OF EARLIER ASSESSMENT. THIS FIGURE, AS PER THE CALCULATIONS G IVEN BY THE ASSESSEE IS A ITA NO.487/BANG/2014 PAGE 6 OF 6 SUM OF RS.36,46,548. THE AO HAS WRONGLY ADOPTED TH E FIGURE OF RS.10,73,75,757. THIS IS THE REASON WHY THERE IS A DIFFERENCE BETWEEN THE INTEREST CALCULATION AS SHOWN BY THE ASSESSEE AND A S DONE BY THE AO. WE HOLD THAT COMPUTATION OF INTEREST U/S. 234A AS SHOW N BY THE ASSESSEE IS CORRECT AND IS IN ACCORDANCE WITH THE PROVISIONS OF SECTION 234A(3) OF THE ACT. THE AO IS THEREFORE DIRECTED TO LEVY INTERES T U/S. 234A AT A SUM OF RS.72,931. WITH THESE OBSERVATIONS, APPEAL OF THE ASSESSEE IS ALLOWED. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . PRONOUNCED IN THE OPEN COURT ON THIS 23 RD DAY OF JANUARY, 2015. SD/- SD/- ( JASON P. BOAZ ) ( N.V. VASUDEVA N ) ACCOUNTANT MEMBER JUDICIAL MEMBE R BANGALORE, DATED, THE 23 RD JANUARY, 2015. /D S/ COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR / SENIOR PRIVATE SECRETARY ITAT, BANGALORE.