Whirlpool of India Ltd., Gurgaon V. DCIT (LTU), New Delhi

ITA 6530/DEL/2015

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 4248 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 10 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-10-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Assessment Year: 1997-1998
• Appeal Filed On: 08-12-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MANOJ KUMAR MAHAR
• Assessee Lawyers: TAPAS RAM MISRA
• Section: 143(3); 244A; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : E : NEW DELHI BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SHRI LALIET KUMAR, JUDICIAL MEMBER ITA NO.6530/DEL/2015 ASSESSMENT YEAR : 1997-98 WHIRLPOOL OF INDIA LTD. (AS AGENT OF M/S WHIRLPOOL CORPORATION (USA), WHIRLPOOL HOUSE, PLOT NO.40, SECTOR-44, GURGAON. PAN: AAACW1136L VS. DCIT (LTU), NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI TAPAS RAM MISRA, ADVOCATE DEPARTMENT BY : SHRI MANOJ KUMAR MAHAR, SR. DR DATE OF HEARING : 09.10.2018 DATE OF PRONOUNCEMENT : 10.10.2018 ORDER PER R.S. SYAL, VP: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER PASSED BY THE CIT(A) ON 17.09.2015 IN RELATION TO THE ASSE SSMENT YEAR 1997-98. ITA NO.6530/DEL/2015 2 2. BRIEFLY STATED, THE FACTS ARE THAT AN ORDER U/S 250 READ WITH SECTIONS 143(3) AND 163 OF THE INCOME-TAX ACT, 1961 (HEREINA FTER ALSO CALLED THE ACT) WAS PASSED ON 08.04.2013 GIVING EFFECT TO THE ORDER PASSED BY THE CIT(A) DATED 21.12.2012 ALLOWING THE CREDIT FOR TDS OF RS.51,56,400/- ON ROYALTY PAYABLE REVERSED FOR THE PERIOD 01.01.1997 TO 31.03.1997. THE ASSESSEE FILED A LETTER DATED 21.04.2014 REQUESTING TO GRANT INTEREST U/S 244A OF THE ACT FROM THE PERIOD 01.04.1997 TILL THE GRAN T OF REFUND. THE ASSESSING OFFICER REJECTED THE ASSESSEES APPLICATI ON U/S 154 OF THE ACT HOLDING THAT NO REFUND WAS CLAIMED BY THE ASSESSEE UP TO 28.03.2000, BEING, THE DATE OF ASSESSMENT ORDER. IT WAS FURTHER OBSER VED THAT THE AMOUNT OF REFUND RELATED TO REFUND OF TDS WHICH WAS DEDUCTED BY WHIRLPOOL OF INDIA LTD. U/S 195 OF THE ACT FROM THE ROYALTY AMOUNT CRE DITED IN RESPECT OF THE NON-RESIDENT PARENT COMPANY I.E., WHIRLPOOL CORPORA TION, USA (WC-USA). THE ASSESSING OFFICER HELD THAT THE ASSESSEE WAS NO T ENTITLED TO INTEREST ON REFUND IN VIEW OF CBDT CIRCULAR NO.7/2007 DATED 23. 10.2007. THE ASSESSEE REMAINED UNSUCCESSFUL BEFORE THE LD. FIRST APPELLATE AUTHORITY. 3. HAVING HEARD BOTH THE SIDES AND PERUSED THE RELE VANT MATERIAL ON RECORD, IT IS OBSERVED THAT THERE ARE TWO DIFFERENT ENTITIES, NAMELY, WC-USA ITA NO.6530/DEL/2015 3 WHICH IS THE ASSESSEE UNDER CONSIDERATION, BEING, R EPRESENTED THROUGH WHIRLPOOL OF INDIA LTD. U/S 163 OF THE ACT. WHIRLP OOL INDIA LTD., MADE DEDUCTION OF TAX AT SOURCE ON THE ROYALTY PAYMENTS TO WC-USA. WC-USA INITIALLY DID NOT FILE ITS RETURN. SUCH RETURN WAS FILED ONLY ON 28.04.1999 AFTER A NOTICE U/S 163(2) OF THE ACT WAS ISSUED AND BY SUCH TIME, THE DUE DATE FOR FILING BELATED RETURN HAD ALSO EXPIRED. T HUS, IT IS MANIFEST THAT THE ORDER U/S 154 HAS BEEN PASSED BY THE ASSESSING OFFI CER IN THE NAME OF THE DEDUCTEE WC-USA (THROUGH WHIRLPOOL INDIA LTD., AS A N AGENT U/S 163 OF THE ACT). THE REFUND AROSE IN THE HANDS OF WC-USA BECAUSE OF THE ORDER OF THE LD. CIT(A). IN THIS VIEW OF THE MATTER, IT BECOMES APPARENT THAT THE ASSESSEE IN QUESTION, CLAIMING REFUND, IS DEDUCTEE WC-USA AND NOT THE DEDUCTOR WHIRLPOOL OF INDIA LTD. RELIANCE OF THE A SSESSING OFFICER ON PARA 5 OF THE CBDT CIRCULAR NO.7/2007 DATED 23.10.2007 I S NOT GERMANE TO THE ISSUE BECAUSE THIS PARA GETS APPLIED WHEN THE REFUN D IS CLAIMED BY THE PERSON MAKING PAYMENT U/S 195, I.E., DEDUCTOR AND N OT THE DEDUCTEE. AS IT IS A CASE OF THE DEDUCTEE CLAIMING REFUND, NORMAL PROVISIONS OF SECTION 244A APPLY IN SO FAR AS THE CLAIM OF INTEREST ON RE FUNDS IS CONCERNED. ITA NO.6530/DEL/2015 4 4. SUB-SECTION (1) OF SECTION 244A PROVIDES T HAT WHERE A REFUND OF AMOUNT BECOMES DUE TO THE ASSESSEE UNDER THIS ACT, HE SHALL, SUBJECT TO THE PROVISIONS OF THIS ACT, BE ENTITLED TO RECEIVE, IN ADDITION TO THE SAID AMOUNT, SIMPLE INTEREST THEREON IN THE MANNER LAID DOWN IN THE PROVISION. SUB- SECTION (2) OF SECTION 244A PROVIDES THAT IF THE PR OCEEDINGS RESULTING IN THE REFUND ARE DELAYED FOR THE REASONS ATTRIBUTABLE TO THE ASSESSEE, WHETHER WHOLLY OR IN PART, THE PERIOD OF THE DELAY SO ATTRI BUTABLE TO HIM SHALL BE EXCLUDED FROM THE PERIOD FOR WHICH INTEREST IS PAYA BLE UNDER SUB-SECTION (1) OF SECTION 244A. ADVERTING TO THE FACTS OF THE INS TANT CASE, IT IS SEEN THAT THOUGH DEDUCTION OF TAX AT SOURCE WAS MADE BY WHIRL POOL OF INDIA LTD. IN THE PERIOD RELEVANT TO ASSESSMENT YEAR 1997-98, BUT , THE ASSESSEE-DEDUCTEE DID NOT FILE ITS RETURN OF INCOME VOLUNTARILY. SUC H A RETURN WAS FILED ON 28.04.1999 AFTER NOTICE U/S 163(2) WAS ISSUED. EVE N IN THE SAID RETURN, NO CLAIM OF TDS REFUND WAS MADE AND THE CORRESPONDING INCOME WAS ALSO NOT SHOWN. THE CREDIT WAS CLAIMED DURING THE ASSESSMEN T PROCEEDINGS AND THE ASSESSMENT ORDER WAS PASSED ON 28.03.2000. THUS, I T BECOMES APPARENT THAT THOUGH THE ASSESSEE IS ENTITLED TO INTEREST U/ S 244A(1), BUT, THE DELAY IN THE PERIOD UP TO THE PASSING OF THE ASSESSMENT ORDE R ON 28.03.2000, IS ITA NO.6530/DEL/2015 5 ATTRIBUTABLE TO IT FOR THE REASONS RECORDED HEREINA BOVE. WE, THUS, HOLD THAT THE ASSESSEE IS ENTITLED TO INTEREST ON REFUND U/S 244A OF THE ACT FROM 28.03.2000 I.E., THE DATE OF THE ASSESSMENT ORDER T ILL THE GRANTING OF THE REFUND. 5. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 10.10.201 8. SD/- SD/- [LALIET KUMAR] [R.S. SYAL] JUDICIAL MEMBER VICE PRESIDENT DATED, 10 TH OCTOBER, 2018. DK COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI.