J.P . MORGAN SERVICES INDIA P.LTD, MUMBAI V. DCIT (OSD) RG 8(2), MUMBAI

ITA 5859/MUM/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 7820 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 5 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-03-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Assessment Year: 2012-2013
• Appeal Filed On: 19-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ALOK JOHRI
• Keywords: Rectification of order; Reason to believe
• Section: 234B; 115JB; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH J, MUMBAI BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER & SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO.5859/MUM/2014 ASSESSMENT YEAR: 2012-13 JP MORGAN SERVICES INDIA PRIVATE LIMITED, PRISM TOWERS, LEVEL NOS. 9 TO 11, LINK ROAD, MIND SPACE, GOREGAON (WEST) MUMBAI 400 104 PAN: AABCD0503B VS. DCIT OSD RANGE 8(2) MUMBAI (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI DIVESH CHAWLA RESPONDENT BY : SHRI ALOK JOHRI, CIT DR DATE OF HEARING : 14.12.2016 DATE OF PRONOUNCEMENT : 15.03.2017 O R D E R PER AMIT SHUKLA, JUDICIAL MEMBER: THE AFORESAID APPEAL HAS BEEN FILED BY THE ASSESSE E AGAINST IMPUGNED ORDER DATED 25.06.2014, PASSED BY LD. CIT( APPEALS)-17, MUMBAI IN RELATION TO THE ORDER PASSED U/S. 154 OF THE IT ACT, 1961, FOR THE A.Y. 2012-13. 2. THE MAIN GROUNDS URGED BEFORE US BY THE ASSESSE E OUT OF OTHER GROUNDS RAISED IN THE APPEAL ARE AS UNDER: 1. RESTRICTING THE MINIMUM ALTERNATIVE TAX (MAT) CREDIT AND CONFIRMATION OF DEMAND: ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE COMMISSIONER OF INCOME-TAX (APPEALS) -17 (HONBLE CIT(A)) ERRED IN NOT APPRECIATING THE FACTS OF THE APPELLAN TS CASE AND THE POSITION IN LAW ADOPTED BY THE APPELLANT AND TH EREBY DOING THE FOLLOWING: ITA NO.5859/MUM/2014 J P MORGAN SERVICES INDIA PRIVATE L IMITED 2 A. RESTRICTING THE MAT CREDIT UNDER SECTION 115JAA OF THE INCOME-TAX ACT, 1961 (ACT) TO RS.34,38,72,162 (IN STEAD OF RS.70,48,67,942 AS CLAIMED BY THE APPELLANT IN T HE RETURN OF INCOME); AND B. CONFIRMING THE DEMAND TO THE EXTENT OF RS.46,32,69, 200 AS WAS DETERMINED IN RECTIFICATION ORDER DATED FEBR UARY 5, 2014, PASSED UNDER SECTION 154 OF THE ACT BY THE ASSESSING OFFICER (AO). THE APPELLANT PRAYS THAT THE AO BE DIRECTED TO GRAN T THE BALANCE MAT CREDIT OF RS.36,09,95,780 AND CONSEQUEN TLY DELETE THE DEMAND RAISED BY THE APPELLANT. 4. INTEREST UNDER SECTION 234B AND 234C OF THE ACT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE HONBLE CIT(A) ERRED IN CONFIRMING THE ACTION OF TH E AO OF LEVYING INTEREST UNDER SECTION 234B OF THE ACT (OF RS.8,41,65,395) AND 234C OF THE ACT (OF RS.1,86,67, 294). 2. THE BRIEF FACTS, QUA THE ISSUE RAISED BY THE ASSE SSEE, ARE THAT THE ASSESSEE COMPANY HAS FILED ITS RETURN OF INCOME FO R THE AY 2012- 13 ON 29 NOVEMBER 2012 U/S 139(1). THE ASSESSEES F INAL TAX LIABILITY WAS COMPUTED UNDER MAT AS PER THE PROVISIONS OF SECTIO N 115JB OF THE INCOME-TAX ACT, 1961 (ACT) AT RS.1,55,80,39,421/ -. THE ASSESSEE CLAIMED CREDIT OF THE FOLLOWING AGAINST TAX LIABILITY SO ARRIVED AT UNDER SECTION 115JB OF THE ACT AND, ACCORDINGLY, CLAIMED A R EFUND OF RS.5,09,855/- IN THE RETURN OF INCOME: PARTICULARS AMOUNT IN RS. MAT CREDIT SET OFF BROUGHT FORWARD (PERTAINING TO AYS 2006-07 TO 2011-12) AY RS. 2006-07 - 17,25,360 2007-08 - 31,84,802 2008-09 -13,21,94,539 2009-10 - 22,38,91,079 2010-11 - 29,60,35,360 2011-12 - 4,78,36,802 70,48,67,940 TAX DEDUCTED AT SOURCE 7,32,30,744 ADVANCE TAX 77,50,00,000 SELF ASSESSMENT TAX 55,00,000 ITA NO.5859/MUM/2014 J P MORGAN SERVICES INDIA PRIVATE L IMITED 3 THE RETURN OF INCOME WAS PROCESSED AND AN INTIMATION WAS ISSUED TO THE ASSESSEE UNDER SECTION 143(1) OF THE ACT, DATED 23 MAY 2013, WHEREIN THE TOTAL DEMAND PAYABLE BY THE ASSESSEE WAS DE TERMINED AT RS.83,97,11,920/- BY THE AO. 3. THE ASSESSEE AGGRIEVED BY THE ADJUSTMENT FILED A P ETITION FOR RECTIFICATION U/S. 154 BEFORE THE AO STATING THAT THE CRE DIT OF RS.70,48,67,940/- AS CLAIMED IN THE RETURN OF INCOME U/S. 115JAA, PERTAINED TO THE AYS 2010-11 AND 2011-12 HAS NOT BEEN GRANTED AND ALSO THERE IS A CONSEQUENTIAL LEVY OF INTEREST U/S. 23 4B AND 234C AMOUNTING TO RS. 9,93,73,204/- AND RS.3,60,30,036/-. 4. THE LEARNED ASSESSING OFFICER PASSED THE ORDER O N SUCH PETITION, AFTER OBSERVING AND HELD AS UNDER: THE CONTENTION OF THE ASSESSEE IS CAREFULLY GONE T HROUGH AND AFTER VERIFICATION OF THE RECORDS, IT IS SUBMITTED THAT: I. IT IS SEEN THAT THE INCOME OF THE ASSESSEE COMPA NY WAS ASSESSED UNDER NORMAL PROVISIONS OF THE IT ACT FOR THE AY 2006-07, 2007-08, 2008-09 AND 2009-10 AND NO MAT CR EDIT IS AVAILABLE TO THE ASSESSEE FOR THESE YEARS. AS R EQUESTED BY THE ASSESSEE, CREDIT UNDER SECTION 115JAA PERTAININ G TO AY 2010-11 AND AY 2011-12 IS BEING GRANTED TO THE ASSE SSEE COMPANY AMOUNTING TO RS.34,38,72,162/-. II. INTEREST LEVIED UNDER SECTION 234B AND 234C IS LEVIED ACCORDINGLY AS PER TOTAL TAX LIABILITY AND PROVISIO NS OF THE IT ACT, 1961. BEING MISTAKE APPARENT FROM RECORD, THE SAME IS REC TIFIED U/S. 154 OF THE I. T. ACT, 1961. THE ASSESSEE IS G RANTED MAT CREDIT OF RS.34,38,72,162/- U/S. 115JAA OF THE IT A CT AND CALCULATE INTEREST ACCORDINGLY AS PER PROVISIONS OF INCOME TAX ACT. 5. IN THE FIRST APPEAL, THE ASSESSEE SUBMITTED THAT UNDER THE SCOPE AND PROVISIONS OF SECTION 143(1), THE AO WAS RE QUIRED TO GIVE ITA NO.5859/MUM/2014 J P MORGAN SERVICES INDIA PRIVATE L IMITED 4 CREDIT FOR THE TAXES ON THE BASIS OF INFORMATION GIVEN R ETURN OF INCOME AND HE CANNOT LOOK BEYOND THE RETURN OF INCOME FILED BY THE ASSESSEE. IN SUPPORT, CERTAIN DECISIONS WERE ALSO RELIED UPON. HOWEVER, THE LEARNED CIT (A) CONFIRMED THE ORDER OF THE AO ON THE G ROUND THAT NO MAT CREDIT WAS AVAILABLE TO THE ASSESSEE IN THE A.YS. 2 006-07 TO 2009-2010 AND, THEREFORE, HE HAS RIGHTLY DENIED THE CREDIT AND ALSO OBSERVED THAT THE ASSESSEE COULD NOT PRODUCE ANY EVIDEN CE TO SUBSTANTIATE THAT MAT CREDIT WAS AVAILABLE TO THE ASSESSEE FOR THE YEARS UNDER CONSIDERATION. 6. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESS EE SUBMITTED THAT UNDER THE SCOPE AND PROVISIONS OF SECTION 143(1), THE AO COULD NOT HAVE TRAVELLED BEYOND THE RETURN OF INCOME FILED BY THE ASSESSEE AND MAKE ADJUSTMENTS BASED ON SOME OTHER RECORD. THE AO HA S DENIED THE MAT CREDIT ON THE GROUND THAT UNDER THE NORMAL PROVI SIONS OF THE ACT IN THE A.YS. 2006-07 TO 2009-2010, NO MAT CREDIT W AS AVAILABLE DUE TO THE ADDITIONS MADE BY THE AO. HE SUBMITTED THAT FIRSTLY, THIS CANNOT BE THE REASON FOR DENYING THE MAT CREDIT AND SECONDLY, THE ADDITIONS MADE IN THOSE YEARS FINALLY STOOD DELETED B Y THE TRIBUNAL, WHICH VITIATES THE ENTIRE PREMISE OF THE AO. IN SUPPOR T HE FILED THE COPY OF THE TRIBUNAL ORDERS FOR A.Y. 2006-07 AND 20 08-09 BEFORE US. ON THE SCOPE OF ADJUSTMENT MADE U/S. 143(1), HE STRONG LY RELIED UPON THE DECISION OF HONBLE MADRAS HIGH COURT IN THE CASE OF CIT VS. ASIAN PEROXIDES LTD. (2005) 275 ITR 68 AND GUJARAT P ETROSYNTHESE LTD. & ANR. VS. O L RUNGTA AND ORS., [2009] 316 ITR 2 82. 7. ON THE OTHER HAND, LEARNED DR SUBMITTED THAT THE PRE SENT APPEAL HAS BEEN FILED AGAINST ORDER U/S. 154 AND THE INTIMATION U/S. 143(1) NOW STANDS MERGED WITH SECTION 154. THE AO HAS MADE THE ADJUSTMENT U/S 143(1) ON THE BASIS OF MATERIAL AVAILAB LE ON RECORD, WHICH WAS DULY CONSIDERED BY HIM AT THE TIME OF PROCEE DINGS U/S. ITA NO.5859/MUM/2014 J P MORGAN SERVICES INDIA PRIVATE L IMITED 5 154. THE TRIBUNAL ORDER WHICH HAS NOW BEEN FILED BY THE LEARNED COUNSEL WAS NOT AVAILABLE WITH THE AO AND THE BEST COUR SE WOULD BE FOR THE ASSESSEE TO MOVE APPLICATION FOR RECTIFICATION U /S. 154 BEFORE THE AO. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE AL SO PERUSED THE RELEVANT FINDINGS GIVEN IN THE IMPUGNED ORDERS. S ECTION 143(1)(A) PROVIDES FOR ADJUSTMENT TO BE MADE TO THE INCOME OR LO SS DECLARED IN THE RETURN, HOWEVER SAME IS CIRCUMSCRIBED TO ARITHMETICA L ERRORS IN THE RETURN, ACCOUNTS OR DOCUMENTS ACCOMPANYING THE RETUR N OF INCOME WHICH CAN BE RECTIFIED. WHAT COULD BE PRIMA FA CIE ADMISSIBLE OR INADMISSIBLE HAS TO BE DECIDED ON THE BASIS OF INF ORMATION AVAILABLE IN THE RETURN OF INCOME OR THE DOCUMENTS ACC OMPANYING THE SAID RETURN OF INCOME AND NOT FROM THE OTHER RECORDS. T HE RECORD SHOULD PERTAIN TO THE ASSESSMENT YEAR IN QUESTION AND NOT THE EARLIER ASSESSMENT YEARS, AS HAS BEEN UNDERSTOOD BY THE AO WH ILE DENYING THE MAT CREDIT TO THE ASSESSEE. IN THE RETURN OF INCOME TH E ASSESSEE HAS SOUGHT MAT CREDIT OF RS. 70,48,67,942/- WHICH HAS BEEN REDUCED TO RS.34,38,72,162/- ON THE GROUND THAT ASSESSMENT WAS MADE UNDER THE NORMAL PROVISIONS OF THE ACT FOR THE A.YS. 2 006-07 TO 2009- 10 AND, THEREFORE, NO MAT CREDIT IS AVAILABLE TO THE A SSESSEE FOR THESE YEARS. IF THE AO HAD THIS INFORMATION ON RECORD, THEN I T WAS INCUMBENT UPON THE AO TO SELECT THE RETURN OF INCOME FO R SCRUTINY U/S. 143(2), BECAUSE THIS WAS A RECORD PERTAINING TO E ARLIER YEARS ON THE BASIS OF WHICH HE COULD HAVE REASON TO BELIEVE T HAT ASSESSEES CLAIM IN THE RETURN OF INCOME QUA THE MAT CREDIT WAS E XCESSIVE. THUS, WE HOLD THAT THE AO COULD NOT TINKER WITH THE RETU RN OF INCOME UNDER THE SCOPE AND AMBIT OF SECTION 143(1), BECAUSE TH ERE WAS NO ARITHMETICAL ERROR OR ANY MISTAKE TO MAKE ANY ADJUSTMENT WHILE PROCESSING THE RETURN OF INCOME. IN ANY CASE, NOW IT HAS ALREADY BEEN BROUGHT ON RECORD THAT IN THE A.YS 2006-07 TO 2009-2010 THE ITA NO.5859/MUM/2014 J P MORGAN SERVICES INDIA PRIVATE L IMITED 6 ADDITIONS MADE UNDER THE NORMAL PROVISIONS, WHICH WAS THE GROUND TO MAKE THE ADJUSTMENTS BY THE AO, STANDS DELETED AND, THE REFORE, THE ASSESSEES COMPUTATION IN THOSE YEARS WOULD BE MAD E UNDER THE MAT PROVISIONS AND CONSEQUENTLY, THE ASSESSEE WOULD B E ELIGIBLE FOR MAT CREDIT U/S. 115JAA. ACCORDINGLY, THE GROUND RAISE D BY THE ASSESSEE IS ALLOWED. 9. THE ISSUE PERTAINING TO CHARGING OF INTEREST UNDER SECTIONS 234B AND 234C WILL ALSO GO IN FAVOUR OF THE ASSESSEE, BEC AUSE THEY ARE PURELY CONSEQUENTIAL. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOW ED. ORDER PRONOUNCED IN THE OPEN COURT ON 15 TH MARCH, 2017. SD/- SD/- (RAJESH KUMAR) (AMIT SHUKLA) ACCOUNTANT MEMBER JUD ICIAL MEMBER MUMBAI, DATED: 15.03.2017. SA COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR J BENCH //TRUE COPY// BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, MUMBAI