DCIT 7(3), MUMBAI V. VOLTAS LTD, MUMBAI

ITA 5426/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 92227 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-04-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 26-02-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 08-08-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PAWAN KU MAR BEERLA
• Assessee Lawyers: NITESH JOSHI
• Keywords: Non compliance
• Section: 244A

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES F MUMBAI . . , , , BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI RAJENDRA , ACCOUNTANT MEMBER ITA NO.5426/MUM/2013(A.Y. 2008-09) ITA NO.5427/MUM/2013(A.Y. 2011-12) THE DCIT 7(3), ROOM NO.615, 6 TH FLOOR, AAYKAR BHAVAN, MK ROAD, MUMBAI 400020 (APPELLANT ) VS. M/S. VOLTAS LTD., BABASAHEB AMBEDKAR ROAD, CHINCHPOKLI, MUMBAI 400 003 (RESPONDENT) APPELLANT BY : SHRI PAW AN KUMAR BEERLA RESPONDENT BY : SHRI NITES H JOSHI DATE OF HEARING 25/03/2015 DATE OF PRONOUNCEMENT 01/04 /2015 ORDER PER I.P.BANSAL, J.M: BOTH THESE APPEALS ARE FILED BY THE REVENUE AND ARE DIRECTED AGAINST TWO SEPARATE ORDERS PASSED BY LD. CIT(A)-13 DATED 24/05 /2013 AND 30/05/2013 FOR ASSESSMENT YEARS 2008-09 AND 2011-12 RESPECTIVELY. GROUNDS OF APPEAL IN BOTH THE APPEALS ARE IDENTICAL AND READ AS UNDER: 1. THE LEARNED CIT(A) HAS ERRED ON FACTS AND IN LA W IN HOLDING THAT THE ASSESSEE IS ELIGIBLE FOR INTEREST ON REFUND AS PER CLAUSE (B ) OF SUB-SECTION (1) OF SECTION 244A OF THE INCOME TAX ACT, 1961 WITHOUT PROPERLY A PPRECIATING THE FACTUAL AND LEGAL MATRIX OF THE CASE AS CLEARLY BROUGHT OUT BY THE ASSESSING OFFICER. 2. THE LEARNED CIT(A) HAS ERRED ON FACTS AND IN LAW IN HOLDING THAT THE ASSESSEE IS ENTITLED FOR INTEREST U/S 244A(1 )(B) OF THE INC OME TAX ACT, 1961 ON REFUND OUT OF EXCESS SELF ASSESSMENT TAX PAID, WITHOUT PROPER LY APPRECIATING THE FACT THAT ITA NO.5426/MUM/2013(A.Y. 2008-09) ITA NO.5427/MUM/2013(A.Y. 2011-12) 2 THE SAID SELF ASSESSMENT TAX WAS NOT COLLECTED THRO UGH A NOTICE OF DEMAND AS PROVIDED IN EXPLANATION TO CLAUSE (B) OF SUB-SECTIO N 244A(1) OF THE INCOME TAX ACT, 1961 3. THE LD. CIT(A}'S ORDER IS CONTRARY IN LAW AND ON FACTS AND DESERVES TO BE SET ASIDE. 4. THE APPELLANT PRAYS THAT THE ORDER OF CIT(A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE AO RESTORED. THE APPELLANT CRAVES L EAVE TO AMEND OR ALTER ANY GROUND OR ADD A NEW GROUND THAT MAY BE NECESSARY. 2. AS IT CAN BE SEEN FROM THE GROUNDS OF APPEAL THE ONLY GRIEVANCE OF THE REVENUE IS THAT LD. CIT(A) HAS COMMITTED AN ERROR I N GRANTING INTEREST TO THE ASSESSEE ON THE SELF ASSESSMENT TAX AS THE SAME CAN NOT BE SAID TO BE COLLECTED THROUGH A NOTICE OF DEMAND AS PROVIDED IN EXPLANATI ON TO CLAUSE (B) OF SUB-SECTION 244A(1) OF THE INCOME TAX ACT,1961(THE ACT). THE A O DID NOT PROVIDE INTEREST TO THE ASSESSEE ON THE SELF ASSESSMENT TAX PAID WITH T HE RETURN OF INCOME AND ALSO ON THE REGULAR PAYMENT MADE BY WAY OF REFUND ADJUSTMEN T ON 20/03/2010 IN RESPECT OF ASSESSMENT YEAR 2008-09. THE ASSESSEE FILED A RECT IFICATION APPLICATION WHICH WAS REJECTED BY AO AND LD. CIT(A) ACCEPTED SUCH CLAIM O F THE ASSESSEE AND HAS RECOMPUTED THE INTEREST PAYABLE TO THE ASSESSEE IN RESPECT OF SELF ASSESSMENT MADE IN RESPECT OF BOTH THE YEARS AND REFUND ADJUSTED IN RESPECT OF ASSESSMENT YEAR 2007- 08. 3. RELYING UPON THE GROUNDS OF APPEAL IT WAS SUBMIT TED BY LD. DR THAT LD. CIT(A) HAS COMMITTED AN ERROR IN GRANTING THE INTER EST TO THE ASSESSEE ON THE PAYMENT OF SELF ASSESSMENT TAX AS WELL AS REFUND ADJUSTMENT IN RESPECT OF A.Y 2007-08. 4. AT THE OUTSET IT WAS POINTED OUT BY LD. AR THAT ISSUE REGARDING GRANT OF INTEREST ON SELF ASSESSMENT IS NO MORE RES-INTEGRA AS HONBLE BOMBAY HIGH COURT ITA NO.5426/MUM/2013(A.Y. 2008-09) ITA NO.5427/MUM/2013(A.Y. 2011-12) 3 IN THE CASE OF STOCK HOLDING CORPORATION OF INDIA LTD. VS. N.C. TEWARI, THE COMMISSIONER OF INCOME TAX, MUMBAI &OTHERS, ORDER DATED 17/11/2014 IN WRIT PETITION NO.823 OF 2000, AFTER CONSIDERING VARIOUS ARGUMENTS OF THE REVENUE, HAS HELD THAT AO HAS TO COMPUTE THE INTEREST PAYABLE FR OM THE DATE OF PAYMENT ON SELF ASSESSMENT TAX TILL THE DATE OF REFUND. HE HAS PLA CED A COPY OF THE SAID ORDER BEFORE US AND A COPY WAS ALSO GIVEN TO LD. DR. IN THE SAID CASE ASSESSEE HAD PAID A SUM OF RS.2.60 CRORES ON 31/8/1994 BY WAY OF SELF ASSESSMENT TAX ON WHICH GRANT OF INTEREST WAS DENIED BY THE REVENUE. SEVERAL CON TENTIONS WERE RAISED BY THE REVENUE TO CONTEND THAT ASSESSEE IS NOT ENTITLED TO SUCH INTEREST. THEIR LORDSHIPS OF HONBLE BOMBAY HIGH COURT HAVE CONSIDERED ALL TH ESE CONTENTIONS OF THE REVENUE AND AFTER ANALYZING THE PROVISIONS OF SECTI ON 244A OF THE ACT THEIR LORDSHIPS HAVE HELD THAT THE AMOUNT PAID UNDER SEC TION 140A IS AN AMOUNT PAYABLE AS AND BY WAY OF THE TAX AFTER NOTICING THA T THERE IS LIKELY TO BE SHORTFALL IN THE TAXES ALREADY PAID. THUS, SUCH PAYMENT IS CON SIDERED TO BE TAX UNDER THE AFORESAID PROVISIONS. THEIR LORDSHIPS HAVE HELD T HAT ON THE DATE WHEN ASSESSMENT ORDER WAS PASSED, THE AO HAD ACCEPTED THE ENTIRE AM OUNT PAID AS TAX ON SELF ASSESSMENT ON A PAYMENT OF TAX AND WHEN ANY REFU ND BECAME DUE TO AN ASSESSEE OUT OF TAX PAID, IT BECOMES SO ONLY AFTER HOLDING T HAT IT IS NOT THE TAX PAYABLE. THEREFORE, THEIR LORDSHIPS HELD THAT THERE IS NO SU BSTANCE IN THE OBJECTION OF THE REVENUE THAT AMOUNT PAID ON SELF ASSESSMENT IS NOT TAX AND, THEREFORE, NO INTEREST CAN BE GRANTED ON REFUND ON SUCH AMOUNT WHICH ARE N OT TAXED. 4.1 THEIR LORDSHIPS OF HONBLE BOMBAY HIGH COURT HA VE ALSO REJECTED THE CONTENTION OF THE REVENUE THAT RELYING UPON DECISIO N OF HONBLE SUPREME COURT IN THE CASE OF UNION OF INDIA VS. TATA CHEMICALS, 363 ITR 658, INTEREST SHOULD NOT BE PAID TO THE ASSESSEE ON SELF ASSESSMENT. THEIR LOR DSHIPS AFTER CONSIDERING THE SAID ITA NO.5426/MUM/2013(A.Y. 2008-09) ITA NO.5427/MUM/2013(A.Y. 2011-12) 4 DECISION OF HONBLE SUPREME COURT HAVE HELD THAT TH E SAID DECISION WOULD NOT BE APPLICABLE AND THE RELEVANT OBSERVATIONS ARE REPRO DUCED BELOW: 10. THE ONLY DISTINCTION BEING MADE IN THE PRESEN T FACTS AND THOSE OF APEX COURT DECISION IN TATA CHEMICALS IS THAT THE AMOUNT PAID AS TAX ON SELF ASSESSMENT WAS PAID VOLUNTARILY IN THE PRESENT CASE WHILE IN THE CASE OF TATA CHEMICALS LTD. (SUPRA) THE TAX WAS DEDUCTED AT A HI GHER RATE IN VIEW OF THE ORDER PASSED BY THE AUTHORITY UNDER THE ACT. WE AR E UNABLE TO APPRECIATE THIS DISTINCTION. THIS IS FOR THE REASON THAT WHEN AN ASSESSEE PAYS TAX EITHER AS ADVANCE TAX OR ON SELF ASSESSMENT, IT IS PAID TO DISCHARGE AN OBLIGATION UNDER THE ACT. NOT COMPLYING WITH THE OBLIGATION U NDER THE ACT VISITS CONSEQUENCES TO AN ASSESSEE JUST AS NON COMPLIANCE OF ORDERS PASSED BY AUTHORITIES UNDER THE ACT WOULD. THUS THERE IS NO VOLUNTARY PAYMENT OF TAX ON SELF ASSESSMENT AS CONTENDED BY THE REVENUE. 11. THE FURTHER SUBMISSION OF MR. PINTO THAT IN VI EW OF THE EXPLANATION TO SECTION 244A(1)(B) OF THE ACT THE SAME WOULD APPLY ONLY WHEN THE ACCOUNTS ARE PAID TO A NOTICE ISSUED UNDER SECTION 156 OF TH E ACT. NOT OTHERWISE. THIS VERY SUBMISSION WAS ADVANCED BY THE REVENUE BE FORE THE APEX COURT IN THE CASE OF TATA CHEMICALS (SUPRA). IN FACT, THE FIRST APPELLATE AUTHORITY IN THE CASE OF TATA CHEMICALS (SUPRA) HAD REJECTED THE PETITIONERS CLAIM FOR INTEREST ON THE GROUND THAT IN VIEW OF THE EXPLANAT ION APPENDED TO SECTION 244A(B) OF THE ACT, REFUND OF ANY AMOUNT UNDER THE AFORESAID PROVISION COULD ONLY BE RESPECT OF REFUND OF EXCESS PAYMENT M ADE UNDER SECTION 156 OF THE ACT. THE AFORESAID INTERPRETATION WAS NEGATIVE D IN THE SECOND APPEAL BY THE TRIBUNAL AS WELL AS BY THE HIGH COURT AND THE A PEX COURT. 4.2 THEIR LORDSHIPS HAVE ALSO REJECTED THE CONTENTI ON OF THE REVENUE THAT PAYMENT OF INTEREST SHOULD ONLY BE MADE FROM THE DA TE OF THE NOTICE UNDER SECTION 156 WITH THE FOLLOWING OBSERVATIONS: SIMILARLY, THE NEXT CONTENTION URGED ON BEHALF OF THE REVENUE THAT THE PAYMENT OF INTEREST SHOULD ONLY BE MADE FROM THE DA TE OF NOTICE UNDER SECTION 156 OF THE ACT IS ISSUED TO THE PETITIONER IN TERMS OF EXPLANATION TO SECTION 244A(1)(B) OF THE ACT CANNOT BE ACCEPTED FO R TWO REASONS. FIRSTLY, AS HELD BY THE SUPREME COURT IN TATA CHEMICALS (SUP RA), THE EXPLANATION WOULD HAVE EFFECT ONLY WHERE PAYMENTS OF TAX HAVE B EEN MADE PURSUANT TO NOTICE UNDER SECTION 156 OF THE ACT. IN THIS CASE, THE PAYMENT HAS NOT BEEN ITA NO.5426/MUM/2013(A.Y. 2008-09) ITA NO.5427/MUM/2013(A.Y. 2011-12) 5 MADE PURSUANT TO ANY NOTICE OF DEMAND BUT PRIOR TO THE FILING OF THE RETURN OF INCOME IN ACCORDANCE WITH SECTION 140A OF THE ACT. SECONDLY, THE PROVISIONS OF SECTION 244A(1) (B) VERY CLEARLY MAN DATE THAT THE REVENUE WOULD PAY INTEREST ON THE AMOUNT REFUNDED FOR THE P ERIOD COMMENCING FROM THE DATE THE PAYMENT OF TAX IS MADE TO THE REVENUE UPTO THE DATE WHEN REFUND IS GRANTED TO THE REVENUE. THUS, THE SUBMISSION O F MR. PINTO THAT THE INTEREST IS PAYABLE NOT FROM THE DATE OF PAYMENT BU T FROM THE DATE OF DEMAND NOTICE UNDER SECTION 156 OF THE ACT CANNOT BE ACCEP TED AS OTHERWISE THE LEGISLATION WOULD HAVE SO PROVIDED IN SECTION 244A( 1)(B) OF THE ACT, RATHER THEN HAVING PROVIDED FROM THE DATE OF PAYMENT OF T AX. 4.3 FINALLY IT WAS HELD BY HONBLE HIGH COURT THAT ASSESSEE IS ENTITLED TO GET INTEREST ON TAXES PAID AS SELF ASSESSMENT. REFERE NCE CAN BE MADE TO THE FOLLOWING OBSERVATIONS : 13. WE FIND SUPPORT FOR OUR VIEW FROM THE DECISIO NS RENDERED BY KARNATAKA HIGH COURT IN COMMISSIONER OF INCOME-TAX V/S. VIJAYA BANK (2011) 338 ITR 489 AND DELHI HIGH COURT IN COMMISSI ONER OF INCOME TAX V/S SUTLEJ INDUSTRIES LTD. (2010) 325 ITR 331. IN BOTH CASES IN IDENTICAL CIRCUMSTANCES IT WAS HELD THAT INTEREST IS PAYABLE FROM THE DATE OF PAYMENT OF THE TAX ON SELF ASSESSMENT TO THE DATE OF REFUND OF THE AMOUNTS UNDER SECTION 244A OF THE ACT. 14. ACCORDINGLY, FOR ALL THE AFORESAID REASONS, WE SET ASIDE THE IMPUGNED ORDER DATED 28 SEPTEMBER 1999. WE DIRECT THE ASSES SING OFFICER TO COMPUTE THE INTEREST PAYABLE FROM THE DATE OF PAYMENT ON SE LF-ASSESSMENT TAX I.E. 31 AUGUST 1994 TILL THE DATE OF REFUND I.E. 24 OCTOBER 1998. THE REVENUE IS DIRECTED TO COMPUTE THE INTEREST DUE TO THE PETITI ONER AND PAY THE SAME WITHIN SIX WEEKS FROM TODAY. 5. ON THE OTHER HAND, LD. DR RELIED UPON THE GROUND S OF APPEAL AND ORDER PASSED BY AO. 6. WE HAVE HEARD BOTH THE PARTIES AND THEIR CONT ENTIONS HAVE CAREFULLY BEEN CONSIDERED. THE ISSUE RAISED BY THE REVENUE IS COV ERED AGAINST THE REVENUE BY THE AFOREMENTIONED DECISION OF HONBLE BOMBAY HIGH COUR T. THE RELEVANT ITA NO.5426/MUM/2013(A.Y. 2008-09) ITA NO.5427/MUM/2013(A.Y. 2011-12) 6 OBSERVATIONS HAVE ALREADY BEEN REPRODUCED. RESPEC TFULLY FOLLOWING THE SAME WE HOLD THAT LD. CIT(A) DID NOT COMMIT ANY ERROR IN GR ANTING THE IMPUGNED INTEREST TO THE ASSESSEE. FINDING NO MERIT BOTH THE APPEALS OF THE REVENUES ARE DISMISSED. 7. IN THE RESULT, BOTH THE APPEALS FILED BY THE REV ENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 01/04/2015 01/04 /2015 SD/- SD/- ( , /RAJENDRA ) ( . . / I.P. BANSAL ) /ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; $% DATED 01/04/2015 / COPY OF THE ORDER FORWARDED TO : 1. & '( / THE APPELLANT 2. )*'( / THE RESPONDENT. 3. +, ( & ) / THE CIT(A)- 4. +, / CIT 5. -. ),%/0 , &1 &/0 , / DR, ITAT, MUMBAI 6. 2 / GUARD FILE. / BY ORDER, * -, ), //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI . % . ./ VM , SR. PS ITA NO.5426/MUM/2013(A.Y. 2008-09) ITA NO.5427/MUM/2013(A.Y. 2011-12) 7 DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 25/03/2015 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 26/03/2015 SR.PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7. FILE SENT TO THE BENCH CLERK SR.PS/PS 8 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER