Vardhman Textiles Ltd., Ludhiana V. DCIT, Ludhiana

ITA 63/CHANDI/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 68382 (ITAT-CHANDIGARH)
• Duration Of Justice: 6 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-08-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 04-07-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 21-01-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: SUBHASH AGGARWAL
• Keywords: Reason to believe
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A, CHANDIGARH BEFORE SHRI T.R. SOOD, A.M AND MS. SUSHMA CHOWLA, JM ITA NO. 63/CHD/2013 ASSESSMENT YEAR : 2007-08 VARDHMAN TEXTILES LTD. V D.C.I.T. CIRCLE-I CHANDIGARH ROAD LUDHIANA LUDHIANA AABCM 4692 E (APPELLANT) (RESPONDENT) APPELLANT BY SHRI SUBHASH AGGARWAL RESPONDENT BY: SHRI AKHILESH GUPTA DATE OF HEARING 4.7.2013 DATE OF PRONOUNCEMENT 2.8.2013 O R D E R PER T.R.SOOD, A.M THIS APPEAL IS DIRECTED AGAINST THE ORDER OF THE LD . CIT(A)- II, LUDHIANA DATED 12.11.2012. 2 IN THIS APPEAL THE ASSESSEE HAS RAISED THE FOLLOW ING GROUND: THAT THE LD. CIT(A) HAS ERRED IN UPHOLDING THE ACT ION OF ASSESSING OFFICER WHILE CHARGING INTEREST AMOUNTING TO RS. 35,11,908/- U/S 220(2) OF THE INCOME-TAX ACT, 1 961. 3 AFTER HEARING BOTH THE PARTIES WE FIND THAT ASSES SMENT IN THIS CASE WAS FRAMED U/S 143(3) OF THE ACT VIDE ORD ER DATED 30.12.2009 AND DEMAND OF RS. 9,20,89,570/- WAS DETE RMINED. NOTICE U/S 156 WAS SERVED ON THE ASSESSEE ON 31.12. 2009, THEREFORE, DEMAND WAS PAYABLE ON OR BEFORE 31.1.20 10. THE ASSESSEE HAD FILED APPEAL BEFORE THE LD. CIT(A) WH EREIN SOME RELIEF WAS GRANTED AND THE REMAINING DEMAND OF RS. 8,32,07,007/-. THIS DEMAND HAS BEEN PAID ON VARIOU S DATES ENDING ON 12.8.2011. SINCE THE DEMAND HAS BEEN PAI D LATE, THEREFORE, THE ASSESSING OFFICER LEVIED INTEREST U /S 220(2) OF THE ACT. 2 4 ON APPEAL, IT WAS MAINLY STATED THAT THE ASSESSEE HAD APPLIED FOR STAY AND THE STAY WAS GRANTED TILL THE DISPOSAL OF THE APPEAL BEFORE THE LD. CIT(A), THEREFORE, THE A SSESSEE WAS UNDER THE IMPRESSION THAT NO INTEREST WOULD BE CHAR GED. 5 THE LD. CIT(A) NOTED THAT NO EVIDENCE OF FILING O F STAY WAS FURNISHED BEFORE HIM. EVEN COPY OF THE STAY ORDER WAS NOT PRODUCED. HE WAS OF THE VIEW THAT PROVISIONS OF SE CTION 220(2) OF THE ACT ARE VERY CLEAR, THEREFORE, INTEREST HAS BEEN RIGHTLY LEVIED. 6 BEFORE US, THE LD. COUNSEL OF THE ASSESSEE SUBMIT TED THAT INITIALLY RETURN WAS PROCESSED U/S 143(1) AND REFUN D OF MORE THAN OF RS. 4 CRORES WAS FOUND TO BE DUE. HOWEVER, THIS REFUND WAS ADJUSTED AGAINST THE DEMAND OF OTHER YEARS. SI NCE ORIGINAL REFUND WAS DUE TO THE ASSESSEE, THEREFORE, LEVY OF INTEREST IS NOT CORRECT. 7 ON THE OTHER HAND, THE LD. DR FOR THE REVENUE SU PPORTED THE ORDER OF THE LD. CIT(A). 8 AFTER EXAMINING THE RIVAL SUBMISSIONS CAREFULLY W E FIND THAT UNDER THE SCHEME OF THE ACT WHEN A RETURN IS F ILED FIRST THE SAME HAS TO BE PROCESSED U/S 143(1) AND DEMAND OR R EFUND WHATEVER IS DUE HAS TO BE DETERMINED. IF RETURN WA S DETERMINED THE SAME COULD HAVE BEEN ADJUSTED AGAINS T THE DEMAND OF OTHER YEARS U/S 245 OF THE ACT. OF COURS E SUCH ADJUSTMENT COULD HAVE BEEN MADE ONLY AFTER INTIMATI ON IN WRITING TO THE ASSESSEE. IF THIS WAS VIOLATED THE ASSESSEE COULD HAVE CHALLENGED SUCH ACTION OF ADJUSTMENT OF REFUND SEPARATELY BY WAY OF AN APPEAL AND OR WRIT PETITION . HOWEVER, THIS CANNOT BE MADE A PLEA FOR NON PAYMENT OF DEMAN D. SECTION 220 READS AS UNDER: 3 SECTION 220 - (1) ANY AMOUNT, OTHERWISE THAN BY WAY OF ADVANCE TAX, SPECIFIED AS PAYABLE IN A NOTICE OF DEMAND UND ER SECTION 156 SHALL BE PAID WITHIN 86[THIRTY] DAYS OF THE SERVICE OF THE N OTICE AT THE PLACE AND TO THE PERSON MENTIONED IN THE NOTICE : PROVIDED THAT, WHERE THE 87[ASSESSING] OFFICER HAS ANY 88REASON TO BELIEVE THAT IT WILL BE 88DETRIMENTAL TO REVENUE IF THE FULL PERIOD OF 89[THIRTY] DAYS AFORESAID IS ALLOWED, HE MAY, WITH THE PREVIOU S APPROVAL OF THE 90[JOINT COMMISSIONER], DIRECT THAT THE SUM SPECIFI ED IN THE NOTICE OF DEMAND SHALL BE PAID WITHIN SUCH PERIOD BEING A PER IOD LESS THAN THE PERIOD OF 91[THIRTY] DAYS AFORESAID, AS MAY BE SPEC IFIED BY HIM IN THE NOTICE OF DEMAND. (2) IF THE AMOUNT SPECIFIED IN ANY NOTICE OF DEMAND UNDER SECTION 156 IS NOT PAID WITHIN THE PERIOD LIMITED UNDER SUB-SECTIO N (1), THE ASSESSEE SHALL BE LIABLE TO PAY SIMPLE INTEREST AT 93[94[ONE] PER CENT FOR EVERY MONTH OR PART OF A MONTH COMPRISED IN THE PERIOD COMMENCING FROM THE DAY IMMEDIATELY FOLLOWING THE END OF THE PERIOD MENTION ED IN SUB-SECTION (1) AND ENDING WITH THE DAY ON WHICH THE AMOUNT IS PAID :]. THE ABOVE CLEARLY SHOWS THAT IF DEMAND IS NOT PAID WITHIN 30 DAYS THEN INTEREST HAS TO BE LEVIED. THEREFORE, I N OUR OPINION, LEVY OF INTEREST HAS BEEN RIGHTLY UPHELD BY THE LD. CIT(A) AND ACCORDINGLY WE CONFIRM HIS ORDER. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 2.8.2013 SD/- SD/- (SUSHMA CHOWLA) (T.R. SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 2.8.2013 SURESH COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT/THE C IT(A)/THE DR