DCIT, Bangalore V. M/s Denso Kirloskar Industries Pvt. Ltd., Bangalore

ITA 616/BANG/2010

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 1641 (ITAT-BANGALORE)
• Duration Of Justice: 8 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-01-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 04-01-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 04-05-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH A BEFORE DR. O.K. NARAYANAN, VICE PRESIDENT AND SMT. P. MADHAVI DEVI, JUDICIAL MEMBER ITA NO.616(BANG)/2010 (ASSESSMENT YEAR: 2004-05) DEPUTY COMMISSIONER OF INCOME-TAX LTU, BANGALORE. APPELLANT VS. M/S.DENSO KIRLOSKAR INDUSTRIES P. LTD., 30 TH KM STONE, TUMKUR ROAD, NH 4 NELAMANGALA, BANGALORE-560 0123 PAN: AABCD 0042 P RESPONDENT AND CROSS OBJN.NO.43(BANG)/2010 (IN ITA NO.616(BANG)/2010) (ASSESSMENT YEAR: 2004-05) ( BY THE ASSESSEE) *** REVENUE BY: SMT.JACINTA ZIMIK VASHAI. ASSESSEE BY : SHRI VISHNU MURTHY. O R D E R PER SMT. P. MADHAVI DEVI, JM : THE APPEAL BY THE REVENUE AND THE CROSS OBJECTION BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF THE CIT( APPEALS)- LTU, BANGALORE, DATED 29-1-2010 FOR THE ASSESSMENT YEAR 2004-05. 2. IN THIS APPEAL, THE REVENUE IS AGGRIEVED BY THE ORDER OF THE CIT(A) IN DIRECTING THE AO TO ALLOW THE DATE OF ITA NO.616 & CO 43(BANG)/2010 PAGE 2 OF 5 PRESENTATION OF CHEQUE AS THE DATE OF PAYMENT OF TA XES FOR THE PURPOSE OF CALCULATION OF INTEREST UNDER THE INCOME -TAX ACT, 1961 [ HEREINAFTER REFERRED TO AS 'THE ACT']. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE-C OMPANY FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER CONSIDERATION ON 1-11-2004 DECLARING A TOTAL INCOME OF RS.14,38,27,167/-. AFTER MAKING THE DISALLOWANCE OF PROVISION FOR WARRANTY, THE AO ASSESSED THE INCOME AT RS.15,1 2,83,840/- AND ADDED INTEREST UNDER SECTIONS 234B AND 234C OF THE ACT. AGGRIEVED BY THE LEVY OF INTEREST U/SS. 234B AND 23 4C, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) BY S TATING THAT THE TAX PAYMENT HAS BEEN MADE BY THE ASSESSEE WITHI N THE DUE DATE BY TENDERING THE CHEQUE AND THE AO HAS FAILED TO CONSIDER THAT THE DATE OF TENDERING CHEQUE IS ENOUGH TO COMP LY WITH THE DUE DATE AND IT IS NOT NECESSARY TO GET THE CHEQUE CLEARED BEFORE THE DUE DATE, WHICH IS BEYOND THE CONTROL OF THE ASSESSEE. THE CIT(A) ALLOWED THE ASSESSEES APPEAL AND DIRECTED THE AO TO RECALCULATE THE INTEREST UNDER S ECTIONS 234B AND 234C OF THE ACT AFTER TAKING INTO CONSIDERATION THE DATE OF PRESENTATION OF CHEQUE AS THE DATE OF PAYMENT OF TA X. FOR COMING TO THIS CONCLUSION, THE CIT(A) RELIED UPON T HE DECISION OF THE ITAT, BANGALORE BENCH IN ITA NO.305/BANG/2003 D ATED 2-8-2005 IN THE CASE OF ACIT VS. M/S.MOLEX (INDIA) LTD., WHEREIN IT IS HELD AS UNDER: AFTER HEARING BOTH THE SIDES, WE DO NOT FIND ANY INFIRMITIES IN THE IMPUGNED ORDER. IT APPEARS THAT THE ITA NO.616 & CO 43(BANG)/2010 PAGE 3 OF 5 COMMISSIONER OF INCOME TAX(A) HAS FOLLOWED THE DECISION OF KARNATAKA HIGH COURT IN THE CASE OF SAHARA AIRLINES LTD. VS. COMMISSIONER OF CUSTOMS (APPEALS) (110 TAXMAN 378). FURTHER RELIANCE WAS PLACED ON THE BOARDS CIRCULAR NO.261 DT.8.8.79 AND THE DECISION OF THE SUPREME COURT IN THE CASE OF UC O BANK IN 238 ITR 869. LOOKING TO THE AFORESAID DECISIONS, WE FIND IT IS SETTLED LAW THAT THE DATE OF PRESENTATION OF THE CHEQUE SHOULD BE TREATED THE DA TE OF PAYMENT OF TAX IN SPITE OF THE FACT THAT SOME TI ME WAS REQUIRED FOR REALIZATION OF THE CHEQUE. AGGRIEVED BY THE RELIEF GIVEN BY THE CIT(A), THE RE VENUE IS IN APPEAL BEFORE US AND IN SUPPORT O THE ORDER OF THE CIT(A), THE ASSESSEE HAS PREFERRED CROSS OBJECTION. AS THE CROS S OBJECTION IS ONLY IN SUPPORT OF THE ORDER OF THE CIT(A), THE SAM E IS DISMISSED AS NOT MAINTAINABLE. 4. COMING TO THE REVENUES APPEAL, WE FIND THAT TH E CIT(A) HAS ONLY RELIED UPON THE DECISION OF THE TRI BUNAL IN THE CASE OF M/S.MOLEX (INDIA) LTD WHICH, IN TURN, HAS RELIED ON THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CA SE OF SAHARA AIRLINES LTD. VS. COMMISSIONER OF CUSTOMS (APPEALS) AND ALSO THE DECISION OF THE HONBLE SUPREME COURT IN THE CA SE OF UCO BANK (237 ITR 889) FOR COMING TO THE CONCLUSION THAT THE DATE OF PRESENTATION OF CHEQUE SHOULD BE TREATED AS THE DATE OF PAYMENT OF TAX. AFTER GOING THROUGH THE DECISION O F THE HONBLE SUPREME COURT IN THE CASE OF UCO BANK , WE FIND THAT THE SAID DECISION IS ON A DIFFERENT SET OF FACTS AS RIGHTLY POINTED OUT BY ITA NO.616 & CO 43(BANG)/2010 PAGE 4 OF 5 THE LEARNED DEPARTMENTAL REPRESENTATIVE AND IS THER EFORE NOT APPLICABLE TO THE FACTS OF THE CASE BEFORE US. FUR THER ON GOING THROUGH 110 TAXMAN 378, WE FIND THAT IT IS NOT THE DECISION OF THE HONBLE KARNATAKA HIGH COURT, BUT IT IS THE DEC ISION OF THE MINISTRY OF FINANCE, DEPT. OF REVENUE, GOVT. OF IND IA IN THE CASE OF SAHARA AIRLINES LTD. VS. COMMISSIONER OF CUSTOMS (A PPEALS) WHEREIN IT WAS HELD AS UNDER: A HARMONIOUS READING OF PROVISIONS OF RULE 7 OF TH E CENTRAL GOVERNMENT ACCOUNT (RECEIPTS AND PAYMENT)RULES, 1983 AND RULES 79 AND 80 OF THE TREASURY RULES OF THE CENTRAL GOVERNMENT, MAKE IT C LEAR THAT GOVERNMENT DUES CAN BE PRESENTED IN THE FORM O F CHEQUE INTO THE ACCREDITED BANK. UPON TENDERING OF A CHEQUE, IF IT IS NOT DISHONOURED LATER, IT SHALL BE DEEMED THAT PAYMENT HAS BEEN MADE ON THE DATE WHEN IT WAS HANDED OVER TO THE GOVERNMENT BANKERS. THE SUPREME COURT IN THE CASE OF K.SARASWATT VS. P.S.S.SOMASUNDARAM CHETTIAR (1989) 4 SCC 527 WHILE DEALING WITH A CASE UNDER SECTIONS 1- AND 82 OF THE NEGOTIABLE INSTRUMENTS ACT, 1881 HAS HELD THAT PAYMENT BY CHEQUE SHOULD BE TAKEN TO BE DUE PAYMENT IF THE CHEQUE IS SUBSEQUENTLY ENCASHED IN THE ORDIN ARY COURSE. THE MADRAS HIGH COURT IN CIT V. KUMUDAM PUBLICATIONS (P.) LTD. (1981) 128 ITR 617, WHILE DE ALING WITH THE PAYMENT OF ADVANCE TAX UNDER THE INCOME-TA X ACT, 1961 HAS HELD THAT IN VIEW OF THE TREASURY R ULES WHEN CHEQUES WERE HANDED OVER TO GOVERNMENT OFFICIALS OR TO THE GOVERNMENT OFFICER AUTHORIZED T O RECEIVE PAYMENT ON BEHALF OF THE GOVERNMENT, PAYMEN T WOULD BE DEEMED TO HAVE BEEN MADE ON THE DATE THE CHEQUE WAS HANDED OVER AND THE AMOUNT SHOULD BE TREATED AS PAYMENT OF ADVANCE TAX. IN THE FACTS AND CIRCUMSTANCES OF THE INSTANT CASE, THERE WAS NO DISPUTE ABOUT THE STATUS OF THE BANK AND OF THE DATE OF PRESENTATION OF THE CHEQUES TO THE SAID BAN K TOWARDS PAYMENT OF THE IATT COLLECTED IN THE RESPEC TIVE MONTHS. THE GOVERNMENT, THEREFORE, WOULD ALLOW THE REVISION APPLICATION WITH CONSEQUENTIAL RELIEF BY S ETTING ASIDE THE LOWER AUTHORITIES ORDERS. ITA NO.616 & CO 43(BANG)/2010 PAGE 5 OF 5 4.1 THUS, IN VIEW OF THE DECISIONS OF THE HONBLE SUPREME COURT AND HONBLE MADRAS HIGH COURT REFERRED TO IN THE ABOVE DECISION, WE HOLD THAT THE DATE OF PRESENTATION OF THE CHEQUES IS THE DATE OF PAYMENT OF ADVANCE TAX IF THE CHEQUES H AVE BEEN DULY HONOURED THEREAFTER. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE CHEQUES WERE PRESENTED ON THE DU E DATE AND THEY WERE DULY HONOURED ON THE NEXT WORKING DAY AND THE LEARNED DEPARTMENTAL REPRESENTATIVE ALSO DID NOT RE BUT THE SAID SUBMISSION. 4.2 IN VIEW OF THE SAME, WE HOLD THAT THE REVENUE S APPEAL HAS NO MERIT. IT IS ACCORDINGLY DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 7 TH JANUARY, 2011. SD/- SD/- (DR. O.K. NARAYANAN) VICE PRESIDENT (SMT. P.MADHAVI DEVI) JUDICIAL MEMBER PLACE : BANGALORE DATED: 7 TH JANUARY, 2011. EKS COPY TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) CONCERNED 4. CIT 5. DR, ITAT, BANGALORE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE