DCIT, Circle - 4, Kolkata, Kolkata V. M/s. Karam Chand Thapar & Bros.(Coal Sales) Ltd., Kolkata

ITA 534/KOL/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 2637 (ITAT-KOLKATA)
• Duration Of Justice: 1 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2010
• Appeal Filed By: Department
• Bench Allotted: C
• Assessment Year: 1994-1995
• Appeal Filed On: 15-03-2010
• Court: TRIBUNAL
• Department Lawyers: JYOTI KUMARI
• Assessee Lawyers: D S DAMLE
• Keywords: Recovery proceedings
• Section: 244A

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH - C , KOLKATA ( ) BEFORE . . , SHRI B.R.MITTAL, JUDICIAL MEMBER. /AND . . , , SHRI C.D. RAO, ACCOUNTANT MEMBER . / I.T.A.NO. 534/KOL/2010 / ASSESSMENT YEAR 1994 - 95 DCIT, CIRCLE - 4, KOLKATA. - - - VERSUS - . M/S.KARAM CHAND THAPAR & BROS., (COAL SALES) LTD., 25, BRABOURNE ROAD, KOLKATA 1. AABCK 1281 H ( / A PPELLANT ) ( / RESPONDENT ) / FOR THE APPELLANT : / S MT. JYOTI KUMARI, DR / FOR THE RESPONDENT : / SHRI D.S.DAMLE, AR / ORDER . . , SHRI B.R.MITTAL, JUDICIAL MEMBER. THE DEPARTMENT HAS FILED THIS APPEAL FOR THE ASSESSMENT YEAR 1994 - 95 AGAINST ORDER OF THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) DT.1.12.2009 ON THE FOLLOWING GROUND. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN LAW IN DIRECTING TH E ASSESSING OFFICER TO ALLOW INTEREST U/S.244A , WITHOUT CONSIDERING THAT IN THAT SECTION THERE IS NO PROVISION OF INTEREST FOR EXCESS PAYMENT OF SELF ASSESSMENT TAX U/S.140A. 2. AT THE TIME OF HEARING, THE LEARNED DR RELIED ON THE ORDER OF THE ASSESSIN G OFFICER. HOWEVER, THE LEARNED DR CONCEDED THAT THE ISSUE INVOLVED IS COVERED AGAINST THE DEPARTMENT BY THE DECISION OF ITAT, KOLKATA BENCH IN THE CASE OF HOOGHLY MILLS CO. LTD V. DCIT ( 74 ITD 309) AND THE LEARNED CIT(A) HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE BY FOLLOWING THE AFORESAID DECISION OF THE ITAT, KOLKATA BENCH (SUPRA).THE LEARNED AR OF THE ASSESSEE , APART FROM SUPPORTING THE / I.T.A.NO.534/KOL/2010 2 ORDER OF THE LEARNED CIT(A) FURTHER SUBMITTED THAT THE ISSUE INVOLVED HAS ALSO BEEN DECIDED BY HONBLE DELHI H IGH COURT IN THE CASE OF CIT V. SUTLEJ INDUSTRIES LTD., VIDE ORDER DT.15.3.2010 IN ITA NO.1204/2005 REPORTED IN [2010] 3 TAXMANN.COM 63 (NEW DELHI), WHEREIN IT HAS BEEN HELD THAT WHERE THE SELF ASSESSMENT TAX PAID BY THE ASSESSEE U/S.140A IS REFUNDED, THE ASSESSEE SHOULD, ON PRINCIPLE, BE ENTITLED TO INTEREST THEREON SINCE THE SELF - ASSESSMENT TAX FALLS WITHIN THE EXPRESSION REFUND OF ANY AMOUNT. THE LEARNED AR OF THE ASSESSEE FILED A COPY OF THE SAID ORDER OF HONBLE DELHI HIGH COURT TO SUBSTANTIATE HIS ABOVE SUBMISSIONS. 3. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE LEARNED REPRESENTATIVES OF THE PARTIES AND THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE LEARNED CIT(A) HAS DIRECTED THE ASSESSING OFFICER TO ALLOW INTEREST U/S.244A OF THE ACT ON THE EXCESS PAYMENT MADE U/S.140A OF THE ACT BY FOLLOWING THE DECISION OF THE ITAT, KOLKATA BENCH IN THE CASE OF HOOGHLY MILLS CO. LTD V. DCIT ( 74 ITD 309) . WE CONSIDER IT PRUDENT TO REPRODUCE PARA 5 OF THE SAID ORDER OF THE LEARNED CIT(A), WHICH RE ADS AS UNDER : (5) I HAVE CONSIDERED THE SUBMISSION OF THE APPELLANT AND PERUSED THE ORDER U/S. 154/254 OF THE ACT. I AM OF THE OPINION THAT THE APPELLANTS CONTENTION, THAT THE INTEREST ON REFUND OF EXCESS PAYMENT OF SELF - ASSESSMENT TAX IS ALLOWABLE U/ S. 244A(1)(B) OF THE ACT, IS CORRECT. IN THE CASE OF HOOGHLY MILLS CO. LTD. VS. DCIT, REPORTED IN 74 ITD 309 (CAL.), FOR A.Y. 1994 - 05, THE ASSESSEE COMPANY FILED ITS RETURN OF INCOME AND CLAIMED CREDIT FOR TAX DEDUCTED AT SOURCE AND SELF - ASSESSMENT TAX. TH E RETURN WAS PROCESSED U/S. 143(1)(A) AND NO INTEREST WAS ALLOWED BY THE ASSESSING OFFICER ON THE AMOUNT OF REFUND. ON APPEAL, THE CIT(A) HELD THAT SINCE THE REQUIREMENT OF THE EXPLANATION TO SECTION 244A(1)(B) WAS NOT SATISFIED, THE ASSESSEE WOULD NOT BE ENTITLED TO ANY INTEREST UNDER SECTION 244A(1)(B) OF THE ACT. ON FURTHER APPEAL TO THE ITAT, THE HONBLE ITAT CALCUTTA HAS HELD AS UNDER IN THE INSTANT CASE THE ASSESSEE CLAIMED INTEREST ON EXCESS PAYMENT OF SELF - ASSESSMENT TAX ALONG WITH TDS OVER THE TAX DETERMINABLE IN THE PROCESSING UNDER SECTION 143(1)(A). IN ACCORDANCE WITH SECTION 244A(1)(B), SUCH INTEREST WAS CLEARLY PAYABLE TO THE ASSESSEE. HOWEVER, THE COMMISSIONER (APPEALS) WAS NOT JUSTIFIED IN HER ARGUMENT WITH REGARD TO APPLICABILITY OF EXPLA NATION TO THE SAID CLAUSE TO THE / I.T.A.NO.534/KOL/2010 3 PRESENT CASE. THE INTIMATION ITSELF, ON COMPLETION OF PROCESSING UNDER SECTION 143 (1)(A) IS TO BE DEEMED AS THE NOTICE OF DEMAND UNDER SECTION 156. THE COMMISSIONER (APPEALS) ARGUED THAT THE SAID DEEMING PROVISION HAD GOT A LIMITED PURPOSE ONLY, VIZ, MAKING MACHINERY PROVISION FOR RECOVERY OF TAX APPLICABLE TO THE RECOVERY OF TAX DETERMINES IN TERMS OF SECTION 143(1)(A). HER ARGUMENT, IN THIS REGARD, COULD NOT BE ACCEPTED. IT HAS BEEN HELD BY VARIOUS COURTS IN A NUMBER OF D ECISIONS THAT A DEEMING PROVISION OF THE STATUTE IS REQUIRED TO BE GIVEN ITS FULL EFFECT. IF SUCH EFFECT WAS NOT GIVEN IN THE INSTANT CASE, IT WOULD LEAD TO A VERY ABSURD SITUATION INASMUCH AS HAD THE ASSESSMENT BEEN COMPLETED UNDER SECTION 143(3), IN THE INSTANT CASE, THE ASSESSEE WOULD HAVE BEEN ENTITLED TO INTEREST UNDER SECTION 244A(1)(B), WHEREAS IF INSTEAD OF MAKING THE ASSESSMENT UNDER SECTION 143(3), THE ASSESSING OFFICER MERELY PROCESSED THE RETURN UNDER SECTION 143(1)(A) NO SUCH INTEREST WOULD BE AVAILABLE TO THE ASSESSEE. THIS SORT OF INTERPRETATION OF THE RELEVANT EXPLANATION WAS NOT ONLY ABSURD BUT ALSO DISCRIMINATORY IN NATURE. HENCE, EVEN FOR THE PURPOSE OF EXPLANATION UNDER CONSIDERATION, A NOTICE OF DEMAND HAD TO BE DEEMED AS HAVING BEEN ISS UED UNDER SECTION 156 WHEN THE ASSESSING OFFICER HAD ISSUED AN INTIMATION AFTER PROCESSING THE RETURN UNDER SECTION 143(1)(A). THE CLAIM OF THE ASSESSEE WAS, THEREFORE, CLEARLY ADMISSIBLE AND THE EXPLANATION COULD NOT STAND IN THE WAY OF SUCH CLAIM. THE M ATTER MIGHT BE LOOKED INTO FROM ANOTHER ANGLE ALSO. THE INTEREST WAS REQUIRED TO BE PAID BY THE GOVERNMENT TO THE ASSESSEE FOR HOLDING AND UTILIZING THE EXCESS MONEY PAID BY THE ASSESSEE OVER AND ABOVE ITS TAX DUES. IN THE INSTANT CASE, THE ASSESSEE HAD PA ID MUCH MORE SELF - ASSESSMENT TAX THAN WAS REQUIRED UNDER THE RELEVANT PROVISIONS OF LAW. ALTHOUGH, THEREFORE, THE PAYMENT HAD BEEN CLAIMED BY THE ASSESSEE, AND ALSO CONSIDERED BY THE DEPARTMENTAL AUTHORITIES, TO BE SELF - ASSESSMENT TAX, ACTUALLY, THE SAME WAS NOT EXACTLY OF THE NATURE OF SELF - ASSESSMENT TAX. THE AMOUNT WHICH THE ASSESSEE WAS REQUIRED TO PAY IN ADDITION TO THE TAX DEDUCTED AT SOURCE TO MEET UP THE TAX LIABILITY ARISING OUT OF THE RETURN SHOULD ALONE BE CONSIDERED AS SELF - ASSESSMENT TAX. THE BALANCE AMOUNT OF TAX HAVING NO IMMEDIATE CONNECTION WITH THE RETURN OF INCOME WAS ENJOYED BY THE GOVERNMENT FOR A NUMBER OF MONTHS. IT WAS THEREFORE, FAIR AND / I.T.A.NO.534/KOL/2010 4 EQUITABLE ON THE PART OF THE GOVERNMENT TO PAY INTEREST ON THE SAID TO THE ASSESSEE WHEN THIS EX CESS AMOUNT WAS REFUNDED TO THE ASSESSEE. ACCORDINGLY, THEREFORE, THE ASSESSING OFFICER SHOULD PAY INTEREST UNDER SECTION 244A TO THE ASSESSEE ON THE AMOUNT OF REFUND 4. FURTHER WE OBSERVE THAT HONBLE DELHI HIGH COURT IN THE CASE OF CIT V. SUTLEJ INDU STRIES LTD., (SUPRA) HAS ALSO HELD THAT THE ASSESSEE IS ENTITLED TO INTEREST ON THE PRINCIPAL AMOUNT PAID BY WAY OF SELF ASSESSMENT TAX U/S.140A OF THE ACT WHERE THE SAID SELF - ASSESSMENT TAX IS REFUNDED TO THE ASSESSEE BECAUSE THE SELF - ASSESSMENT TAX ALSO FALLS WITHIN THE EXPRESSION REFUND OF ANY AMOUNT. IT WAS FURTHER HELD BY THE HONBLE HIGH COURT THAT THE COMPUTATION OF INTEREST ON SELF - ASSESSMENT TAX HAS TO BE FROM THE DATE OF PAYMENT OF THE SAID AMOUNT UPTO THE DATE ON WHICH REFUND IS ACTUALLY GRANTE D. 5. IN VIEW OF THE ABOVE, WE UPHOLD THE ORDER OF THE LEARNED CIT(A) AND REJECT THE GROUND OF APPEAL TAKEN BY THE DEPARTMENT. 6. IN THE RESULT, THE APPEAL OF THE DEPARTMENT IS DISMISSED. THIS ORDER IS PRONOUNCED IN OPEN COURT ON DT. 30.04.2010 SD/ - SD/ - ( . . ) (C.D. RAO), ACCOUNTANT MEMBER ( . . ), ( B.R.MITTAL ), JUDICIAL MEMBER ( ) DATE : 30.04.2010 ( /) H.K.PADHEE / S NR.PRIVATE SECRETARY. / I.T.A.NO.534/KOL/2010 5 - COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT : DCIT, CIRCLE - 4, KOLKATA 2 / THE RESPONDENT - M/S.KARAM CHAND THAPAR & BROS., (COAL SALES) LTD., 25, B RABOURNE ROAD, KOLKATA 1. 3. / THE CIT, 4. ( )/ THE CIT(A), 5. / DR, KOLKATA BENCH 6. GUARD FILE . / TRUE COPY , / BY ORDER , / DEPUTY REGISTRAR .