GTL LIMITED , MUMBAI V. DEPUTY COMMISSIONER OF INCOME TAX LTU-2, MUMBAI

ITA 5099/MUM/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 5814 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-09-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: G
• Assessment Year: 2005-2006
• Appeal Filed On: 05-08-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: T S KHALSA L D
• Assessee Lawyers: MANISH SHAH LD
• Keywords: Rectification of order; Opportunity of being heard; Principle of natural justice; Period of limitation; Time period of passing order
• Section: 143(3); 244A; 153A; 115JB; 143(1); 154; 15

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI , , BEFORE HONBLE SHRI VIKAS AWASTHY, JM AND HONBLE SHRI MANO J KUMAR AGGARWAL, AM (HEARING THROUGH VIDEO CONFERENCING MODE) ./ I.T.A. NO. 5099 /MUM/2019 ( / ASSESSMENT YEAR : 20 05 - 06 ) GTL LTD. 412, JANMABHOOMI CHAMBERS, 29 WALCHAND HIRACHAND MARG, BALLARD ESTATE, MUMBAI - 400 038 / VS. DCIT (L TU) - 2 29 TH FLOOR, CENTRE - 1 WORLD TRADE CENTRE, MUMBAI - 400 005 ./ ./ PAN/GIR NO . A AAC G - 3742 - L ( / APPELLANT ) : ( / RESPONDENT ) ASSESSEE BY : SHRI MANISH SHAH LD. AR REVENUE BY : SHRI T. S. KHALSA LD. SR. DR / DATE OF HEARING : 16/08 /2021 / DATE OF PRONOUNCEMENT : 15/09/2021 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. AFORESAID APPEAL BY ASSESSEE FOR ASSESSMENT YEAR 20 05 - 06 ARISES OUT OF THE ORDER OF LEARNED COMMI SSIONER OF INCOME - TAX (APPEALS) - 1 , MUMBAI [CIT (A) ], DATED 06 /06 /20 19 IN THE MATTER OF RECTIFICATION ORDER PASSED BY LD. AO U/S 154 ON 05/06/2018.THE GROUND READ AS UNDER: - GROUND I: RECTIFICATION OF ASSESSMENT U/S 154 OF THE ACT IS VOID AB - INITIO : 1. ON THE FACT S AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN UPHOLDING THE RECTIFICATION ORDER PASSED BY THE AO U/S 154 OF THE ACT DATED JUNE 5, 2016. 2 2. THE CIT(A) FAILED TO APPRECIATE AND OUGHT TO HAVE HELD THAT, RECTIFICATION OF ASSESSMEN T AFTER A PERIOD OF 4 YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE ORDER SOUGHT TO BE AMENDED WAS PASSED, IS AB - INITIO VOID. 3. THE APPELLANT PRAYS THAT IT BE HELD THAT RECTIFICATION OF ASSESSMENT UNDER SECTION 154 OF THE ACT IS VOID AB - INITIO AN D/OR OTHERWISE BAD - IN - LAW. GROUND II: VIOLATION OF THE PRINCIPLES OF NATURAL JUSTICE: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN HOLDING THAT THE RECTIFICATION MADE WITHOUT GIVING AN OPPORTUNITY OF BEING HEARD TO THE AP PELLANT IS VALID. 2. THE APPELLANT PRAYS THAT IT BE HELD THAT RECTIFICATION OF ASSESSMENT UNDER SECTION 154 OF THE ACT IS VOID AB - INITIO AND/OR OTHERWISE BAD - IN - LAW. WITHOUT PREJUDICE TO GROUND NO. I AND II, GROUND III: WRONG COMPUTATION OF INTEREST U/S 2 34D: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN LAW, THE LD. CIT (A) ERRED IN DIRECTING THE LD. AO TO VERIFY THE FACTS AND CHARGE INTEREST U/S 234D OF THE ACT AS PER LAW INSTEAD OF DELETING THE LEVY OF INTEREST U/S 234D OF THE ACT. 2. THE CIT(A) FA ILED TO APPRECIATE AND OUGHT TO HAVE HELD THAT INTEREST U/S 234D OF THE ACT IS NOT LEVIABLE SINCE REFUND WAS NEVER GRANTED TO THE APPELLANT UNDER SECTION 143(1) OF THE ACT. 3. THE APPELLANT PRAYS THAT INTEREST UNDER SECTION 234D OF THE ACT BE DELETED. GRO UND IV: GENERAL THE APPELLANT CRAVES LEAVE TO ADD TO, ALTER AND / OR AMEND ALL OR ANY OF THE FOREGOING GROUNDS OF APPEAL. 2. THE MATERIAL FACTS ARE THAT AN ASSESSMENT WAS FRAMED AGAINST THE ASSESSEE FOR THE YEAR U/S 143(3) ON 31/12/2008. THEREAFTER, A NOT ICE U/S 153A W AS I SSUED ON 27/06/2011 AGAINST WHICH A RETURN WAS FILED BY THE ASSESSEE. HOWEVER, THE ASSESSEE FIL ED APPLICATION BEFORE HONBLE INCOME TAX SETTLE MENT COMMISSION (ITSC) . THE EFFECT OF ORDER OF HONBLE ITSC WAS GIVEN ON 31/12/2013 WHE REIN THE INCOME WAS DETERMI NED AT RS . 15.94 CRORES UNDER NORMAL PROVISIONS AND AT RS.46.92 CRORES U /S 115JB OF THE ACT. THE ASSESSEE POINTED OUT THAT WHILE PASSING THIS ORDER, INTEREST U/S 234D WAS WRONGLY CHARGED A ND INTEREST U/S 244A WAS NOT ALLOWED TO THE ASSESSE E ALTHOUGH THE SAME WAS ALREADY ALLOWED BY THE DEPARTMENT WHILE IS SUING REFUND PREVIOUSLY. ACCORDINGLY , THE ASSESSMENT WAS RECTIFIED U / S 154 ON 11/06/2014 AND REFUND WAS ISSUED TO THE ASSESSEE. 3 3. HOWE VER, LD. AO MADE ANOTHER RECTIFICATION SINCE IT WAS SE EN THAT INTEREST U/S 244A WAS GRANTED IN EXCESS TO THE EXTENT OF RS.1.39 LACS. IT WAS ALSO NO T ED THAT INTEREST U/S 234D WAS WRONGLY CHARGED. AC CORDINGLY, THE ASSESSMENT WAS AGAIN RECTIFIED V IDE ORDER DATED 05 /06/ 2018 WHEREIN CORRECT COMPUTATIONS WERE MADE AND A DEMAND OF RS.3.50 LACS WAS RAISED AGAINST THE ASSESSEE. THE COMPUTATIONS HAVE BEEN GIVEN IN PARA - 6 OF RECTIFICATION ORDER DATED 05/06/2018. AGGRIEVED, THE ASSESSEE PREFERRED FURTHER APPEAL BEFORE LD. CIT(A). 4. DURING APPELLATE PROCEEDINGS, THE ASSES SEE SUBMITTED THAT SINCE ORDER GIVING EFFECT TO HONBLE ITSC ORDER WAS PASSED ON 31/12/2013, THE RECTIFICATION ORDER PASSED U/S 154 ON 05/06/2018 WAS BARRED BY LIMITATIONS SINCE THE ORDER COULD BE RECTIFIED ONLY WITHIN A PERIOD OF 4 YEARS FROM THE END OF F INANCIAL YEAR IN WHICH ORDER SOUGHT TO BE RECTIFIED HAS BEEN PASSED WHICH WOULD BE 31/03/2018. THE ASSESSEE ALSO SUBMITTED THAT OPPORTUNITY OF HEARING WAS NOT GRANTED TO THE ASSESSEE BEFORE RECTIFYING THE ORDER. 5. HOWEVER, LD. CIT(A) NOTED THAT LD. AO HA S REFERRED TO ORDER PASSED U/S 154 ON 11/06/2014 AND COUNTED FROM THIS DATE, RECTIFICATION ORDER PASSED U/S 154 ON 05/06/2018 IS WITHIN THE PERIOD OF 4 YEARS. FURTHER NON - GRANT OF HEARING WOULD NOT RENDER THE ORDER AS BAD IN LAW FOR THE REASON THAT IN THE CONSEQUENT APPELLATE PROCEEDINGS, OPPORTUNITY OF HEARING HAS BEEN GRANTED TO THE ASSESSEE. THEREFORE, THE PLEA RAISED BY THE ASSESSEE WAS TO BE REJECTED. 6. ON MERITS, THE ASSESSEE CONTENDED THAT THERE COULD NOT HAVE BEEN ANY LEVY OF INTEREST U/S 234D WHEN REFUND WAS NEVER GRANTED TO THE ASSESSEE. FURTHER, LD.AO DID NOT GRANT INTEREST U/S 244A FOR MONTH IN WHICH REFUND WAS DETERMINED. ACCEPTING THE SAME, LD.AO WAS DIRECTED 4 TO CHARGE CORRECT INTEREST U/S 234D AS WELL AS GRANT INTEREST U/S 244A IN ACCORDANCE WITH LAW AFTER DUE VERIFICATION. STILL AGGRIEVED, THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 7. UPON PERUSAL OF MATERIAL ON RECORD, IT COULD BE SEEN THAT ORDER GIVING EFFECT TO ITSC ORDER HAS BEEN PASSED BY LD. AO ON 31/12/2013 AND A DEMAND TO RS.102.21 LACS HAS BEEN RAISED AGAINST THE ASSESSEE. HOWEVER, THE ORDER WAS RECTIFIED U/S 154 , AT ASSESSEES INSTANCE, ON 11/06/2014 AND FRESH COMPUTATIONS HAVE BEEN MADE REDUCING THE DEMAND TO RS.38.06 LACS. THE DEMAND HAS BEEN REDUCED DUE TO REWORKING OF INTEREST U/S 244A AND 234D WITHOUT DISTURBING THE ASSESSED INCOME. THE ASSESSEE HAS PAID THIS DEMAND ON 04/07/2014. A NOTHER RECTIFICATION HAS BEEN MADE IN THIS ORDER ON 05/06/2018 RAISING FRESH DEMAND OF RS.3.50 LACS AGAINST THE ASSESSEE. THIS RECTIFICATION IS AT THE INSTANCE OF LD. AO SINCE EXCESS INTEREST WAS ALLOWED U/S 244A AND INTEREST U/S 234D WAS WRONGLY CHARGED. IN THIS ORDER ALSO, THE ASSESSED INCOME HAS NOT BEEN DISTURBED. THEREFORE, IN OUR OPINION, WHAT THIS ORDER HAS RECTIFIED IS THE ORDER PASSED U/S 15 4 ON 11/06/2014 AND NOT THE ASSESSMENT ORDER FRAMED PURSUANT TO THE DIRECTIONS OF HONBLE ITSC ON 31/12/2013. THEREFORE, AS COUNTED FROM 11/06/2014, THE RECTI FICATION ORDER PASSED U/S 154 ON 05/06/2018 IS WELL WITHIN THE LIMITATION PERIOD OF FOUR YEARS (FR OM THE END OF FINANCIAL YEAR IN WHICH ORDER SOUGHT TO BE RECTIFIED HAS BEEN PASSED) AND THE SAME COULD NOT BE HELD TO BE BAD IN LAW. 8. PROCEEDING FURTHER, WE FIND THAT LD. AO WAS OBLIGATED BY LAW TO PROVIDE OPPORTUNITY OF HEARING TO THE ASSESSEE BEFORE RAISING FRESH DEMAND. W E FIND THAT LD. CIT(A) HAS DIRECTED LD. AO TO COMPUTE CORRECT INTEREST U/S 234D AS WELL AS GRANT CORRECT INTEREST U/S 244A AFTER DUE 5 VERIFICATION OF FACT S AND IN ACCORDANCE WITH LAW. THEREFORE, WITH THESE DIRECTIONS, THE GRIEVANCE O F THE ASSESSEE HAS BEEN TAKEN CARE OF AND LD. AO HAS BEEN DIRECTED TO CHARGE / GRANT INTEREST AS PER LAW. THEREFORE, NO FURTHER DIRECTIONS ARE REQUIRED FROM OUR SIDE EXCEPT FOR THE DIRECTION TO LD. AO THAT SUFFICIENT OPPORTUNITY OF HEARING SHALL BE GIVE TO THE ASSESSE E WHILE GIVING EFFECT TO APPELLATE ORDER. 9. THE APPEAL STAND PARTLY ALLOWED FOR STATISTICAL PURPOSES IN TERMS OF OUR ABOVE ORDER. ORDER PRONOUNCED ON 15 TH SEPTEMBER, 2021. SD/ - SD/ - ( VIKAS AWASTHY ) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 15/09/2021 SR.PS, DHANANJAY / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE C IT(A) 4. / CIT CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.