ACIT, Ludhiana V. M/s Vardhman Textiles Limited, Ludhiana

ITA 553/CHANDI/2015

• Counselvise Citation: 55321514 RSA 2015
• Duration Of Justice: 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 20-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Assessee Lawyers: SUBHASH AGGARWAL; VINEET J AIN
• Keywords: Tangible material
• Section: 148; 154; 2; 143(3); 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI H.L.KARWA, VICE PRESIDENT AND MS. RANO JAIN, ACCOUNTANT MEMBER ITA NO.553/CHD/2015 (ASSESSMENT YEAR : 2007-08) THE A.C.I.T., VS. M/S VARDHMAN TEXTILES LIMITED, CIRCLE-1, CHANDIGARH ROAD, LUDHIANA. LUDHIANA. PAN: AABCM4692E (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S.K.MITTAL, DR RESPONDENT BY : S/SHRI SUBHASH AGGARWAL & VINEET JAIN DATE OF HEARING : 31.08.2015 DATE OF PRONOUNCEMENT : 04.09.2015 O R D E R PER RANO JAIN, A.M . : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-I, LUDHIANA DATED 23.2.2015 FOR ASSESSMEN T YEAR 2007-08. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE FILED RETURN OF INCOME FOR ASSESSMENT YEAR 2007-08 DECLAR ING TOTAL INCOME OF RS.1,36,28,61,170/- AND SUBSEQUENTLY REVI SED THE SAME TO RS.1,37,10,52,040/-. THE ASSESSMENT WAS CO MPLETED 2 UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (I N SHORT THE ACT) VIDE ORDER DATED 31.12.2009. AS PER THIS ORDER, A DEMAND OF RS.54,55,90,126/- WAS RAISED. THEREAFTE R AN ORDER UNDER SECTION 143(3) R.W.S. 147 OF THE ACT W AS MADE AS ON 9.8.2010 RAISING THE DEMAND OF RS.56,58,43,287/- . IN THIS ORDER, THE ASSESSING OFFICER WHILE DETERMINING THE TAX PAYABLE CALCULATED INTEREST UNDER SECTION 234B OF THE ACT F OR EIGHT MONTHS ON THE AMOUNT OF DIFFERENCE BETWEEN TAX LIAB ILITY DETERMINED ON RE-ASSESSMENT AND THE AMOUNT OF TAXES PRE- PAID BY THE ASSESSEE. THE ASSESSEE FILED AN APPLI CATION UNDER SECTION 154 OF THE ACT RAISING A CONTENTION T HAT THE INTEREST UNDER SECTION 234B OF THE ACT WAS TO BE CO MPUTED ON THE DIFFERENTIAL AMOUNT OF TAXES AS DETERMINED ON R E- ASSESSMENT AND THAT ALREADY DETERMINED UNDER SECTIO N 143(3) OF THE ACT AND NOT THE AMOUNT OF PRE-PAID TAXES BY THE ASSESSEE. HOWEVER, SAID APPLICATION UNDER SECTION 154 OF THE ACT WAS REJECTED BY THE ASSESSING OFFICER VIDE ORDE R DATED 6.12.2010. 3. THE ASSESSEE WENT IN APPEAL BEFORE THE LEARNED CIT (APPEALS) AND RAISED THE SAID GROUND BEFORE HIM. THE LEARNED CIT (APPEALS) AFTER ANALYZING THE SUBMISSIONS MADE BY THE ASSESSEE ALLOWED THE APPEAL OF THE ASSESSEE AND DIR ECTED THE ASSESSING OFFICER TO MAKE THE COMPUTATION OF INTERE ST UNDER SECTION 234B OF THE ACT AS DESIRED BY THE ASSESSEE. THE FINDING OF THE LEARNED CIT (APPEALS) ARE RECORDED A T PAGE 4 IN PARA 4 OF HIS ORDER, WHICH READS AS UNDER : 3 4. I HAVE CONSIDERED THE FACTS OF THE CASE, THE BA SIS OF LEVYING INTEREST U/S 234B, ARGUMENTS OF THE AR DURIN G THE COURSE OF ASSESSMENT AS WELL AS APPELLATE PROCEEDINGS AND IT IS SEEN THAT THE PROVISIONS OF SECTION 234B MAKE IT ABUNDANTLY CLEAR THAT THE AMOUNT OF TAX DETERMINED IN REGULAR ASSESS MENT HAS TO BE REDUCED FOR IMPOSITION OF INTEREST U/S 234B, TH EREFORE, CLAIM OF THE APPELLANT IN THIS REGARD IS LEGALLY CORRECT AND THE A.O. IS DIRECTED TO ENTERTAIN THE SAME. 4. NOW, THE DEPARTMENT HAS COME UP IN APPEAL BEFOR E US RAISING THE FOLLOWING GROUNDS OF APPEAL : 1. WHETHER IN THE LAW AND CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) HAS ERRED IN ALLOWING THE BASIS OF CHARGING OF INTEREST U/S 234B STATING THAT AMOUNT O F TAX DETERMINED IN REGULAR ASSESSMENT HAS TO BE REDU CED FROM THE TAX DETERMINED ON RE-ASSESSMENT WHILE THE AO HAD RIGHTLY CHARGED THE INTEREST ON THE AMOUNT O F DIFFERENCE BETWEEN TAX LIABILITY DETERMINED ON RE- ASSESSMENT AND AMOUNT OF TAXES PREPAID BY THE ASSESSEE. 2. THAT THE ORDER OF THE LD. CIT(A) BE SET ASIDE AN D THAT OF THE ASSESSING OFFICER BE RESTORED. 3. THAT THE APPELLANT CRAVES LEAVE TO ADD OR AMEND ANY GROUND OF APPEAL BEFORE IT IS FINALLY DISPOSED OFF. 5. THE LEARNED D.R. WHILE ARGUING BEFORE US RELIED UPON THE ORDER OF THE ASSESSING OFFICER AND PRAYED TO SU STAIN THE SAME. 6. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE LEARNED CIT (APPEALS). FURTHER, HE SUBMITTED THAT THE RE-ASSESSMENT PROCEEDINGS THE DEMAND ARISING WHEREFROM IS SUBJECT MATTER OF PRESENT APPE AL HAVE 4 BEEN QUASHED BY THE ITAT, CHANDIGARH BENCH IN ITA NO.1430/CHD/2010 DATED 31.3.2011 (WRONGLY WRITTEN A S 31.3.2010 IN THE ORDER ). THIS ORDER WAS SHOWN TO US TO PLEAD THAT SINCE THE ASSESSMENT ITSELF HAS BEEN QUA SHED, NO DEMAND IN PURSUANCE OF THAT CAN BE MADE AND THE QUE STION OF IMPOSING INTEREST UNDER SECTION 234B OF THE ACT DOE S NOT ARISE. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. ON PERUSAL OF THE O RDER OF THE ITAT, CHANDIGARH BENCH, IT IS SEEN THAT THE RE-ASSE SSMENT PROCEEDINGS INITIATED BY ISSUING NOTICE UNDER SECTI ON 148 OF THE ACT IN THIS CASE HAVE BEEN QUASHED BY THE ITAT, CHANDIGARH BENCH. THE FINDINGS OF THE ITAT, CHAND IGARH BENCH ARE RECORDED AT PAGE 13 PARA 17 OF THE ORDER, WHICH READ AS UNDER : 17. IN THE TOTALITY OF FACTS AND CIRCUMSTANCE S AS ENUMERATED ABOVE AND FOLLOWING THE RATIO LAID DOWN BY HON'BLE SUPREME COURT IN CIT VS. KE LVINATOR OF INDIA LTD (SUPRA), HON'BLE DELHI HIGH COU RT IN LEGATO SYSTEMS (INDIA) (P) LTD VS DCIT (SUPRA), HON'BLE BOM BAY HIGH COURT IN AVENTIS PHARMA LTD VS. JCIT (SUPRA, AND IN THE ABSENCE OF ANY TANGIBLE MATERIAL COMING TO T HE POSSESSION OF THE ASSESSING OFFICER, IN FORMATION OF A REASON TO BELIEF THAT INCOME HAD ESCAPED ASSESSMENT , THE AFORESAID EXERCISE OF POWER BY THE ASSESSING OF FICER IN REOPENING THE ASSESSMENT PROCEEDINGS UNDER SECT ION 147/148 OF THE ACT IN THE PRESENT CASE IS UNJ USTIFIED. 5 HENCE, THE ORDER OF THE ASSESSING OFFICER IN INVOKING THE JURISDICTION U/S 147 OF THE ACT IS HEREBY QUASHED. 8. IN VIEW OF THE ABOVE, WE COME TO A CONCLUSION T HAT RE-ASSESSMENT PROCEEDINGS ITSELF HAVING BEEN QUASHE D BY THE ITAT, CHANDIGARH BENCH, THE DEMAND IN PURSUANCE OF THE SAME ALSO DOES NOT STAND. THE QUESTION OF IMPOSIN G INTEREST UNDER SECTION 234B OF THE ACT DOES NOT ARISE. EVEN THE CONSEQUENTIAL RELIEF AFTER THE EFFECT OF THE SAID O RDER OF THE ITAT, CHANDIGARH BENCH HAS BEEN GIVEN TO THE ASSESS EE. IN VIEW OF THIS, THE ISSUE OF COMPUTATION OF INTEREST UNDER SECTION 234B OF THE ACT REMAINS ACADEMIC IN NATURE. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 4 TH DAY OF SEPTEMBER, 2015. SD/- SD/- (H.L.KARWA) (RANO JAIN) VICE PRESIDENT ACOUNTANT MEMBER DATED : 4 TH SEPTEMBER, 2015 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH 6