M/s Ashok coomercial Co, Nagpur V. Income Tax Officer Ward -3(3), Nagpur

ITA 54/NAG/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93383 (ITAT-NAGPUR)
• Duration Of Justice: 2 year(s) 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-05-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 1982-1983
• Appeal Filed On: 08-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S R KIRTANE
• Assessee Lawyers: R V LOYA
• Section: 244A; 154

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR. BEFORE SHRI MUKUL K. SHRAWAT, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. I.T.A. NO. 54 /NAG/2013 ASSESSMENT Y EAR : 1982-83. M/S ASHOK COMMERCIAL CO., THE INCOME-TAX OFFICER, C/O M/S LOYA BAGRI & CO. V/S. WARD-3(3), NAGPUR. CHARTERED ACCOUNTANTS, GANDHIBAGH, NAGPUR. PAN AACFA 0522D APPELLANT RESPONDENT. APPELLANT BY : SHRI R.V. LOYA. RESPONDENT BY : SH RI S.R. .KIRTANE.. DATE OF HEARING - 20-04-2015 DATE OF ORDER - 8 TH MAY, 2015 O R D E R PER SHRI SHAMIM YAHYA, A.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF CIT(APPEALS) DATED -19, MUMBAI (CAMP OFFICE NAGPUR) DATED 09-11- 2012 AND PERTAINS TO ASSESSMENT YEAR 1982-83. THE GROUNDS OF APPEAL READ AS UNDER : 1. THAT THE ORDER OF THE LEARNED INCOME TAX OFFICE R, WARD-3(3) UNDER SECTION 154 IS BAD IN LAW AND WRONG ON FACTS AND T HE LEARNED CIT(APPEALS) ERRED IN CONFIRMING THE SAME. ON THE FACTS AND CIR CUMSTANCES OF THE CASE THE ACTION OF THE CIT(A) IS UNJUSTIFIED. 2 2. THAT THE ASSESSING OFFICER ERRED IN LAW AND ON FACTS IN NOT ALLOWING INTEREST ON INTEREST WHICH BECAME DUE ON PARTICULA R DATE WHEN THE APPEAL ORDER WAS PASSED AND THE LEARNED CIT(A) WAS GROSSL Y UNJUSTIFIED IN UPHOLDING THE ORDER OF THE ASSESSING OFFICER . ON THE FACTS OF THE CASE AND VARIOUS JUDICIAL PRONOUNCEMENTS THE ACTION OF THE A UTHORITIES BELOW IS UNJUSTIFIED AND WITHOUT ANY SOUND BASIS. 3. THE ASSESSING OFFICER ERRED IN LAW AND ON FACTS IN NOT ALLOWING INTEREST @ 15% PER YEAR AT THE REFUND RELATES PRIO R TO 1989-90 AND THE LEARNED CIT ERRED IN SNOT ADJUDICATING UPON THE GR OUND RAISED. 4. THAT THE LEARNED CIT(A) ERRED IN NOT ISSUING SP ECIFIC DIRECTIONS REGARDING THE PERIOD, AMOUNT AND RATE OF INTEREST WHILE DETERMINING AND ALLOWING INTEREST UNDER SECTION 244A. 5. THAT THE AUTHORITIES BELOW HAVE FAILED TO CONSI DER THE JUDGMENT OF THE HONBLE SUPREME COURT WHICH ACTION IS HIGHLY U NJUSTIFIED. 2. IN THIS CASE THE ASSESSING OFFICER PASSED AN ORD ER UNDER SECTION 154 WHICH READS AS UNDER : IN THIS CASE, THE ORDER U/S 250 OF THE I.T. ACT, 1961 DETD. 4.06.2007 WAS PASSED AND REFUND OF ` .12,607/- ( ` . 69479 + INT U/S 244A ` . 243128/- WAS DUE TO THE ASSESSEE. AFTER VERIFICATION OF THE SAME CORRECT FIGURE OF INTEREST CALCULATION IS ARRIVED AT ` .1,20,230/-. DETAILS OF WHICH ARE GIVEN BELOW : 1. AMOUNT REFUNDABLE ON ACCOUNT OF PAYMENT MADE AGAINST PENALTY. ` .69,479/- 2. ADD: INTEREST U/S 244A (A) FROM 1.4.91 TO 30.09.99 6 MONTHS ON ` .20,000 @ 1.5% ` .1800 (B) FROM 1-10-91 TO -31-12-91 3 MONTHS ON ` .20,000 @ 1.5% ` . 900 (C) FROM 1.1.92 TO 28.02.92 2 MONTHS ON ` .43,747/- 3 @ 1% ` . 875 (D) FROM 1.3.92 TO 31.05.2001 11 MONTHS ON ` .69479 @ 1% ` .77122 (E) FROM 1.6.2001 TO 1.5.2002 12 MONTHS ON ` .69479 @ 0.75% ` . 6255 (F) FROM 1.6.2002 TO 31.8.2003 15 MONTHS ON ` .69479 @ 0.66% ` .6878 (G) FROM 1.9.2003 TO 30.06.2007 76 MONTHS ON ` .69479 @ 0.5% ` .26402 TOTAL ` .1,20,230/- ` . 1,89,709/- AGAINST THE ABOVE ORDER, ASSESSEE APPEALED BEFORE T HE LEARNED CIT(APPEALS). THE LEARNED CIT(APPEALS) CONSIDERED THE SUBMISSIONS OF THE ASSESSEE. HE DIRECTED THE ASSESSING OFFICER TO VERIFY THE FACTS ON RECORD AND GRANT INTEREST UNDER SECTION 244A UPTO THE DATE OF SIGNING OF REFUND VOUCHER. TH E OTHER ISSUE RAISED BEFORE THE LEARNED CIT(APPEALS) WAS REGARDING GRANT OF FUR THER INTEREST ON INTEREST UNDER SECTION 244A FROM THE DATE THE ASSESSEE BECOMES ENT ITLED TO INTEREST. IN THIS REGARD THE ASSESSEE PLACED RELIANCE UPON THE JUDGME NT OF HONBLE APEX COURT IN THE CASE OF SANDVIK ASIA LTD. 280 ITR 643. THE LEA RNED CIT(APPEALS) DISTINGUISHED THE DECISION OF SANDVIK ASIA (SUPRA) AND HELD THAT HE WAS UNABLE TO DRAW A PARALLEL BETWEEN THE PRESENT CASE AND SANDVIK ASIAS CASE. T HE LEARNED CIT(APPEALS) CONCLUDED AS UNDER : AS ALREADY EXPLAINED ABOVE, I AM UNABLE TO DRAW A PARALLEL BETWEEN THE PRESENT CASE AND THE SANDVIK ASIA CASE AND THE REFORE UNABLE TO APPLY THE SAME FOR REASONS AS ALREADY DISCUSSED AND ALSO FOR THE REASON THAT THE 4 ASSESSEE IN THE GROUND TAKEN BEFORE ME HAS NOT CLA IMED ANY COMPENSATION AS IN SANDVI ASIA CASE. FURTHER THE HONBLE SUPREME COURT IN SANDVIK DCAS E HAS ALLOWED COMPENSATION BY WAY OF INTEREST ON INTEREST IN VIE W OF THE LEGAL WITHHOLDING OF MONEY BY THE DEPARTMENT FOR 17 L ONG YEARS DESPITE SEVERAL ORDERS OF THE HIGH COURT AND SUPREME COURT . NO SUCH SITUATION EXISTS IN THE PRESENT CASE AND THEREFORE, THE RATI O OF SANDVIK ASIA CASE CANNOT BE APPLIED. THE HONBLE SUPREME COURT IN PARA 38 OF THE ORDER IN SANDVIK ASIA CASE (SUPRA) HAS REFERRED TO ADVANCED LAW LEXICON 3 RD EDITION 2005 WHILE DISCUSSING THE ISSUE ON AWARD OF COMPENSATION IN A SUITABLE CASE AND HAS HELD THAT THE COURT HAS TO TAKE ALL RELEVANT FACT ORS INTO CONSIDERATION WHILE AWARDING COMPENSATION. IN MY HUMBLE VIEW, COMPENS ATION IN A CASE MAY BE GRANTED BY COURT ON THE FACTS OF A CASE IN THE WRIT JURISDICTION AS IN SANDVIK CASE WHERE ASSESSEE APPROACHED BOMBAY HIGH COURT IN WRIT AND THEREAFTER APPROACHED SC AGAINST THE ORDER OF BOMB AY HIGH COURT DISMISSING THE WRIT. HOWEVER, CIT(A) BEING A QUASI JUDICIAL AUTHORITY, IS NOT EMPOWERED TO GRANT COMPENSATION EXCEPT AS PER EXPR ESS PROVISION OF LAW. NO EXPRESS PROVISION REGARDING COMPENSATION EXISTS IN THE STATUTE. INTEREST UNDER SECTION 244A AS ADMISSIBLE HAS ALREADY BEEN GRANTED. CONSIDERING ALL THE ABOVE AND SINCE THE ASSESSEE HAS NOT CLAIMED ANY COMPENSATION IN GROUND OF APPEAL TAKEN AND SINCE T HERE IS NO PROVISION TO GRANT FURTHER INTEREST IN STATUTE, THE OTHER GROUN DS OF THE ASSESSEE IS HEREBY DISMISSED. 3. AGAINST THE ABOVE ORDER, ASSESSEE IS IN APPEAL B EFORE US. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. THE LEARN ED COUNSEL OF THE ASSESSEE SUBMITTED THAT ORIGINALLY THE ASSESSING OFFICER HAD PASSED A REFUND OF ` .3,12,607/- IN THIS CASE. THE ASSESSEE HAS NOT BEEN PROVIDED WI TH ANY DETAIL OF THE COMPUTATION IN THIS REGARD. HOWEVER, THE ASSESSING OFFICER SUBSEQUENTLY PASSED AN ORDER UNDER SECTION 154 IN WHICH HE HAS COMPUTED THE REFUND AT ` .1,89,709/-. LEARNED COUNSEL PLEADED THAT THE ASSESSING OFFICER HAS NOT AT ALL BROUGHT ON RECORD AS TO WHAT WAS THE DEFECT IN THE ORIGINAL CO MPUTATION. LEARNED COUNSEL 5 FURTHER PLEADED THAT THE LEARNED CIT(APPEALS) HAS T OTALLY ERRED IN DISTINGUISHING THE DECISION OF HONBLE APEX COURT IN SANDVIK ASIA CASE. HE SUBMITTED THAT THE ASSESSEE IS FULLY ENTITLED TO INTEREST ON THE DELAY ED REFUND AND CONSEQUENT INTEREST ON INTEREST AND THAT TOO AT THE APPROPRIAT E RATE. LEARNED D.R., ON THE OTHER HAND, RELIED UPON THE ORDERS OF THE AUTHORITI ES BELOW. 4. UPON CAREFUL CONSIDERATION, WE FIND THAT THE AMO UNT OF INTEREST PAYABLE IN THIS CASE HAS TO BE COMPUTED AS PER LAW LAID DOWN B Y THE HONBLE APEX COURT IN THE CASE OF SANDVIK ASIA LTD. (SUPRA) WHEREIN THE H ONBLE APEX COURT OBSERVED AS UNDER : IN VIEW OF THE EXPRESS PROVISIONS OF THE INCOME- TAX ACT, 1961, AN ASSESSEE IS ENTITLED TO COMPENSATION BY WAY OF INT EREST FOR THE DELAY IN THE PAYMENT OF AMOUNTS LAWFULLY DUE TO THE ASSESSEE WH ICH ARE WITHHELD WRONGLY AND CONTRARY TO LAW. THE GOVERNMENT IS LIABLE TO PAY INTEREST, AT THE RATE APPLICABLE TO THE EXCESS AMOUNT REFUNDED TO THE ASSESSEE, ON THE INT EREST AMOUNT WHICH BECOMES DUE UNDER SECTION 214(1). SECTION 214(1) ITSELF RECOGNIZES IN PRINCIPLE THE LIABILITY TO PAY INTEREST ON THE AM OUNT OF TAX PAID IN EXCESS OF THE AMOUNT OF ASSESSED TAX AND WHICH IS RETAINED BY THE GOVERNMENT. INTEREST ON THE EXCESS AMOUNT IS PAYA BLE AT THE RATE SPECIFIED THEREIN FROM THE FIRST DAY OF THE YEAR OF ASSESSME NT TO THE DATE OF REGULAR ASSESSMENT. ONCE THE INTEREST BECOMES DUE, IT TAKE S THE SAME COLOUR AS THE EXCESS AMOUNT OF TAX WHICH IS REFUNDABLE ON REGULA R ASSESSMENT. THE SUPREME COURT IN MODI INDUSTRIES [1995] 216 ITR 75 9 HAS CLARIFIED THAT ADVANCE TAX HAS TO BE TREATED AS PAID PURSUANT TO AN ORDER OF ASSESSMENT AND HENCE INTEREST IS PAYABLE THEREON BUT UNDER SE CTION 244. INTEREST IS PAYABLE ON THE AMOUNT TO BE REFUNDED UNDER SECTION 244(1) WITHIN THREE MONTHS FROM THE DECISION OF TH E APPELLATE OR OTHER AUTHORITY SPECIFIED IN SECTION 240. THE EXPRESSION AMOUNT IN THE EARLIER PART OF SECTION 244(1A) REFERS NOT ONLY TO THE TAX BUT ALSO TO THE INTEREST; IT IS A NETURAL EXPRESSION AND IT CANNOT BE LIMITED TO THE TAX PAID IN PURSUANCE OF THE ORDER OF ASSESSMENT. 6 EVEN ASSUMING THAT THERE IS NO PROVISION FOR PAYM ENT OF COMPENSATION, COMPENSATION FOR DELAY IS REQUIRED T O BE PAID AS THE ACT ITSELF RECOGNIZES IN PRINCIPLE THE LIABILITY OF T HE DEPARTMENT TO PAY INTEREST WHEN EXCESS TAX WAS RETAINED AND THE SAME PRINCIPL E SHOULD BE EXTENDED TO CASES WHERE INTEREST WAS RETAINED. 5. WE FIND THAT HONBLE APEX COURT DECISION IS UNAM BIGUOUS. AS ADMITTEDLY IN THE PRESENT CASE ALSO THE ASSESSEE IS ENTITLED TO R EFUND WHICH SHOULD ENCOMPASS COMPENSATION FOR DELAY. AS SUCH, WE DIRECT THE ASSE SSING OFFICER TO CONSIDER THE ISSUE AFRESH IN THE LIGHT OF THE HONBLE APEX COUR T DECISION IN THE CASE OF SANDVIK ASIA LTD. (SUPRA). THE ASSESSING OFFICER SHOULD AL SO CONSIDER THE OTHER ASPECT OF REFUND OF INTEREST WHICH HAS NOT BEEN ADJUDICATED BY THE LEARNED CIT(APPEALS). 6. IN THE RESULT, THIS APPEAL BY THE ASSESSEE STAND S ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 8 TH MAY, 2015. SD/- S D/- (MUKUL K. SHRAWAT) (SHAMIM YAHYA) JUDICIAL MEMBER . ACCOUNTA NT MEMBER NAGPUR, DATED: 8 TH MAY, 2015. 7 COPY OF ORDER FORWARDED TO : 1. THE ASSESSEE. 2. REVENUE. 3. THE CIT(A) 4. THE CIT, NAGPUR. 5. THE D.R., ITAT, NAGPUR. 6. GUARD FILE. T RUE COPY. BY ORDER ASSISTANT REGISTRAR, I TAT, NAGPUR WAKODE