AATUR HOLDING P.LTD, MUMBAI V. DCIT CEN CIR 31, MUMBAI

ITA 598/MUM/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 7843 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 2 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 20-02-2017
• Assessment Year: 1992-1993
• Appeal Filed On: 29-01-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR YADAV
• Keywords: Opportunity of being heard
• Section: 143(3); 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A, MUMBAI BEFORE SHRI G.S.PANNU, ACCOUNTANT MEMBER AND SHRI RAVISH SOOD, JUDICIAL MEMBER ITA NO.598/MUM/2015(A.Y. 1992-93) AATUR HOLDINGS PVT. LTD., 32, MADHULI, 3 RD FLOOR, A.B.ROAD, WORLI, MUMBAI 400 018 PAN: AABCA 1472C ...... APPELLANT VS. THE DCIT, CEN. CIR.31, AAYKAR BHAVAN,M.K.ROAD, MUMBAI 400 020 .... RESPONDENT APPELLANT BY : SHRI DHAVAL SHAH RESPONDENT BY : SHRI RAJESH KUMA R YADAV DATE OF HEARING : 22/02/2017 DATE OF PRONOUNCEMENT : 31/03/2017 ORDER PER G.S.PANNU,A.M: THE CAPTIONED APPEAL FILED BY THE ASSESSEE PERT AINING TO ASSESSMENT YEAR 1992-93 IS DIRECTED AGAINST AN ORDER PASSED BY CIT(A)-40, MUMBAI DATED 05/11/2014, WHICH IN TURN, ARISES OUT OF AN ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 143(3) R.W.S. 147 O F THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) DATED 20/03/2003. 2. IN THIS APPEAL, ASSESSEE HAS RAISED THE FOLLOWIN G GROUNDS OF APPEAL:- 1. THE LD. COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN LAW AND IN FACTS IN NOT APPRECIATING THAT THE REOPENING OF THE ASSESSME NT U/S.147 OF THE ACT WAS INVALID. 2 ITA NO.6212/MUM/2013 (AY. 2009-10) 2. THE LD. COMMISSIONER OF INCOME-TAX (APPEALS) HA S ERRED IN LAW AND IN FACTS IN CONFIRMING THE LEVY OF INTEREST U/S. 234A, 234B AND 234C OF THE ACT. 3. THE LD. COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN LAW AND IN FACTS IN NOT APPRECIATING THAT THE INCOME ASSESSED IN THE HA NDS OF THE APPELLANT WAS SUBJECTED TO THE PROVISIONS OF TDS AND HENCE ON THE SAID AMOUNT OF TAX, NO INTEREST CAN BE LEVIED U/S. 234B AND 234C OF THE ACT. 3. AT THE TIME OF HEARING, THE LD. REPRESENTATIVE FOR THE ASSESSEE DID NOT PRESS GROUND NO.1, THEREFORE, THE SAME IS DISMISSED AS NOT PRESSED. 4. GROUNDS OF APPEAL NO.2 & 3 RELATE TO CHARGING OF INTEREST UNDER SECTION 234A, 234B AND 234C OF THE ACT AND ARE BEIN G TAKEN UP TOGETHER. IN BRIEF, THE BACKGROUND OF THE CASE IS THAT THE AS SESSEE IS A COMPANY INCORPORATED UNDER THE PROVISIONS OF THE COMPANIES ACT, 1956, AND IS A NOTIFIED ENTITY UNDER THE SPECIAL COURT(TRIAL OF OF FENCES RELATING TO TRANSACTION IN SECURITIES) ACT, 1992 AND ALL THE AS SETS INCLUDING BANK ACCOUNTS HAVE BEEN ATTACHED AND VESTED IN THE HANDS OF THE CUSTODIAN BY VIRTUE OF SUCH NOTIFICATION. 5. ON THIS ASPECT, THE LD. REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT IN THE CASES OF THE OTHER ENTITIES OF THE SAME GROUP, THE TRIBUNAL HAS ALREADY DECIDED SIMILAR ISSUES. A REFERENCE HAS BEE N MADE TO THE DECISION OF TRIBUNAL IN THE CASE OF M/S. CASCADE HOLDING PVT. L TD. IN ITA NO. 2900/MUM/2013 FOR ASSESSMENT YEAR 2010-11 DATED 2 9/09/2014. THE FOLLOWING DISCUSSION IN THE ORDER OF THE TRIBUNAL IS RELEVANT:- 3.GROUND NO.6 IS ABOUT INTEREST TO BE CHARGED U/S.2 34A,234B AND 234 C OF THE ACT. AT THE TIME OF THE HEARING BEFORE US, IT WAS AGREED BY THE REPRESENTATIVES OF BOTH THE SIDES THAT THE IDENTICAL ISSUE WAS DELIBERATED UPON AND DECIDED BY THE TRIBUNAL IN THE CASE OF M/S. TOPAZ HOLDINGS PVT. LTD. (ITA N O.2146/MUM/2013,AY.2001- 3 ITA NO.6212/MUM/2013 (AY. 2009-10) 02,DATED 18.06.2014).WE FIND THAT IN THE MATTER OF TOPAZ HOLDINGS PVT.LTD.(SUPRA),ONE OF THE GROUP CONCERNS, THE TRIB UNAL HAD DECIDED THE ISSUE AS UNDER: 3.NEXT GROUND OF APPEAL IS ABOUT LEVY OF INTEREST U/S. 234 OF THE ACT.BEFORE US, AR STATED THAT THE ASSESSEE WAS A NOTIFIED ENTI TY,THAT THE PROVISIONS OF S. 234A, 234B AND 234C OF THE ACT WERE DEEMED TO HA VE COMPLIED WITH,THAT THE ASSETS WERE ALREADY IN ATTACHMENT OF THE CUSTODIAN APPOINTED UNDER THE PROVISIONS OF THE SPECIAL COURT S ACT,THAT THE TRIBUNAL IN THE CASE OF THE APPELLANT AND SEVERAL OTHER ENTI TIES HAD HELD THE VIEW IN FAVOUR OF THE APPELLANT,THAT THE HONBLE BOMBAY HIG H COURT IN THE CASE OF DIVINE HOLDINGS PVT. LTD. AND CASCADE HOLDINGS PVT. LTD. HAD HELD THAT THE PROVISIONS OF SECTIONS 234A,234B AND 234C OF THE AC T WERE MANDATORY AND WERE APPLICABLE TO THE NOTIFIED ENTITIES ALSO, THAT THE ASSESSEE WAS IN THE PROCESS OF FILING AN APPEAL AGAINST THE SAID ORDER BEFORE THE HONBLE SUPREME COURT,THAT THE INCOME EARNED IN THE YEAR UN DER 3 ITA NO. 2900/M/2013 CASCADE HOLDINGS P. LTD. CONSIDERATION WAS SUBJECTED TO PROVISIONS OF TDS,THAT THE CHANGEABILITY OF THE SEC TION 234A, 234B AND 234C OF THE ACT SHOULD BE AFTER CONSIDERING THE AMO UNT OF TAX DEDUCTIBLE AT SOURCE ON THE INCOME ASSESSED. THE APPELLANT RELIES IN THIS REGARD ON THE FOLLOWING DECISIONS. HE RELIED UPON THE CASES OF MO TOROLA INC. V. DCIT [95 ITD 269 (DEL.(SB)], SEDCO FORES DRILLING CO. LTD. [ 264 ITR 320],NGC NETWORK ASIA LLC [313 ITR 187] ,SUMMIT BHATACHARYA [ 300 IT R (AT) 347 (BOM)(SB)], VIJAL GOPAL JINDAL [ITA NO. 4333/DEL/2009] & EMILLO RUIZ BERDEJO [320 ITR 190 (BOM)].DR RELIED UPON THE CASES OF DEVINE HOLDI NGS PVT. LTD. 3.1.WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US.WE FIND THAT IN THE CASE OF DEVINE HOLDINGS PVT. LTD. HONBLE BOMBAY HIGH COURT HAS HELD THAT PROVISIONS OF SECTION 234A , 234B AND 234C WERE APPLICABLE TO THE NOTIFIED PERSON ALSO.THEREFORE, U PHOLDING THE ORDER OF THE FAA TO THAT EXTENT,WE HOLD THAT PROVISIONS OF SECTI ON 234 OF THE ACT ARE APPLICABLE. AS FAR AS CALCULATION PART IS CONCERNED , WE FIND MERITS IN THE SUBMISSION MADE BY THE ASSESSEE. THEREFORE, WE ARE RESTORING BACK THE ISSUE TO THE FILE OF THE AO FOR FRESH ADJUDICATION WHO WOULD DECIDE THE ISSUE AFTER CONSIDERING THE AMOUNT TAXED DEDUCTIBLE AT SO URCE ON THE INCOME ASSESSED AND AFTER AFFORDING A REASONABLE OPPORTUNI TY OF HEARING TO THE ASSESSEE. GROUND NO.5 IS ALLOWED IN PART IN FAVOUR OF THE ASSESSEE. 5.1 RESPECTFULLY FOLLOWING THE AFORESAID DECISION, IN SO FAR AS THE ISSUE RELATING TO THE APPLICABILITY OF THE PROVISIONS OF SECTION 234A,234B AND 234C OF THE ACT IS CONCERNED, THE SAME IS HELD AGAINST T HE ASSESSEE IN VIEW OF THE JUDGMENT OF THE HON'BLE BOMBAY HIGH COURT IN THE CA SE OF DIVINE HOLDINGS PVT. LTD. SO HOWEVER, SO FAR AS IT RELATES TO RECO MPUTING THE INTEREST 4 ITA NO.6212/MUM/2013 (AY. 2009-10) CHARGEABLE UNDER SECTION 234A, 234B AND 234C OF THE ACT IS CONCERNED, THE SAME IS RESTORED BACK TO THE FILE OF ASSESSING OFFI CER, WHO SHALL RECOMPUTE THE SAME AFTER CONSIDERING THE AMOUNT OF TAX DEDUCT IBLE AT SOURCE ON THE INCOME ASSESSED. NEEDLESS TO MENTION, ASSESSING OF FICER SHALL ALLOW THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD BE FORE PASSING AN ORDER AFRESH CHARGING INTEREST UNDER SECTION 234A, 234B A ND 234C OF THE ACT, AS PER LAW. THUS, GROUNDS OF APPEAL NO.2 & 3 ARE PART LY ALLOWED. 6. RESULTANTLY, THE APPEAL OF THE ASSESSEE IS PARTL Y ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 31/03/2017 SD/- SD/- (RAVISH SOOD ) (G.S. PANNU) JUDICIAL MEMBER ACCOCUNTANT MEMBER MUMBAI, DATED 31/03/2017 VM , SR. PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT , 2. THE RESPONDENT. 3. THE CIT(A)- 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI