ITO-1(1)(1), MUMBAI V. ASHOK ALCO-CHEM LTD, MUMBAI

ITA 5795/MUM/2011

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 71031 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-09-2013
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 05-03-2013
• Assessment Year: 1997-1998
• Appeal Filed On: 16-08-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MRS BHAVNA YASHROY
• Assessee Lawyers: KI SHOR I MEHTA
• Keywords: Revised return
• Section: 143(3); 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUM BAI .. , , BEFORE SHRI I.P. BANSAL, JM AND SHRI SANJAY ARORA, AM ./ I.T.A. NO.5795/M/2011 ( / ASSESSMENT YEAR: 1997-98) ITO-1(1)(1), ROOM NO. 534/579, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400 020 / VS. ASHOK ALCO-CHEM LTD., 404, SHARDA CHAMBERS, NEW MARINE LINES, MUMBAI- 400 020. ./ ./PAN/GIR NO. AAACA 6876 H ( ! /APPELLANT ) : ( '#! / RESPONDENT ) ! $ / APPELLANT BY : MRS. BHAVNA YASHROY '#! % $ / RESPONDENT BY : SHRI KISHOR I. MEHTA & '() % *+ / DATE OF HEARING : 26.08.2013 ,-. % *+ / DATE OF PRONOUNCEMENT : 06.09.2013 / / O R D E R PER SANJAY ARORA, A. M.: THIS IS AN APPEAL BY THE REVENUE DIRECTED AGAINST T HE ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS)-I, MUMBAI (CIT(A) FOR SHO RT) DATED 04.05.2011, PARTLY ALLOWING THE ASSESSEES APPEAL CONTESTING THE RECT IFICATION OF ITS ASSESSMENT U/S.143(3) R.W.S. 254 OF THE INCOME TAX ACT, 1961 (THE ACT H EREINAFTER) DATED 24.12.2009 FOR THE ASSESSMENT YEAR (A.Y.) 1997-98, VIDE ORDER U/S.154 DATED 20.07.2010. 2 ITA NO. 5795 /MUM/2011 (A.Y. 1997-98) ITO VS. ASHOK ALCO-CHEM LTD. 2. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATER IAL ON RECORD. THE APPEAL RAISES A SINGLE GROUND; THE SOLE ISSUE INVOLVED IS THE VALID ITY IN LAW OF THE LEVY OF INTEREST UNDER SECTION 220(2) OF THE ACT BY THE ASSESSING OFFICER (A.O.) IN THE SUM OF RS.45,75,897/-, DETAILED AS UNDER: WORKING OF INTEREST U/S. 220(2) INTEREST U/S.220(2) ON RS.34,99,730/- (RS.5,34,764 + RS.27,95,699 + RS.1,69,267) 4/00 TO 5/01 14 MONTHS @ 1.5% P.M. = RS.7,34,943 /- 6/01 TO 8/03 27 MONTHS @ 1.25% P.M. = RS.11,81,15 9/- 903 TO 12/9 76 MONTHS @ 1.00% P.M. = RS.26,59,795 /- RS.45,75,897/- 3. THE SAME STANDS DELETED BY THE LEARNED CIT(A) ON THE BASIS THAT THE ASSESSEE HAS BEEN ISSUED A FRESH DEMAND NOTICE ON 24.12.2009 . AS SUCH, IT IS ONLY THE NON-DISCHARGE OF THE DEMAND SO RAISED WHICH WOULD RESULT IN THE ASSE SSEE BEING CONSIDERED AS IN DEFAULT AND, ACCORDINGLY, LIABLE TO CHARGE OF INTEREST U/S. 220(2) OF THE ACT FOR THE DELAYED DISCHARGE THEREOF, I.E., FOR THE PERIOD FALLING BEY OND 30 DAYS OF ITS SERVICE. THE ASSESSMENT IN THE INSTANT CASE HAS HAD A CHEQUE RED HISTORY; THE SAME HAVING BEEN COMPLETED IN THE FIRST INSTANCE UNDER SECTION 143(3) ON 30.03.2000 (REFER PARA 1 OF THE ASSESSMENT ORDER DATED 24.12.2009). THE CLAIM U /S.80-IA QUA THE PROFIT OF THE BIOGAS UNIT BEING DISPUTED, THE MATTER WAS CARRIED IN APPE AL, AND ORDER U/S.143(3) R.W.S. 250 PASSED ON 22.02.2001. THE REVENUE ENTERTAINING REAS ONS TO BELIEVE THE INELIGIBILITY OF THE ASSESSEES CLAIM FOR DEDUCTION U/S.80-IA QUA ITS ACETIC ACID UNIT, THE ASSESSMENT WAS SUBJECT TO REASSESSMENT. THE MATTER TRAVELLED TO TH E TRIBUNAL, WHICH RESTORED THE MATTER BACK TO THE FILE OF THE A.O. VIDE ITS ORDER DATED 0 8.04.2008, WITH A DIRECTION TO DECIDE THE ISSUE IN ACCORDANCE WITH ITS DIRECTIONS IN THE ASSE SSEES OWN CASE FOR A.Y. 1998-99 PER ORDER DATED 30.08.2004 (IN ITA NO. 2480/MUM/2001, R EPORTED AT 96 ITD 160 (MUM)). THE INSTANT ASSESSMENT IS FRAMED PURSUANT TO THE SA ID ORDER. THE SAME, AS CLARIFIED BY THE LD. AR BEFORE US, HAS ATTAINED FINALITY ON ITS ACCE PTANCE BY THE ASSESSEE. A FRESH DEMAND 3 ITA NO. 5795 /MUM/2011 (A.Y. 1997-98) ITO VS. ASHOK ALCO-CHEM LTD. NOTICE BEING ISSUED CONSEQUENT TO EACH REVISION, SE VERAL DEMAND NOTICES STAND, THUS, ISSUED FROM TIME TO TIME, AS DATED 30.03.2000, 22.0 2.2001, 22.09.2003, 15.03.2004, 09.08.2004 AND, FINALLY, ON 24.12.2009. IN FACT, TH ERE ARE A NUMBER OF DEMAND NOTICES ON RECORD. THE LD. AR WOULD ADMIT BEFORE US THAT THERE HAS BEEN NO PAYMENT OF TAX EXCEPT BY WAY OF SELF ASSESSMENT TAX, I.E., AFTER THE FILI NG OF THE REVISED RETURN ON 05.06.1998 . IN FACT, WE OBSERVE THAT THE INCOME HAS BEEN FINALLY A SSESSED AT RS.78.44 LACS , AS AGAINST RS.56.63 LACS ORIGINALLY RETURNED (ON 27.11.1997) AND THE REVISE D INCOME AT RS.19.26 LACS , WHICH THOUGH STOOD ASSESSED BY RESTRICTING THE AS SESSEES CLAIM U/S. 80-IA BY RS. 40.39 LACS. THE APEX COURT IN VIKRANT TYRES LTD. V. FIRST ITO [2001] 247 ITR 821 (SC) HAS CLARIFIED THAT WHERE A DEMAND IS DISCHARGED THROUGH PAYMENT WITHIN THE PRESCRIBED TIME, THE SAME WOULD NOT STAND TO BE REVIVED, I.E., FROM AN EARLIER DATE, ON THE CONFIRMATION OF THE DEMAND IN APPEAL, SO AS TO ENTITLE THE REVENUE TO INTEREST U/S. 220(2) FROM THE SAID EARLIER DATE. HOWEVER, WHERE THE SAME IS SATISFIED THROUGH, SAY, A REVISION, LEADING TO A REDUCTION IN THE ASSESSED INCOME, THE ORIGINAL DEMA ND WOULD STAND RESTORED UPON THE SAID REVISION BEING REVERSED. IT IS, THEREFORE, APPARENT LY INCORRECT ON THE PART OF THE LD. CIT(A) TO STATE THAT THE DEFAULT IS ONLY IN RESPECT OF THE DEMAND NOTICE DATED 24.12.2009. AGAIN, WE ARE ALSO UNABLE TO UNDERSTAND AS TO HOW INTEREST U/S.220(2) HAS BEEN CHARGED W.E.F. APRIL, 2000 ON THE INTEREST COMPONENT OF THE DEMAND FOR THE PERIOD SUBSEQUENT THERETO, AS ON INTEREST U/S. 234B, WHICH HAS BEEN WORKED OUT UP TO DECEMBER, 2009 (AT RS.27.96 LACS). THE SAID INTEREST WOULD GET CRYSTALLIZED IN TERMS OF THE DEMAND NOTICE, AND WHERE- AFTER ONLY INTEREST U/S. 220(2), ON THE DEMAND REMA INING UNSATISFIED, SHALL ARISE. THERE WOULD BE, THUS, NO OVERLAPPING OF INTEREST U/S.234B (SAY) AND THE INTEREST U/S. 220(2), WHICH ARISES ONLY ON A DEMAND, VALIDLY RAISED, BEIN G NOT DISCHARGED WITHIN THE PRESCRIBED TIME. 4. UNDER THE CIRCUMSTANCES, THEREFORE, IT IS CLEAR THAT ALL THE FLUCTUATIONS IN DEMAND OVER TIME, SAVE THOSE DISCHARGED THROUGH PAYMENT, W OULD GET RESTORED FROM AN ANTERIOR DATE, I.E., WHEN FIRST RAISED. NEITHER THE WORKING BY THE AO NOR THE REASON GIVEN BY LD. 4 ITA NO. 5795 /MUM/2011 (A.Y. 1997-98) ITO VS. ASHOK ALCO-CHEM LTD. CIT(A) IN DELETING THE IMPUGNED LEVY, IS CORRECT AN D, THEREFORE, SUSTAINABLE IN LAW. THE MATTER WOULD THEREFORE HAVE TO BE RESTORED TO THE F ILE OF THE AO FOR WORKING THE SAME AFRESH, OF COURSE AFTER HEARING THE ASSESSEE AND CO NSIDERING ITS OBJECTIONS. IT IS ONLY THE DEMAND THAT REMAINS UNPAID BEYOND 30 DAYS OF THE SE RVICE OF THE DEMAND NOTICE THAT WOULD ATTRACT INTEREST UNDER SECTION 220(2) OF THE ACT. THE INTEREST U/SS. 234B AND 234C IS TO BE WORKED OUT SEPARATELY, ON SIMPLE INTEREST BAS IS, AS IS THE INTEREST U/S. 220(2). ALSO, ANY PAYMENT HAS BEEN MADE BY THE ASSESSEE IN DISCHA RGE OF THE DEMAND, I.E., AS ACCRUED BY THAT DATE, THE SAME HAS TO BE UNDER LAW ADJUSTED FIRST AGAINST THE INTEREST UNDER SECTIONS 234A/234B/234C AND ONLY THE BALANCE AMOUNT, IF ANY, IS TO BE ADJUSTED ON ACCOUNT OF UNPAID TAX. WE, THEREFORE, RESTORE THE MATTER BACK TO THE FILE OF THE A.O. TO COMPUTE THE INTEREST U/S. 220(2) IN ACCORDANCE WITH LAW, AS EXP LAINED BY THE APEX COURT IN VIKRANT TYRES LTD. (SUPRA), ABUNDANTLY CLARIFYING THE LAW, WITH EVEN I TS PROVISIONS BEING CLEAR AND EXPLICIT IN THE MATTER. FURTHER, IN THIS VIEW OF TH E MATTER, THE ASSESSEES RELIANCE ON THE DECISION IN THE CASE OF ITO V . VOLKART BROS. [1971] 82 ITR 50 (SC) WOULD BE TO NO MOMENT. BEFORE PARTING WITH THE MATTER, WE MAY ADD THAT, AS EXPLAINED BY THE APEX COURT IN THE CASE OF KALYANKUMAR RAY V. CIT [1991] 191 ITR 634 (SC), THE COMPUTATION OF TAX, AND THE RAISING OF DEMAND THEREBY, IS AN INTEGRAL P ART OF THE ASSESSMENT OF INCOME AND THE ASSESSMENT ORDER. THE ISSUE RAISED BY THE ASSESSEE IS THUS APPEALABLE U/S. 246A AND, CONSEQUENTLY, U/S. 253 OF THE ACT. 5. IN THE RESULT, THE APPEALS BY THE REVENUE ARE AL LOWED FOR STATISTICAL PURPOSES. 0.*1 ( % 2% 345 6 ( 7 * % * 89 ORDER PRONOUNCED IN THE OPEN COURT ON SEPTEMBER 06, 2013 SD/- SD/- ( I.P. BANSAL ) (SANJAY ARORA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER & ) MUMBAI; :' DATED : 06 .09.2013 A. K. PATEL, PS 5 ITA NO. 5795 /MUM/2011 (A.Y. 1997-98) ITO VS. ASHOK ALCO-CHEM LTD. ! ' #$%& ' &$ / COPY OF THE ORDER FORWARDED TO : 1. ! / THE APPELLANT 2. '#! / THE RESPONDENT 3. & ;* ( ) / THE CIT(A) 4. & ;* / CIT CONCERNED 5. >(?@ '*'AB , + AB. , & ) / DR, ITAT, MUMBAI 6. @CD E) / GUARD FILE ! ( / BY ORDER, )/(* + (DY./ASSTT. REGISTRAR) , & ) / ITAT, MUMBAI