ADIT (I.T) 1(2), MUMBAI V. M/s. CREDIT LYONAIS, MUMBAI

ITA 6515/MUM/2004

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 3983 (ITAT-MUMBAI)
• Duration Of Justice: 6 year(s) 1 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-10-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: L
• Next Hearing Date: 30-09-2010
• Assessment Year: 1999-2000
• Appeal Filed On: 10-09-2004
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NARENDRA SINGH
• Assessee Lawyers: P J PARDIWALA
• Keywords: Set aside
• Section: 143(3); 244A; 154

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH L, MUMBAI BEFORE SHRI R.V. EASWAR, HONBLE PRESIDENT AND SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER I.T.A. NO. 6515/MUM/2004. ASSESSMENT YEAR : 1999-2000. ASSTT.. DIRECTOR OF INCOME-TAX (IT), M/S CREDIT LYONNAIS, 1(2), MUMBAI. VS. CALYON BANK, 11 TH FLOOR, HOECHST HOUSE, NARIMAN POINT, MUMBAI 400 021 PAN AAACC1441J (APPELLANT) (RE SPONDENT) APPELLANT BY : SHRI NARENDRA SINGH RESPONDENT BY : SHRI P.J. PARDIWALA & SHRI MADHUR AGRAWAL. O R D E R PER J. SUDHAKAR REDDY : THIS IS AN APPEAL FILED BY THE REVENUE DIRECTED A GAINST THE ORDER OF THE CIT(APPEALS)-XXXI, MUMBAI DATED 24 TH JUNE, 2004 FOR ASSESSMENT YEAR 1999- 2000 ON THE FOLLOWING GROUNDS : 1. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DIRECTING TO DELETE INTEREST U/ S 220(2) OF THE INCOME TAX ACT, 1961 EVEN THOUGH INTEREST ON REFUND U/S 24 4 WAS GRANTED. 2. THE APPELLANT PRAYS THAT THE ORDER OF THE LD. CIT(A ) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE AO RESTORED. 2 2. WE HAVE HERD SHRI NARENDRA SINGH, THE LEARNED CIT-DR AND SHRI P.J. PARDIWALA, LEARNED COUNSEL FOR THE ASSESSEE. 3. THE FACTS OF THE CASE ARE GIVEN AT PAGE 3 OF T HE CIT(APPEALS) ORDER WHICH ARE REPRODUCED BELOW FOR READY REFERENCE : (I) THE AO HAS RAISED A DEMAND OF RS.9,15,37,801 U/ S 143(3) OF THE ACT DATED 20 TH FEBRUARY, 2002. (II) OUT OF THIS DEMAND RAISED, PAYMENT OF RS.3.00 CRORES WAS MADE ON 28 TH MARCH, 2002. (III) AFTER RECTIFYING THE ASSESSMENT ORDER AND CON SIDERING THE PAYMENT MADE OF RS.3.00 CRORES, THIS DEMAND WAS REDUCED TO RS.3,95,83,013/- PER ORDER UNDER SECTION 154 DATED 14 TH MARCH, 2002. (IV) VIDE OUR LETTER NO. VNL/MT/2487 DATED 15 TH MARCH, 2002, WE REQUESTED YOU TO ADJUST THE BALANCE DEMAND PAYABLE AGAINST THE REFUND DUE OF RS.4.50 CRORES (APPROX.) TO OUR CLIENTS FOR THE ASSESSMENT YEAR 1998-99 ON GIVING EFFECT TO THE CIT(APPEALS) ORDER DATED 15 TH JUNE, 2001. (V) PER YOUR INTIMATION DATED 26 TH JUNE, 2002, YOU INFORMED US THAT A REFUND OF RS.4,44,52,028/- HAS BEEN DETERMINED FOR THE ASSESSMENT YEAR 1998-99 AND PROPOSED TO ADJUST IT AGAINST THE DEMAN D PAYABLE OF RS.3,95,83,013/- FOR THE ABOVE YEAR. (VI) REFUND WAS DUE FOR THE ASSESSMENT YEAR 1998-99 SINCE 15 TH JUNE, 2001 BEING THE DATE OF THE CIT(A)S ORDER. HOWEVER, EFFE CT WAS GIVEN TO IT ONLY IN JUNE 2002. THUS, ALMOST A YEAR HAD LAPSED SINCE THE ORDER WAS PASSED BY THE CIT(A). 3 THE ASSESSEE PLEADED THAT IT IS THEREFORE CLEAR THA T THERE WAS DELAY ON PART OF THE DEPARTMENT TO DETERMINE THE REFUND FOR ASSESSME NT YEAR 1998-99 AND ADJUST THE BALANCE DEMAND FOR ASSESSMENT YEAR 1999- 2000 AGAINST THE REFUND DUE FOR ASSESSMENT YEAR 1998-99, AND THAT INTEREST UNDER SECTION 220(2) CANNOT BE CHARGED, AS THE ASSESSEE CANNOT BE MADE T O SUFFER ON ACCOUNT OF THE DELAY IN DETERMINING THE REFUND DUE TO THE ASSE SEE. THE ASSESSEE REQUESTED THE CIT(A) TO DELETE THE INTEREST WRONGL Y CHARGED. 4. THE FIRST APPELLATE AUTHORITY FO LLOWED THE DECISION OF THE TRIBUNAL IN ITA NOS. 1419/MUM/2000 & 1420/MUM/2000 IN THE CASE OF DEUTSCHE BANK AG FOR ASSESSMENT YEAR 1995-96 AND 1996-97 ORDER DATE D 23-02-2004 AND HELD AT PARA 4.4 AND 4.5 OF HIS ORDER AS FOLLOWS : 4.4 I HAVE CONSIDERED THE SUBMISSION MADE BY THE A PPELLANT. CONSIDERING THE FACTS OF THE CASE, I FIND THAT ALTHOUGH THE APP ELLANT HAD REQUESTED THE A.O. TO ADJUST THE DEMAND BEFORE THE DUE DATE FOR T HE PAYMENT, THE SAME DOES NOT APPEAR TO HAVE BEEN DONE AND THE APPELLANT HAS BEEN SUBJECTED TO INTEREST CHARGED UNDER SECTION 220(2) OF THE ACT. F OLLOWING THE DECISION OF THE APPELLATE TRIBUNAL REFERRED TO ABOVE, I DIRECT THE A.O. TO DELETE THE INTEREST CHARGED UNDER SECTION 220(2) OF THE ACT. 4.5 FURTHER, I HAVE BEEN INFORMED THAT INTEREST UND ER SECTION 244A HAS BEEN ALLOWED UPTO MAY 2002 FOR THE ASSESSMENT YEAR 1998-99. SINCE INTEREST CHARGED UNDER SECTION 220(2) HAS BEEN DIRE CTED TO BE DELETED, THE A.O. IS ALSO DIRECTED TO WITHDRAW THE EXCESS INTERE ST UNDER SECTION 244A GRANTED FOR THE MONTH OF APRIL 2002 AND MAY 2002 FO R THE ASSESSMENT YEAR 1998-99, CONSIDERING THE ADJUSTMENT OF REFUND WHICH OUGHT TO HAVE BEEN MADE IN MARCH 2002. 5. THE REVENUE IS AGGRIEVED BY THE FINDINGS OF THE FIRST APPELLATE AUTHORITY GIVEN IN PARA 4.4. THE ASSESSEE HAS ACCEP TED THE ORDER OF THE FIRST APPELLATE AUTHORITY. 4 6. BOTH THE PARTIES AGREED THAT THE ISSUE IN QUEST ION IS COVERED AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE BY THE DECISI ON OF THE MUMBAI C-BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSM ENT YEAR 2001-02 IN ITA NO. 4950/MUM//2006, ORDER DATED 31 ST OCT., 2008, WHEREIN AT PARA 7 IT IS HELD AS FOLLOWS : 7. WE HAVE HEARD THE SUBMISSIONS OF DEPARTMENTAL R EPRESENTATIVE, WHO RELIED ON THE ORDER OF THE ASSESSING OFFICER. IN O UR VIEW, DIRECTIONS OF LEARNED CIT(A) HAVE TO BE UPHELD. UNDER IDENTICAL C IRCUMSTANCES, THIS TRIBUNAL IN ITA NO. 1419 & 1420/MUM/2000 FOR A.Y. 1 995-96 & 1996-97 IN THE CASE OF JCIT VS. DEUTSCHE BANK A.G. HAD HELD THAT INTEREST U/S 220(2) CANNOT BE CHARGED ON THE OUTSTANDING DEMAND AND AS A NATURAL CONSEQUENCES INTEREST U/S 244A ON THE REFUND TO THE EXTENT OF RE FUND IS ADJUSTED AGAINST DEMAND SHOULD NOT BE ALLOWED TO THE ASSESSEE. ORDER OF LEARNED CIT(A) IS IN CONFORMITY WITH THE DECISION OF THE TRIBUNAL REFERR ED TO ABOVE. WE FIND NO INFIRMITY IN THE ORDER OF LEARNED CIT(A). CONSEQUEN TLY, THIS APPEAL BY THE REVENUE IS DISMISSED. 7. RESPECTFULLY FOLLOWING THE SAME, WE UPHOLD THE ORDER OF THE FIRST APPELLATE AND DISMISS THE APPEAL OF THE REVENUE. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH OCT. , 2010. SD/- S D/- (R.V. EASWAR) (J. SUDHAK AR REDDY) PRESIDENT AC COUNTANT MEMBER MUMBAI, DATED: 27 TH OCT., 2010. WAKODE 5 COPY TO : 1. APPELLANT 2. RESPONDENT 3. C.I.T. 4. CIT(A) 5. DR, L-BENCH (TRUE COPY) BY ORDER ASSTT. R EGISTRAR, ITAT, MUMBAI B ENCHES