THE ACIT 1(3), MUMBAI V. M/S. THE WEST COAST PAPER MILLS LTD, MUMBAI

ITA 5710/MUM/2008

• Counselvise Citation: 571019914 RSA 2008
• Duration Of Justice: 5 year(s) 8 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-05-2014
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: G
• Next Hearing Date: 08-04-2014
• Assessment Year: 1998-1999
• Appeal Filed On: 09-09-2008
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: K C P PATNAIK
• Section: 244A; 154

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI . . , , , BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA , JUDICIA L MEMBER . / ITA NO. 5710 /MUM./ 2008 ( / ASSESSMENT YEAR : 1998 99 ) ASSTT . COMMISSIONER OF INCOME TAX CIRCLE 1 (3 ), AAYAKAR BHAVAN 101, M.K. ROAD, MUMBAI 400 020 .. / APP ELLANT V/S THE WEST COAST PAPER MILLS LTD. SHREENIWAS HOUSE HAZARIMAL SOMANI MARG FORT, MUMBAI 400 001 .... / RESPONDENT ./ PERMANENT ACCOUNT NUMBER AAACT4179N / ASSESSEE BY : MR. VIJAY MEHTA / RE VE NUE BY : MR. K.C.P. PATNAIK / DATE OF HEARING 08.04.2014 / DATE OF ORDE R 30.05.2014 / ORDER , / PER AMIT SHUKLA , J.M. THE PRESENT APPEAL HAS BEEN PREFERRE D BY THE REVENUE CHALLENGING THE IMPUGNED ORDER DATED 12 TH JUNE 2008, PASSED BY THE LEARNED COMMISSIONER (APPEALS) XIII & XIV, MUMBAI, FOR THE QUANTUM OF ASSESSMENT PASSED UNDER SECTION 154 OF THE INCOME TAX ACT, 1961 THE WEST COAST PAPER MILLS LTD. 2 (FOR SHORT 'THE ACT') FOR THE ASSESSME NT YEAR 1998 99, ON THE FOLLOWING GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(A) ERRED IN DIRECTING THE ASSESSING OFFICER TO ALLOW INTEREST UNDER SECTION 244A ON REFUND ARISING OUT OF THE SELF ASSESSMENT TAX PAYMENTS. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(A) ERRED IN DIRECTING THE ASSESSING OFFICER TO RECOMPUTED INTEREST UNDER SECTION 244A WITHOUT DEDUCTING MAT CREDIT FROM THE REFUND ARISING OUT OF ADVANCE TAX AND TDS . 2 . FACTS IN BRIEF : THE ASSESSEE, FOR THE ASSESSMENT YEAR 1998 99, HAS PAID SELF ASSESSMENT TAX AMOUNTING TO ` 40 LAKHS ON 28 TH AUGUST 1998 AND ` 7,81,853 ON 24 TH NOVEMBER 1998. THE ASSESSING OFFICER, WHILE GRANTING REFUND, HAS NOT GRANTED INTEREST ARIS ING OUT OF THE PAYMENT OF SELF ASSESSMENT TAX. THE LEARNED COMMISSIONER (APPEALS), AFTER FOLLOWING THE DECISION OF THE TRIBUNAL, MUMBAI BENCH, IN DCIT V/S B . S . E . S . L IMITED , [2008] 113 TTJ 227 (MUM.) AND ACIT V/S GRINDWELL NORTON LTD. , [2000] 100 ITD 245 (M UM.), DIRECTED THE ASSESSING OFFICER TO ALLOW INTEREST UNDER SECTION 244A ON THE REFUND ARISING OUT OF SELF ASSESSMENT TAX PAYMENTS. 3 . BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THIS ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE IN AS SESSEES OWN CASE IN ITA NO.268/MUM./2009, ORDER DATED 20 TH NOVEMBER 2009, FOR THE ASSESSMENT YEAR 2006 07. BESIDES THIS, THE ISSUE IS ALSO COVERED BY VARIOUS OTHER DECISIONS. 4 . THE LEARNED DEPARTMENTAL REPRESENTATIVE, ON THE OTHER HAND, ADMITTED THAT THIS ISSUE IS COVERED AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE IN ASSESSEES OWN CASE. HOWEVER, HE STRONGLY RELIED UPON THE ORDER OF THE ASSESSING OFFICER. THE WEST COAST PAPER MILLS LTD. 3 5 . AFTER CAREFULLY CONSIDERING THE RIVAL SUBMISSIONS, WE FIND THAT THIS ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2006 07 CITED SUPRA. OTHERWISE ALSO, NOW IT HAS BEEN SETTLED BY VARIOUS COURTS THAT THE ASSESSEE IS ENTITLED TO INTEREST UNDER SECTION 244A ON THE REFUND OF SELF ASSESSM ENT TAX PAID UNDER SECTION 140A. THIS HAS BEEN HELD SO BY THE DELHI HIGH COURT IN CIT V/S SUTLEJ INDUSTRIES LTD., [2010] 325 ITR 331 (DEL.) AND THE DECISION OF THE HON'BLE SUPREME COURT IN CIT V/S H.E.G. LIMITED, [2010] 228 CTR 495 (SC). THUS, THE FINDING OF THE LEARNED COMMISSIONER (APPEALS) ON THIS GROUND IS UPHELD AND GROUND RAISED BY THE REVENUE IS DISMISSED. 6 . IN GROUND NO.2, THE REVENUE HAS CHALLENGED THE LEARNED COMMISSIONER (APPEALS)S DIRECTION TO GRANT INTEREST UNDER SECTION 244A ON THE REFUND ARIS ING AFTER GIVING CREDIT FOR BROUGHT FORWARD MINIMUM ALTERNATE TAX (MAT). 7 . THE ASSESSEE WAS ENTITLED TO REFUND OF ` 65,11,299, IN PURSUANCE OF THE ORDER DATED 21 ST MARCH 2007, WHICH WAS THE ORDER GIVING EFFECT TO THE ORDER OF THE TRIBUNAL. THE SAID REFUND W AS ARISING OUT OF TDS AND ADVANCE TAX PAYMENT. HOWEVER, THE ASSESSING OFFICER, WHILE COMPUTING INTEREST UNDER SECTION 244A, HAS REDUCED THE MAT CREDIT OF ` 28,76,504 FROM THE REFUND OF ` 65,11,299. 8 . BEFORE THE LEARNED COMMISSIONER (APPEALS), IT WAS SUBMITT ED BY THE ASSESSEE THAT THE MAT CREDIT IS THE FIRST AMOUNT WHICH IS SET OFF AGAINST THE TAX PAYABLE AND NOT AFTER THE ADVANCE TAX AND TDS. IN SUPPORT OF THIS PROPOSITION, VARIOUS TRIBUNAL DECISIONS WERE RELIED UPON. THE LEARNED COMMISSIONER (APPEALS), AFTE R ACCEPTING THE ASSESSEES CONTENTION, DIRECTED THE ASSESSING OFFICER TO RE COMPUTE THE INTEREST THE WEST COAST PAPER MILLS LTD. 4 UNDER SECTION 244A WITHOUT DEDUCTING MAT CREDIT FROM THE REFUND ARISING OUT OF ADVANCE TAX ON TDS. 9 . THE LEARNED COUNSEL , BEFORE US, SUBMITTED THAT THIS ISSUE NOW STANDS COVERED BY THE CATENA OF CASE LAWS, SOME OF WHICH ARE AS UNDER: I ) CIT V/S APAR INDUSTRIES LTD., 323 ITR 411 (BOM.) ; II ) CIT V/S BHARAT ALUMINIUM CO. LTD., 242 CTR 366 (DEL.) ; III ) HYUNDAI MOTOR INDIA LTD. V/S DCIT, [127 TTJ 123 (CHEN.) ; AND IV ) PUDUMJEE PULP & PAPER MILLS LTD. V/S ACIT, 118 TTJ 280 (PUNE). 10 . LEARNED DEPARTMENTAL REPRESENTATIVE , ON EH OTHER HAND, RELIED UPON THE CONCLUSION OF THE ASSESSING OFFICER. 11 . WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE CASE LAWS RELIED UPON BY THE LEARNED COUNSEL FOR THE ASSESSEE. THE MAT CREDIT IS AVAILABLE FOR ADJUSTMENT AND SET OFF ON THE FIRST DATE OF THE PREVIOUS YEAR EVEN BEFORE THE INSTALLMENT OF ADVANCE TAX IS DUE ON THE CURRENT INCOME. ACCORDINGLY, THE ADVANCE TAX LIABILITY HAS TO BE WORKED OUT ON THE CURRENT INCOME ONLY AFTER THE ADJUSTMENT OF SET OFF OF MAT CREDIT BROUGHT FORWARD FROM THE EARLIER YEARS. THE ASSESSING OFFICER, AT THE FIRST INSTANCE, HAS TO SET OFF THE MAT CREDIT OUT OF THE INCOME TAX WORKED OUT ON THE TOTAL ASSESSABLE INCOME AND THEN AT THE S ECOND INSTANCE , GIVE CREDIT OF ADVANCE TAX PAID BY THE ASSESSEE AS WELL AS THE TDS. THUS, WHAT BECOME PAYABLE TO THE ASSESSEE AS A REFUND IS ON ACCOUNT OF ADVANCE TAX PAID IN EXCESS AND, THEREFORE, THE INTEREST UNDER SECTION 244A HA S TO BE ALLOWED. THIS IS ALSO CLEAR FROM THE EXPRESS PROVISIONS OF SECTION 115JAA, WHICH HAS BEEN BROUGHT IN THE STATUTE FOR THE PURPOSE OF ADJUSTMENT AND SET OFF MAT CREDIT IN RESPECT OF THE TAX PAID BY THE ASSESSEE IN THE EARLIER YEARS ON THE INCOME WHICH WAS NOT OTHERWISE TAXA BLE UNDER THE ACT. THIS PROPOSITION OF LAW HAS THE WEST COAST PAPER MILLS LTD. 5 BEEN UPHELD BY THE JURISDICTIONAL HIGH COURT IN APAR INDUSTRIES LTD. (SUPRA) AND ALSO BY THE DELHI HIGH COURT IN BHARAT ALUMINUM CO. LTD. (SUPRA). THUS, THE INTEREST U/S 244 IS PAYABLE TO THE ASSESSEE IF THE A DVANCE TAX PAID IS IN EXCESS OF MAT CREDIT AND, THEREFORE, THE LEARNED COMMISSIONER (APPEALS) HAS RIGHTLY DIRECTED THE ASSESSING OFFICER TO R E COMPUTE THE INTEREST U /S 244A WITHOUT DEDUCTING MAT FROM THE REFUND ARISING OUT OF ADVANCE TAX AND TDS. GROUND NO. 2 IS THUS DISMISSED. 12 . 1 2 . IN THE RESULT, REVENUES APPEAL IS DISMISSED. 30 TH MY 2014 ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH MY 2014 SD/ - . . N.K. BILLAIYA ACCOUNTANT MEMBE R SD/ - AMIT SHUKLA JUDICIAL MEMBER MUMBAI, DATED : 30 TH MY 2014 / COPY OF THE ORDER FORWARDED TO : ( 1 ) / THE ASSESSEE ; ( 2 ) / THE REVENUE; ( 3 ) ( ) / THE CIT(A ) ; ( 4 ) / THE CIT, MUMBAI CITY CONCERNED ; ( 5 ) , , / THE DR, ITAT, MUMBAI ; ( 6 ) / GUARD FILE . / TRUE COPY / BY ORDER . / PRADEEP J. CHOWDHURY / SR. PRIVATE SECRETARY / / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI