Nima Specific Family Trust, Ahmedabad V. The ACIT., Cent.Circle-1(1), Ahmedabad

ITA 609/AHD/2005

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 9077 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 6 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-09-2009
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 07-09-2009
• Assessment Year: 1991-1992
• Appeal Filed On: 24-02-2005
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: NEETA SHAH SENIOR
• Assessee Lawyers: HIMANSHU C SHAH
• Section: 143(3); 244A; 143(1); 154

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH 'B' (BEFORE S/SHRI P K BANSAL AND MAHAVIR SINGH) ITA NO.609/AHD/2005 (ASSESSMENT YEAR: 1991-92) NIMA SPECIFIC FAMILY TRUST, NIRMA HOUSE, ASHRAM ROAD, AHMEDABAD V/S THE ASSISTANT COMMISSIONER OF INCOME- TAX, CENTRAL CIRCLE-1(1), AHMEDABAD (APPELLANT) (RESPONDENT) APPELLANT BY :- SHRI HIMANSHU C SHAH RESPONDENT BY:- SMT. NEETA SHAH, SENIOR DR O R D E R PER P K BANSAL (ACCOUNTANT MEMBER) : THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT( A) DATED 4 TH NOVEMBER, 2004, BY TAKING THE FOLLOWING EFFECTIVE G ROUNDS OF APPEAL:- 1 THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-I, AHM EDABAD HAS ERRED BOTH IN LAW AND ON FACTS OF THE CASE IN FRAMI NG AN APPELLATE ORDER NO.21/04-05 DATED 04-11-04 FOR ASST. YEAR 199 1-92. 2 IN LAW AND IN FACTS AND CIRCUMSTANCES OF THE APPELL ANTS CASE, THE LD. CIT(A) HAS ERRED IN CONFIRMING THAT THE APPELLA NT IS NOT ELIGIBLE FOR RECEIVING INTEREST U/S 244A ON REFUND ARISING ON ACCOUNT OF RELIEF GRANTED OF AN AMOUNT OF RS.7,00,0 00/- IN RESPECT OF SERVICE CHARGES. 3 IN LAW AND IN FACTS AND CIRCUMSTANCES OF THE APPELL ANTS CASE, THE LD. CIT(A) HAS ERRED IN DIRECTING THE AO TO WITHDRA W INTEREST ON REFUNDS IF GRANTED. 2 4 IN LAW AND IN FACTS AND CIRCUMSTANCES OF THE APPELL ANTS CASE, THE LD. CIT(A) HAS ERRED IN DIRECTING THE AO TO ENHANCE THE INCOME OF THE APPELLANT TO THE EXTENT THAT THE ASSESSED INCOM E IS NOT LOWER THAN RETURNED INCOME. 2 GROUND NO.1 IS GENERAL IN NATURE AND DOES NOT RE QUIRE ANY ADJUDICATION. 3 GROUND NOS.2 AND 3 RELATE TO ELIGIBILITY OF INTE REST U/S 244A ON THE REFUND ARISING DUE TO THE ORDER PASSED BY THE CIT(A) DATED 28-01-2004. 4 THE BRIEF FACTS ARE THAT THE ASSESSEE SUBMITTED THE RETURN SHOWING TOTAL INCOME AT RS.5,29,16,030/- WHI CH WAS PROCESSED U/S 143(1) OF THE INCOME-TAX ACT, 1961 [ THE ACT FOR SHORT]. SUBSEQUENTLY, THE ASSESSMENT U/S 143(3) WAS COMPLETED AT AN INCOME OF RS.6,07,19,240/-, AGAINST WHICH THE AS SESSEE WENT IN APPEAL BEFORE THE CIT(A). THE CIT(A) VIDE ORDER DATED 07-09- 1992 PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. IN THE ORDER PASSED IN CONSEQUENCE OF CIT(A)S ORDER DATED 07-09 -1992, THE AO DETERMINED THE TAXABLE INCOME AT RS.5,64,09,342/ -. THE ASSESSEE MOVED AN APPLICATION U/S 154. IN CONSEQUEN CE THEREOF THE AO DETERMINED THE INCOME AT RS.5,66,59,340/- VI DE ORDER DATED 22-09-1993 AGAINST WHICH THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A). AGAINST THIS ORDER, THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A) WHICH WAS DECIDED BY THE C IT(A) VIDE ORDER DATED 22-03-1995. 5 THE TOTAL INCOME OF THE ASSESSEE WAS ASSESSED AT RS.5,33,89,330/- AFTER GIVING APPEAL EFFECT TO THE ORDER OF THE CIT(A) DATED 22-03-1995, VIDE ORDER DATED 05-09-199 5. IN THE ORDER DATED 05-09-1995 WHILE GIVING EFFECT TO THE O RDER OF THE 3 CIT(A), THE AO MENTIONED RECOMPUTE TAX PAYABLE AND INTEREST. GIVE CREDIT FOR ALL PREPAID TAXES AND ALSO GIVE CRE DIT FOR REFUND OF OTHER ASSESSMENT YEARS, IF ANY, ADJUSTED AGAINST TH E DEMAND FOR AY 1991-92.ISSUE DEMAND NOTICE / R.O. ACCORDINGLY. ACCORDINGLY, THE INTEREST U/S 244A WAS ALSO ALLOWED TO THE ASSES SEE AS PER ITNS 150 DATED 28-11-1995. SUBSEQUENTLY, THE ASSESS EE MOVED AN APPLICATION U/S 154 VIDE LETTER DATED 10-07-1998 . THE AO PASSED AN ORDER U/S 154 DATED 14-05-1999 IN WHICH T HE AO RECTIFIED THE COMPUTATION OF INTEREST U/S 244A ALTH OUGH THE TOTAL INCOME REMAINS UNCHANGED AT RS.5,33,89,330/-. THE I NTEREST U/S 244A WAS ACCORDINGLY COMPUTED AT RS.16,32,762/- IN PLACE OF RS.7,69,626/-THE ASSESSEE WENT IN APPEAL AGAINST TH AT ORDER BEFORE THE CIT(A). THE CIT(A) VIDE HIS ORDER DATED 17-04-2000 PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. IN CONSE QUENCE THEREOF THE AO PASSED AN ORDER DATED 22-09-2000 AND THE ASS ESSEE WAS ALLOWED FURTHER INTEREST U/S 244A AMOUNTING TO RS.2 4,956/-. 6 AGAINST THE ORDER OF THE CIT(A) DATED 07-09-1992 , THE ASSESSEE WENT IN APPEAL BEFORE THE TRIBUNAL. THE TR IBUNAL PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. THE AO IN CONSE QUENCE OF THE ORDER OF TRIBUNAL, DETERMINED THE TOTAL INCOME AT RS.5,33,87,850/- VIDE ORDER DATED 11-07-2002. AGAIN ST THE ORDER OF THE CIT(A) DATED 22-03-1995 BOTH THE ASSESSEE AS WELL AS REVENUE WENT BEFORE THE TRIBUNAL AND THE TRIBUNAL D ECIDED BOTH THE APPEALS VIDE ORDER DATED 23-12-2002. THE GROUND RELATING TO THE CLAIM OF EXPENDITURE AS SERVICE CHARGES WAS RES TORED TO THE FILE OF THE CIT(A). THE CIT(A) VIDE ORDER DATED 28 -01-2004 DELETED THE DISALLOWANCE MADE ON ACCOUNT OF SERVICE CHARGES UNDER PARA-2.3. IN CONSEQUENCE OF THE ORDER OF THE CIT(A) DATED 4 28-01-2004, THE AO PASSED THE FOLLOWING ORDER DATED 05-04- 2004:- ORDER GIVING EFFECT TO THE ORDER OF CIT(A)S ORDER ------------------------------------------------- ---- IN VIEW OF THE ORDER OF THE LD. CIT(A) XII, MUMBAI S ORDER NO. CIT(A)XII/AC-12(3)/IT-42/RESTORED-3/02-03 DATED 28- 1-2004, THE REVISED TOTAL INCOME OF THE ASSESSEE IS AS UNDER: TOTAL INCOME AS PER EFFECT TO THE CIT(A)S ORDER DATED 5-9-95 RS.5,33,89,330 LESS: RELIEF ALLOWED BY THE CIT(A) ON ACCOUNT OF SERVICES CHARGES. RS. 7,00,000 ------------------- TOTAL INCOME RS.5,26,89,330 ------------------- RECALCULATE TAX PAYABLE AND INTEREST. GIVE CREDIT F OR PREPAID TAXES / ADJUSTMENT, TAXES IF ANY. ISSUE DEMAND NOTICE AND C HALLAN. AS ASSESSED INCOME IS LESS THAN THE RETURNED INCOME DELAY IN IS SUE OF R.O. IS WHOLLY ATTRIBUTABLE TO THE ASSESSEE HENCE NO INTERE ST U/S 244A IS GRANTED TO THE ASSESSEE. IN THIS ORDER AS IS APPARENT THE AO DIRECTED THAT T HE ASSESSEE SHOULD BE ALLOWED INTEREST U/S 244A AS THE ASSESSED INCOME IS LESS THAN THE RETURNED INCOME. THE DELAY IN ISSUE O F REFUND IS WHOLLY ATTRIBUTABLE TO THE ASSESSEE. AGAINST THIS O RDER, THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A). THE CIT( A) DISMISSED THE APPEAL OF THE ASSESSEE ON THE ISSUE O F GRANTING OF THE INTEREST U/S 244A AS PER THE OBSERVATIONS MADE UNDER PARA-3 OF HIS ORDER. THE CIT(A) FURTHER ENHANCED THE INCOM E OF THE ASSESSEE OBSERVING THAT THE ASSESSED INCOME CANNOT BE LOWER THAN THE RETURNED INCOME AND DIRECTED THE AO TO ASSESS T HE ASSESSEE AT 5 THE RETURNED INCOME AS PER THE OBSERVATIONS MADE UN DER PARAS-5 AND 6 OF HIS ORDER. GROUND NOS.2 AND 3 OF THE ASSESSEES APPEAL RELATE TO THE CLAIM OF INTEREST U/S 244A WHILE GROUND NO.4 RELATES TO T HE POWER OF THE CIT(A) ENHANCING THE INCOME OF THE ASSESSEE TO THE EXTENT OF RETURNED INCOME. 7 WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS AND PERUSED THE MATERIAL ON RECORD ALONG WITH THE O RDER OF THE AUTHORITIES BELOW. SO FAR AS THE CLAIM OF INTEREST ON REFUND U/S 244A IS CONCERNED, THE TOTAL INCOME DETERMINED BY T HE AO IN CONSEQUENCE OF THE CIT(A)S ORDER DATED 28-01-2004 IS RS.5,26,89,330/-, THE TAX PAYABLE THEREON COMES TO RS.2,95,10,058/- AGAINST WHICH THE TAX PAID BY THE ASSESSEE IS RS.3,80,10,768/-. UNDER THESE FACTS WE DO NOT AGREE WITH THE CIT(A) THAT THE AMOUNT OF REFUND IS LESS THAN 10% O F THE TAXES AS DETERMINED. THE REFUND IN THE CASE OF THE ASSESSEE IN ANY CASE AS DETERMINED EXCLUDING THE INTEREST U/S 244A IS MORE THAN 10% OF RS.2,95,10,058/-. THEREFORE, IN OUR OPINION, THE AS SESSEE IS NOT HIT BY THE EXCLUDING PROVISO TO SECTION 244A(1)(A). THE ASSESSEE WAS EARLIER GRANTED INTEREST U/S 244A VIDE CIT(A)S ORDER DATED 14-06-1999 DETERMINING THE TOTAL INCOME AT RS.5,33, 89,330/-. AGAINST THE GRANTING OF THE INTEREST U/S 244A BY TH E AO VIDE ORDER DATED 22-09-2000 PASSED IN CONSEQUENCE OF CIT (A)S ORDER DATED 17-04-2000, THE REVENUE HAS NOT COME IN APPEA L BEFORE THE ITAT. THE ORDER DATED 22-09-2000 PASSED IN CONSEQUE NCE OF THE ORDER OF THE CIT(A) DATED 17-04-2000 HAS BECOME FIN AL ON THE GRANTING OF INTEREST U/S 244A WHEN THE TOTAL INCOME IS DETERMINED AT RS.5,33,89,330/-. FURTHER, THE INCOME OF THE 6 ASSESSEE IS REDUCED VIDE TRIBUNALS ORDER DATED 22- 09-2000 BY RS.1526/- AND THAT OF CIT(A)S ORDER DATED 28-01-20 04 BY RS.7,00,000/-. THE AO PASSED AN ORDER DATED 05-04-2 004 FOR GIVING FURTHER RELIEF TO THE ASSESSEE IN RESPECT OF RS.7,00,000/- ALLOWED BY THE CIT(A) VIDE ORDER DATED 28-01-2004. IN THIS ORDER THE AO WITHDREW THE CLAIM OF INTEREST U/S 244A. SO FAR AS THE INTEREST ALLOWED U/S 244A VIDE ORDER DATED 22-09-20 00 HAS BECOME FINAL AND IN OUR OPINION, THE AO IS NOT COMP ETENT TO WITHDRAW THE INTEREST U/S 244A AS HAS BEEN ALLOWED VIDE ORDER DATED 22-09-2000 PASSED IN CONSEQUENCE OF THE CIT(A )S ORDER DATED 17-04-2000. WE, THEREFORE, TO THAT EXTENT SET -ASIDE THE ORDER OF THE CIT(A) AND DIRECT THE AO TO ALLOW THE INTEREST TO THE ASSESSEE U/S 244A AS HAS BEEN ALLOWED TO THE ASSESS EE VIDE ITNS 150 PASSED VIDE ORDER DATED 22-09-2000. 8 NOW THE QUESTION BEFORE US REMAINS, THE INTEREST ON THE REFUND WHICH HAS ARISEN IN CONSEQUENCE OF FURTH ER RELIEF GIVEN BY THE CIT(A) AMOUNTING TO RS.7,00,000/- VIDE ORDER DATED 28-1-2004. THE AO IN THIS REGARD SINCE HAS OBSERVED THAT THE DELAY IN ISSUE OF THE REFUND IS WHOLLY ATTRIBUTABLE TO THE ASSESSEE, THEREFORE, THE ASSESSEE IS NOT ENTITLED FOR THE REF UND. WE HAVE GONE THROUGH THE PROVISIONS OF SECTION 244A(2). THI S SECTION STIPULATES AS UNDER:- 244A(2) IF THE PROCEEDINGS RESULTING IN THE REFUN D ARE DELAYED FOR REASONS ATTRIBUTABLE TO THE ASSESSEE, WHETHER WHOLL Y OR IN PART, THE PERIOD OF THE DELAY SO ATTRIBUTABLE TO HIM SHALL BE EXCLUDED FROM THE PERIOD FOR WHICH INTEREST IS PAYABLE, AND WHERE ANY QUESTION ARISES AS TO THE PERIOD TO BE EXCLUDED, IT SHALL BE DECIDED B Y THE CHIEF COMMISSIONER OR COMMISSIONER WHOSE DECISION THEREON SHALL BE FINAL. 7 FROM THE PERUSAL OF THE AFORESAID SECTION IT IS APP ARENT THAT WHEN THE ISSUE RELATES TO THE DELAY FOR THE REASONS ATTR IBUTABLE TO THE ASSESSEE, WHETHER THE DELAY IS ATTRIBUTABLE TO THE ASSESSEE OR NOT, THIS QUESTION HAS TO BE DECIDED BY THE CHIEF COMMIS SIONER OF COMMISSIONER. IN OUR OPINION, THE CIT(A) WAS NOT CO MPETENT TO DECIDE THIS ISSUE. SIMILARLY THIS TRIBUNAL CAN NOT DECIDE THIS ISSUE BECAUSE THIS POWER HAS BEEN ENTRUSTED UPON TH E CHIEF COMMISSIONER OR COMMISSIONER. WE ACCORDINGLY SET-AS IDE THE ORDER OF THE CIT(A) AND DISMISS THE GROUND OF THE A SSESSEE IN RESPECT OF INTEREST ON REFUND SO FAR AS IT RELATES TO THE REFUND WHICH HAS ARISEN DUE TO THE DELETION OF THE DISALLO WANCE OF RS.7,00,000/- BY THE CIT(A) VIDE ORDER DATED 28-01- 2004. THE ASSESSEE IS FREE TO MOVE AN APPLICATION BEFORE THE CHIEF CIT OR CIT AS HE MAY DEEM FIT WITHIN SIXTY DAYS OF THE REC EIPT OF THIS ORDER, IF HE SO CHOOSES. 9 NOW THE SECOND ISSUE INVOLVED IN THIS APPEAL IS THAT THE CIT(A) HAS ERRED IN DIRECTING THE AO TO ENHANCE THE INCOME OF THE ASSESSEE TO THE EXTENT THE ASSESSED INCOME C ANNOT BE LOWER THAN THE RETURNED INCOME. 10 WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS AND PERUSED THE MATERIAL ON RECORD. WE NOTED THAT T HE ORDER OF THE CIT(A) DATED 28-01-2004 HAS BECOME FINAL. AGAIN ST THIS ORDER THE REVENUE HAS NOT COME IN APPEAL BEFORE THE TRIBUNAL. IN THIS ORDER THE CIT(A) HAS NOT DIRECTED THE AO THAT THE FINAL INCOME DETERMINED AFTER ALLOWING THE RELIEF TO THE ASSESSEE WILL NOT BE LESS THAN THE RETURNED INCOME. THE ASSESSMEN T ORDER HAS BEEN MERGED WITH THE ORDER OF THE ITAT BY WHICH THI S ISSUE HAS BEEN SET-ASIDE BY THE TRIBUNAL TO THE FILE OF THE C IT(A) VIDE 8 ORDER DATED 23-12-2002 AND FINALLY THAT ORDER OF TH E CIT(A) DATED 28-01-2004. THE AO HAS TO ONLY GIVE EFFECT TO THE ORDER OF THE CIT(A) DATED 28-01-2004 AND DETERMINE THE ASSES SED INCOME ACCORDINGLY. THE CIT(A), IN OUR OPINION, WAS NOT CO MPETENT TO DIRECT THE AO THAT THE RETURNED INCOME BY THE ASSES SEE BE TAKEN AS THE ASSESSED INCOME IN AN APPEAL FILED BY THE AS SESSEE BEFORE THE CIT(A). IT IS NOT A CASE WHERE THE CIT(A) HAS R ECTIFIED HIS ORDER DATED 28-01-2004. WE ACCORDINGLY SET-ASIDE TH E ORDER OF THE CIT(A) ON THIS ISSUE AND ALLOW THE GROUND OF AP PEAL OF THE ASSESSEE. 11 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 11-09-2009 SD/- SD/- (MAHAVIR SINGH) JUDICIAL MEMBER (P K BANSAL) ACCOUNTANT MEMBER DATE : 11-09-2009 COPY OF THE ORDER FORWARDED TO : 1. NIMA SPECIFIC FAMILY TRUST, NIRMA HOUSE, ASHRAM ROAD, AHMEDABAD 2. THE ACIT, CENTRAL CIRCLE-1(1), AHMEDABAD 3. THE CIT CONCERNED 4. THE CIT(A)-I, AHMEDABAD 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER DY. R/AR, ITAT, AHMEDABAD