Sree Rayalaseema Alkalies and Allied Chemicals Limited, Kurnool V. DCIT, Circle-1, Kurnool

ITA 604/HYD/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 74455 (ITAT-HYDERABAD)
• Duration Of Justice: 8 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-01-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 1997-1998
• Appeal Filed On: 29-04-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: A C GANGAIAH
• Keywords: Deemed to accrue or arise in india; Right to appeal
• Section: 234B; 115JB; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD BEFORE SHRI CHANDRA POOJARI, A.M. AND SMT. ASHA VIJAYARAGHAVAN, J.M. ITA.NO.604/HYD/2013 ASSESSMENT YEAR 1997 - 1998 SREE RAYALASEEMA ALKALIES AND ALLIED CHEMICALS LIMITED, KURNOOL PA N AACCS8581M VS. DCIT, CIRCLE 1 KURNOOL (APPELLANT) (RESPONDENT) FOR APPELLANT : SHRI A.C. GANGAIAH (A.R.) FOR REVENUE : SHRI SOLGY JOSE T. KOTTARAM DATE OF HEARING : 04.12.2013 DATE OF PRONOUNCEMENT : 10 .1 .201 4 ORDER PER SMT. ASHA VI JAYARAGHAVAN, J.M. THIS APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A) - IV, HYDERABAD DATED 29.05.2007 FOR THE ASSESSMENT YEAR 1997 - 1998. 2. BRIEF FACTS OF THE CASE ARE THAT I N THIS CASE THE A SSESSEE FURNISHED RETURN OF INCOME DISCLOSING N IL TO' INCOME UNDER THE REGULAR PROVISION OF THE ACT AND BOOK PROFIT OF RS.2,61,97,540/ - U/S 115JA OF THE ACT. THE A SSESSEE 'S RETURN WAS PROCESSED IN A SUMMARY MANNER U/S 145(1 )( A) OF THE ACT ON 26.03.1999 DETERMINING TOTAL TAXABLE INCOME OF RS.2,61,97,540 / - . THE A SSESSING O FFICER ALSO LEVIED INTEREST OF RS. 15,12,984 U/S. 234B AND RS. 7,74,750/ - U/S. 234C OF THE ACT. T HE A SSESSEE PREFERRED APPEAL BEFORE LD.CIT(APPEAL) - IV HYDERABAD. LD. CIT(APPEAL ) - IV HYDERABAD 2 ITA.NO.604/HYD/2013 SREE RAYALASEEMA ALKALIES & ALLIED CHEMICALS LTD. KURNOOL VIDE HIS APPELLATE ORDER DATED 06.08.2000 DISMIS SED THE APPEAL FILED BY THE A SSESSEE BECAUSE SEC. 246A(1 ) (A) MAKES IT OBVIOUS THAT AS FAR AS INTIMATION U/S. 143(1)(A) AND 143(1)(B} ARE CONCERNED THE RIGHT OF APPEAL AS ENSHRINED U/S. 246A(1)(A) IS LIMITED TO THE ADJUSTMENTS MADE UNDER THESE SECTIONS. IT WAS HELD THAT LEVY OF INTEREST U/S. 234B AND 234C ARE NOT IN THE NATURE OF ADJUSTMENT TO THE INCOME RETURNED AND, THEREFORE, THE APPEAL FILED BY THE A SSESSEE WAS NOT MAINTAINABLE. 3 . THE A SSESSEE PREFERRED 2 ND APPEAL BEFORE THE TRIBUNAL AND THE HON'BLE ITAT, 'A' BENCH HYDERABAD, VIDE ITA NO. 341/HYD/2000 DATED 04.06.2001 IN A SSESSEES CASE FOR THE ASSESSMENT YEAR 1997 - 98 UPHELD THE ORDER OF THE LD. CIT(A) AND DISMISSED THE APPEAL FILED BY THE A SSESSEE . IN THE MEAN TIME THE A SSESSEE FILED RECTIFICATION AP PLICATION BEFORE THE LAO ASKING FOR DELETING THE INTEREST LEVIED U/S. 234B AND U/S. 234C OF THE ACT. THE LAO VIDE COMMUNICATION NO. R - 8/ACIT/KNL/2007 - 08 DATED 29.05.2007 U/S. 154 OF THE ACT DECIDED THE MATTER AGAINST THE A SSESSEE IN THE LIGHT OF INTRODUCTIO N OF SEC. 115JA AND 115JB OF THE ACT WITH EFFECT FROM 1.04.1997 BY THE FINANCE (NO.2) ACT, 1996. HE ALSO RELIED ON VARIOUS DECISIONS GIVEN BY THE HON'BLE HIGH COURTS ON THE LEVY OF INTEREST U/S 234B AND 234C WHILE DETERMINING TAX DEMAND AND MAKING ASSESSME NT U/S. 115JA AND U/S. 115JB OF THE ACT. 4 . AGGRIEVED, THE ASSESSEE FILED APPEAL BEFORE THE CIT(A) AND THE LEARNED A.R. OF THE ASSESSEE CONTENDED BEFORE THE CIT(A) THAT THE AO HAS ERRED ON THE FACTS AND IN LAW. HE 3 ITA.NO.604/HYD/2013 SREE RAYALASEEMA ALKALIES & ALLIED CHEMICALS LTD. KURNOOL HAS VEHEMENTLY ARGUED THAT THE RECTIFICAT ION PETITION WAS FILED ON THE BASIS OF THE OBSERVATION IN THE APPELLATE ORDER PASSED BY THE HON'BLE ITAT DATED 04.06.2001 IN THE CASE OF APPELLATE COMPANY FOR THE YEAR 1997 - 98. THE A SSESSEE COMPANY HAD BEEN FURNISHING RECTIFICATION PETITION BUT THE AO HAS REJECTED THE IMPUGNED RECTIFICATION APPLICATION WITHOUT FOLLOWING THE DECISION GIVEN BY THE HON'BLE SUPREME COURT IN THE CASE OF KWALITY BISCUITS LTD. 284 ITR 434 (SC). THE LEARNED A.R. FURTHER SUBMITTED THAT THE FORMER CIT(A) HAD CALLED FOR A REM A ND REPOR T VIDE LETTER NO. CIT(A) - IV, HYD ITA NO. 42/AC.CIR - I/KNL / CITA - IV/2008 DATED 13.08.2008 . THE AO VIDE HIS REMAND REPORT NO. R - B/ACIT/KNL/1997 - 98 DATED 11.06.2008 SUBMITTED THE REMAND REPORT WHICH WAS DULY FORWARDED BY THE ADDL. CLT, K U RNOOL R ANGE, VIDE NO. A DDL. CIT/KNL / REMAND REPORT/2008 DATED 17.06.2008 . A COPY OF THE REMAND REPORT WAS DULY HANDED OVER TO THE A SSESSEE FOR FURNISHING THE REBUTTAL. THE A SSESSEE HAS AVAILED SUFFICIENT OPPORTUNITY AND FURNISHED REBUTTAL VIDE LETTER DATED 12.07.2008 RECEIVED IN THE O/O. CLT(A) - IV, HYDERABAD ON 15.07.2008 . THE LD. AR HAS ARGUED THAT SEC. 115JA BEGINS WITH NON - OBSTANTE CLAUSE OVERRIDING OTHER PROVISIONS OF THE ACT. THE TAXABILITY OF DEEMED INCOME IS SPECIFIED IN SEC. 115JA ITSELF. IN SUPPORT OF HIS CONTENTION T HE L D. AR RELIED ON THE DECISION IN THE CASE OF CWT , GU J ARAT VS. ELLIS BRIDGE GYMKHANA 229 ITR 1. THE LEARNED CIT(A) HELD THAT THE LEARNED A.R. HAS WRONGLY RELIED ON THE DECISION OF CIT VS. KWALITY BISCUITS LTD. 284 ITR 434 (SC) WHICH HAS BEEN OVERRULED IN T HE CASE OF JCIT VS. ROLTA INDIA LTD. (2011) 330 ITR 470 (SC) AND DISMISSED THE APPEAL OF THE ASSESSEE. 4 ITA.NO.604/HYD/2013 SREE RAYALASEEMA ALKALIES & ALLIED CHEMICALS LTD. KURNOOL 5. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUNDS : 1. TO DIRECT THE ACIT OR DCIT CIRCLE 1 TO TREAT THE RECTIFI CATION PETITION NOT DISPOSED WITHIN 6 MONTHS FROM THE DATE OF FILING AND WITHIN 4 YEARS FROM THE DATE OF ASSESSMENT ORDER AS ALLOWED AND ACTED UPON THE RECTIFICATION PETITION. 2. TO PERMIT THE APPELLANT TO RAISE ANY OTHER GROUND AT THE TIME OF HEARING OF THE APPEAL. 6. WE HEARD BOTH SIDES AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES. AT THE OUTSET, WE MAY NOTE THAT THE GROUNDS RAISED BY THE ASSESSEE, EXTRACTED ABOVE, DO NOT ARISE OUT OF THE IMPUGNED ORDER OF THE CIT(A), AND AS SUCH, THE SAME ARE LIABL E TO BE REJECTED IN LIMINE. FURTHER, E VEN THOUGH THESE APPELLATE PROCEEDINGS ARISE OUT OF THE LETTER OF THE ASSESSING OFFICER DATED 29.5.2007, REJECTING THE PETITION OF THE ASSESSEE DATED 19.12.2006 SEEKING RECTIFICATION OF THE INTIMATION UNDER S.143(1)( A) OF THE ACT, INSOFAR AS IT RELATED TO CHARGING OF INTEREST UNDER S.234B AND 234C OF THE ACT, IN RELATION TO MINIMUM ALTERNATIVE TAX LEVIED UNDER S.115JA OF THE ACT, THE MAIN ISSUE IN DISPUTE IN THIS APPEAL RELATES TO LEVY OF INTEREST UNDER S.234B AND 234 C OF THE ACT, WHILE DETERMINING INCOME UNDER S.115JA AND S.115JB OF THE ACT. THE CIT(A) HAS DECIDED THE MATTER FOLLOWING THE DECISION OF THE APEX COURT IN THE CASE OF JOINT CIT V/S. ROLTA INDIA LTD. 5 ITA.NO.604/HYD/2013 SREE RAYALASEEMA ALKALIES & ALLIED CHEMICALS LTD. KURNOOL (2011) 330 ITR 470(SC), IN THE FOLLOWING MANNER 5.2 THE CONTROVERSY ON LEVY OF INTEREST U/S. 234B AND U/S. 234C OF THE ACT WHILE DETERMINING INCOME U/S 115J A AND U/S 115JB HAS BEEN SETTLED AT REST BY THE HON'BLE SUPREME COURT IN THE CASE OF JOINT CIT VS. ROLTA INDIA LTD.(2011) 330 ITR470(SC). HON'BLE SUP REME COURT HELD THAT ALL OTHER PROVISIONS OF THE ACT SHALL APPLY TO THE MAT COMPANY. FURTHER, AMENDMENTS HAVE BEEN MADE IN THE RELEVANT FINANCE ACTS FOR PAYMENT OF ADVANCE TAX U/S 115J A AND U/S 115JB OF THE ACT. SEC. 234B OF THE ACT APPLIES TO ALL COMPANI ES. THERE IS NO EXCLUSION OF SEC. 115J /115J A IN THE LEVY OF INTEREST U/S 234B OR U/S 234 OF THE ACT. EXPRESSION 'ASSESSED TAX' IS DEFINED TO MEAN TAX ASSESSED ON REGULAR ASSESSMENT WHICH MEANS THE TAX DETERMINED ON THE APPLICATION OF SEC. 115J /115J A IN THE REGULAR ASSESSMENT. THUS, INTEREST U/S 234B AND 234C OF THE ACT IS PAYABLE ON FAILURE TO PAY ADVANCE TAX IN RESPECT OF TAX PAYABLE U/S 115J A/115JB. WHILE SO HOLDING, THE HON'BLE SUPREME COURT SET ASIDE ROLTA INDIA LTD. (JUDGMENT DATED 6.02.2009 OF TH E BOMBAY HIGH COURT IN IT APPEAL NO. 1267 OF 2008), APPROVED THE DECISION IN JINDAL THERMAL POWER COMPANY LTD. VS. DY. CIT (2006) 286 ITR 182 (KAR) AND DISTINGUISHED THE DECISIONS IN KWALITY BISCUITS LTD. VS. CIT (2000) 243 ITR 519 (KAR) ERR VS. KWALITY BI SCUITS LTD (2006) 284 ITR 434 (SC). 5.3 THE LEARNED A.R. RELIED ON THE APEX COURT DECISION IN THE CASE OF CIT VS. KWALITY BISCUITS LTD. 9SUPRA) WHICH HAS ALREADY BEEN DISTINGUISHED AND OVERRULED BY THE HONBLE SUPREME COURT IN THE CASE OF JCIT VS. ROLT A INDIA LTD. (SUPRA). THE CASE LAWS RELIED UPON BY THE LEARNED A.R. ARE DISTINGUISHABLE ON THE FACTS OF THE CASE. RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF JCIT VS. ROLTA INDIA LTD. (SUPRA), GROUNDS OF APPEAL FILED BY THE APPELLANT ARE NOT ALLOWED. SINCE THE VIEW TAKEN BY THE CIT(A) IN THE IMPUGNED ORDER ON THE POINT AT ISSUE IS IN CONSONANCE WITH SETTLED POSITION OF LAW, AS LAID DOWN BY THE APEX COURT IN THE CASE OF ROLTA INDIA LTD. (SUPRA), WE FIND NO INFIRMITY IN THE I MPUGNED ORDER OF THE CIT(A). THE SAME IS ACCORDINGLY UPHELD AND THE GROUNDS OF THE ASSESSEE IN THIS APPEAL ARE REJECTED. 6 ITA.NO.604/HYD/2013 SREE RAYALASEEMA ALKALIES & ALLIED CHEMICALS LTD. KURNOOL 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 10.1.2014 S D / - S D / - (CHANDRA POOJARI) (A SHA VIJAYARAGHAVAN) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATE 10 TH JANUARY , 2014 VBP/ BVS COPY TO : 1. SREE RAYALASEEMA ALKALIES AND ALLIED CHEMICALS LIMITED, KRISHNA JYOSTHNA COMPLEX, BAGYANAGAR, KURNOOL PAN AACCS8581M 2. DCIT, CIRCLE - 1 , KURNOOL. 3. CIT(A) - I V, HYDERABAD. 4. CIT - III , HYDERABAD 5. D.R. ITAT B BENCH, HYDERABAD.