Inderjeet Gulati, New Delhi V. ACIT, New Delhi

ITA 5505/DEL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 86473 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 2 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-01-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 23-12-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 09-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Revised return
• Section: 143(3); 153A; 234B; 147; 148; 154; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : C NEW DELHI BEFORE SHRI J.SUDHAKAR REDDY, ACCOUNTANT MEMBER AND SHRI A.T. VARKEY , JUDICIAL MEMBER ITA NO. 5505/DEL/2013 ASST T. YEAR 2005-06 INDERJEET GULATI, VS. ACIT HOUSE NO. 16, ROAD NO. 19, CENT. CIRCLE 23 EAST PUNJABI BAGH, NEW DELHI. NEW DELHI 110 026. (PAN AALPG3452F) AND ITA NO. 5506/DEL/2013 ASST T. YEAR 2005-06 GOVIND GULATI, VS. ACIT HOUSE NO. 16, ROAD NO. 19, CENT. CIRCLE 23 EAST PUNJABI BAGH, NEW DELHI. NEW DELHI 110 0026. (PAN AALPG3453E) (APPELLANT) (RESPONDENT) APPELLANT BY :SHRI V.S. RASTOGI, AR RESPONDENT :SHRI SATPAL SINGH, SR. DR O R D E R PER J.SUDHAKAR REDDY, ACCOUNTANT MEMBER BOTH THESE APPEALS ARE FILED BY THE ASSES SEE AND ARE DIRECTED AGAINST SEPARATE ORDER OF THE COMMISSIONER OF INCOME TAX (A PPEALS) XXXIII, NEW DELHI DATED 7.6.2013 FOR THE ASSTT. YEAR 2005-06. AS THE ISSUES ARISING IN BOTH THE APPEALS ITA . NOS.5505,5506/DEL/2013 2 ARE IDENTICAL, FOR THE SAKE OF CONVENIENCE, THEY AR E HEARD TOGETHER AND DISPOSED OFF BY WAY OF THIS COMMON ORDER. 2. FACTS IN BRIEF : THE ASSESEEE IS AN INDIVIDU AL AND THEIR ASSESSMENT WAS COMPLETED U/S 153A READ WITH SECTION 143(3) OF THE ACT. SUBSEQUENTLY, THE AO NOTICED THAT INTEREST U/S 234B HAS BEEN SHORT CHARG ED. THEREFORE HE PASSED AN ORDER U/S 154 CHARGING INTEREST U/S 234B W.E.F. 1.2.2007 TILL DECEMBER 2009 I.E FOR THE PERIOD OF 35 MONTHS . THE CONTENTION OF THE ASSESSE E WAS THAT INTEREST U/S 234B IS PAYABLE W.E.F. 1.4.2007 TO 18.12.2009 I.E FOR THE P ERIOD OF 33 MONTHS AND THIS WAS CORRECTLY CHARGED IN THE ASSTT. ORDER PASSED U/S 15 3A READ WITH SECTION 143(3). 3. BOTH PARTIES AGREED THAT THE ISSUE IN QUES TION IS COVERED BY THE DECISION OF A BENCH OF THE TRIBUNAL IN ITA NO. 5510/D/2013 FOR TH E ASSTT. YEAR 2007-08 IN THE CASE OF BUSINESS PARK BUILDERS PVT. LTD. VS. ACIT ORDER DATED 14.11.22014. PARA 7 TO 7.1 HELD AS FOLLOWS :- 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERU SED THE MATERIAL AVAILABLE ON RECORD. IT IS SEEN THAT THE AO VIDE HIS ORDER DA TED 29.12.2009 PASSED U/S 143(3)/153(A) CHARGED INTEREST U/S 234B FOR 14 MONT HS INITIALLY. THEREAFTER, THE SAID ORDER WAS RECTIFIED U/S 154 VIDE ORDER DAT ED 23.3.2012 AFTER SHOW- CAUSING THE ASSESSEE. AS A RESULT THEREOF INTEREST WAS CHARGED U/S 234B FOR 33 MONTHS. THE ASSESSEE IS FOUND TO HAVE OBJECTED B EFORE THE AO (LETTER DATED 5 TH MARCH, 2012 ON RECORD) RELYING UPON THE DECISION O F THE KARNATAKA HIGH COURT IN THE CASE OF SHRI VIJAY KUMAR SABOO (H UF) AND OTHERS VS. ACIT, BANGLORE (CITED SUPRA) HOWEVER BOTH THE AO AND THE CIT(A) REJECTED THE ARGUMENTS OF THE ASSESSEE. BEFORE US IT HAS BEEN CA NVASSED BY THE LD. AR THAT FIRSTLY THE IMPUGNED ORDER IS NOT MAINTAINABLE AS THE RECTIFICATION IS NOT ON THE BASIS OF ANY MISTAKE APPARENT ON THE FACT OF THE RECORD AND SECONDLY THE AO ERRED IN NOT CONSIDERING THE SAID JUDGMENT A ND THE CIT(A) HAS CONCURRED WITH THE AOS FINDING RELYING UPON PARAS 9 & 10 OF THE SAID JUDGMENT INSTEAD OF PARAS 11 & 12 WHICH WERE DIRECT LY APPLICABLE. THESE PARAS READ AS UNDER :- ITA . NOS.5505,5506/DEL/2013 3 11. A HARMONIOUS READING OF THE ENTIRE PROVISION MAKES IT CLEAR THAT IF NO ADVANCE TAX IS PAID OR WHAT IS PAID IS LESS THAN 90% OF THE ASSESSED TAX THE ASSESSEE IS LIABLE TO PAY INTEREST ON THE D IFFERENCE IN THE TAX. FOR THE PURPOSE OF LEVYING TAX IT IS COMPUTED FROM FIRST DAY OF APRIL NEXT FOLLOWING, TILL THE DATE OF DETERMINATION OF T AX UNDER SUBSECTION (1) OF SECTION 143 OR FROM THAT DAY TILL THE DATE O F REGULAR ASSESSMENT. IF IN A GIVEN CASE, THERE IS NO DETERMINATION OF TA X UNDER SUBSECTION (1) OF SECTION 143 OR REGULAR ASSESSMENT AND THE AS SESSMENT IS MADE FOR THE FIRST TIME UNDER SECTION 147, SUCH ASSESSME NT IS ALSO TREATED AS A REGULAR ASSESSMENT AND INTEREST IS PAYABLE FROM T HE FIRST DAY OF APRIL NEXT FOLLOWING TILL THE DATE OF ASSESSMENT ORDER. B UT IF PROCEEDINGS UNDER SECTION 147 IS INITIATED IN A CASE WHERE THER E IS DETERMINATION OF TAX UNDER SUBSECTION (1) OF SECTION 143 OR WHERE A REGULAR ASSESSMENT ORDER IS PASSED UNDER SUBSECTION (3) OF SECTION 143 , THEN, THE ORDER PASSED UNDER SECTION 147 IS TREATED AS AN ORDER OF REASSESSMENT OR RECOMPUTATION. IN THE CASE OF ORDER OF REASSESSMENT OR RECOMPUTATION, THE INTEREST IS LEVIABLE NOT FROM THE FIRST DAY OF APRIL NEXT FOLLOWING, BUT FROM THE DATE OF DETERMINATION OF TAX UNDER SUBSECT ION (1) OF SECTION 148 OR ORDER OF REGULAR ASSESSMENT UNDER SECTION 14 3(8). THEREFORE WHEN THE ASSESSMENT ORDER IS PASSED UNDER SECTION 1 47 AND THAT IS MADE THE BASIS FOR LEVYING INTEREST, THE ASSESSING AUTHORITY HAS TO FIND OUT WHETHER IT IS AN ORDER MADE FOR THE FIRST TIME UNDER SECTION 147 OR IS IT A EASE OF REASSESSMENT OR RECOMPUTATION UNDER SECTION 147. DEPENDING ON THAT FINDING, THE INTEREST IS TO B E C ALCULATED EITHER FROM THE DATE OF FIRST DAY OF APRIL NEXT FOLLOWING SUCH FINANCIAL YEAR OR FROM THE DATE OF DETERMINATION OF TAX UNDER SUBSECTION ( 1) OF SECTION 143 OR REGULAR ASSESSMENT UNDER SECTION 143(3). 12. IN THE INSTANT CASE, THERE WAS A DETERMINATI ON OF TAX UNDER SECTION 143(1)(A) AND RETURN FILED BY THE ASSESSEE DECLARING HIS INCOME AS RS. 30,590/- WAS ACCEPTED BY THE DEPARTMENT BY I TS ORDER DATED 24.6.1991. IT IS THEREAFTER, PROCEEDINGS WERE INITI ATED UNDER SECTION 147 OF THE ACT. IN PURSUANCE OF THE NOTICE ISSUED, REVISED RETURN WAS FILED ON 30.12.1993 DECLARING THE INCOME OF RS. 1,5 0,590/-. IT IS ON THAT RETURN, THE ORDER CAME TO BE PASSED UNDER SECT ION 143(3) ON 28.1.1994. THEREFORE, IT IS NOT A CASE OF ASSESSMEN T MADE FOR THE FIRST TIME. IT IS A CASE OF ORDER OF REASSESSMENT OR RECO MPUTATION UNDER SECTION 147. THEREFORE, THE INTEREST IS TO BE CALCU LATED FROM 24.6.1991, THE DATE ON WHICH DETERMINATION OF TAX WAS MADE UND ER SECTION 143(1)(A) OF THE ACT. TO THAT EXTENT, THE ORDER PAS SED BY THE AUTHORITIES IS ILLEGAL AND REQUIRES TO BE SET ASIDE . HENCE THE SUBSTANTIAL ITA . NOS.5505,5506/DEL/2013 4 QUESTIONS OF LAW (2) AND (4) ARE ANSWERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. APPEALS ARE PARTLY ALLOWED . 7.1 IT HAS ALSO BEEN ARGUED THAT IN THE MATTER W HERE TWO VIEWS ARE POSSIBLE, ONE ADVANCED BY THE AO AND THE OTHER AS C ONSIDERED BY THE HONBLE KARNATAKA HIGH COURT. THIS FACT MAKES THE I SSUE DEBATABLE AND IN SUCH CIRCUMSTANCES ALSO AS PER JUDICIAL PRECEDENT R ECTIFICATION U/S 154 WAS WRONGLY BEEN CARRIED OUT. CONSIDERING THE MATERIAL AVAILABLE ON RECORD IN THE LIGHT OF THE ABOVE ARGUMENTS AND THE DECISION R EFERRED TO BEFORE US FOR OUR CONSIDERATION, WE ARE OF THE VIEW THAT IN THE P ECULIAR FACTS AND CIRCUMSTANCES OF THE CASE, THE IMPUGED ORDER IS NOT CORRECT AND THE RECTIFICATION UPHELD THEREBY IS NOT MAINTAINABLE AS THE SAME IS BEYOND THE PURVIEW OF WHAT CAN BE RECTIFIED U/S 154 OF THE AC T. BEING SATISFIED BY THE EXPLANATION OFFERED THE GROUNDS RAISED BY THE ASSES EE IS ALLOWED. 4. CONSISTENT WITH THE VIEW TAKEN THEREIN, WE ALLOW BOTH THE APPEALS OF THE ASSESSEE. IN THE RESULT, BOTH THE APPEALS OF THE A SSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 5 TH JANUARY, 2015. SD/- SD/- (A.T. VARKEY) (J.SUDHAKAR REDDY) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 5 TH JANUARY, 2015 VEENA COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR 6. GUARD FILE BY ORDER DEPUTY REGISTRAR