Appeal Details
Counselvise Citation
[2015] 140 COUNSELVISE.COM (IT) 100654 (ITAT-MUMBAI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 7 month(s) 24 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
05-08-2015
Appeal Filed By
Assessee
Order Result
Partly Allowed
Bench Allotted
F
Assessment Year
1984-1985
Appeal Filed On
11-12-2013
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH, MUMBAI , . . , BEFORE MS. SUSHMA CHOWLA , JM AND SHRI N.K. BILLAIYA, AM ./ ITA NO. /ASSESSEE ./ PAN 7226/MUM/2013 VAIBHAVI DISCRETIONARY FAMILY TRUST (DEF. CORPUS) AABTV6311L 7251 /MUM/2013 CHANDRA DISCRETIONARY FAMILY TRUST (DEF. CORPUS) AABTC4632R 7259 /MUM/2013 PAVANPUTRA DISCRETIONARY FAMILY TRUST (DEF. CORPUS) AACTP2511R 7268 /MUM/2013 GANSHYAM DISCRETIONARY FAMILY TRUST (DEF. CORPUS) AABTG8593P 7269 /MUM/2013 GANPATI DISCRETIONARY FAMILY TRUST (DEF. CORPUS) AABTG8592N 7258 /MUM/2013 SHIV DISCRETIONARY FAMILY TRUST (DEF. CORPUS) AAMTS3206N 7270 /MUM/2013 TARAK DISCRETIONARY FAMILY TRUST (DEF. CORPUS) AACTT1865A 7254 /MUM/2013 MURARI DISCRETIONARY FAMILY TRUST (DEF. CORPUS) AADTM3096M 7262 /MUM/2013 MAHADEV DISCRETIONARY FAMILY TRUST (DEF. CORPUS) AADTM3097L 7263 /MUM/2013 NARAYAN DISCRETIONARY FAMILY TRUST (DEF. CORPUS) AABTN7318K 7265 /MUM/2013 MUKUND DISCRETIONARY FAMILY TRUST (DEF. CORPUS) AADTM3098F 7266 /MUM/2013 MANMOHAN DISCRETIONARY FAMILY TRUST (DEF. CORPUS) AADTM3094K 7271 /MUM/2013 NILKANTH DISCRETIONARY FAMILY TRUST (DEF. CORPUS) AABTN7319J 7272 /MUM/2013 MURLIDHAR DISCRETIONARY FAMILY TRUST (DEF. CORPUS) AADTM3095J 7253 /MUM/2013 HARIAR DISCRETIONARY FAMILY TRUST (DEF. CORPUS) AABTH1097F 726 1/MUM/2013 HANUMAN DISCRETIONARY FAMILY TRUST (DEF. CORPUS) AABTH1098L 7257 /MUM/2013 JAIMIN DISCRETIONARY FAMILY TRUST (DEF. CORPUS) AABTJ6966B 7260 /MUM/2013 JAGANNATH DISCRETIONARY FAMILY TRUST (DEF. CORPUS) AABTJ6967A 7250 /MUM/2013 KRISHNA DISCRETIONARY FAMILY TRUST (DEF. CORPUS) AACTK1008L ITA NO. 7226 + 53 /MUM/2013 DISCRETIONARY FAMILY TRUST S (DEF. CORPUS) 2 7252 /MUM/2013 DIVAKAR DISCRETIONARY FAMILY TRUST (DEF. CORPUS) AABTD7938D 7255 /MUM/2013 RANCHOD DISCRETIONARY FAMILY TRUST (DEF. CORPUS) AACTR0866M 7264 /MUM/2013 RAYMAN DISCRETIONARY FAMILY TRUST (DEF. CORPUS) AACTR0887L 7273 /MUM/2013 RAM DISCRETIONARY FAMILY TRUST (DEF. CORPUS) AACTR0894H 7274 /MUM/2013 RADHAKRISHAN DISCRETIONARY FAMILY TRUST (DEF. CORPUS) AACTR0888F 72 27 /MUM/2013 VAIRAGI DISCRETIONARY FAMILY TRUST (DEF. CORPUS) AABTV6331Q 72 28 /MUM/2013 VISHODHANA DISCRETIONARY FAMILY TRUST (DEF. CORPUS) AABTV6317N 72 29 /MUM/2013 VIRAG DISCRETIONARY FAMILY TRUST (DEF. CORPUS) AABTV6312K 72 30 /MUM/2013 VAKSHA DISCRETIONARY FAMILY TRUST (DEF. CORPUS) AABTV6318D 72 31 /MUM/2013 VIHARIKA DISCRETIONARY FAMILY TRUST (DEF. CORPUS) AABTV6330R 72 32 /MUM/2013 VISMRUDI DISCRETIONARY FAMILY TRUST (DEF. CORPUS) AABTV6313J 72 33 /MUM/2013 VINODA DISCRETIONARY FAMILY TRUST (DEF. CORPUS) AABTV6319C 72 34 /MUM/2013 VANDITA DISCRETIONARY FAMILY TRUST (DEF. CORPUS) AABTV6332P 72 35 /MUM/2013 VEDNA DISCRETIONARY FAMILY TRUST (DEF. CORPUS) AABTV6314R 72 36 /MUM/2013 VAISHAKHI DISCRETIONARY FAMILY TRUST (DEF. CORPUS) AABTV6333N 72 37 /MUM/2013 VIGITA DISCRETIONARY FAMILY TRUST (DEF. CORPUS) AABTV6334M 72 38 /MUM/2013 VILOMA DISCRETIONARY FAMILY TRUST (DEF. CORPUS) AABTV6320P 72 39 /MUM/2013 VICHALA DISCRETIONARY FAMILY TRUST (DEF. CORPUS) AABTV6321N 72 40 /MUM/2013 UBHAYA DISCRETIONARY FAMILY TRUST (DEF. CORPUS) AAATU5029P 72 41 /MUM/2013 UTTAR DISCRETIONARY FAMILY TRUST (DEF. CORPUS) AAATU5025B 72 42 /MUM/2013 UDYAM DISCRETIONARY FAMI LY TRUST (DEF. CORPUS) AAATU5015H 72 43 /MUM/2013 UTTAM DISCRETIONARY FAMILY TRUST (DEF. CORPUS) AAATU5030G 72 44 /MUM/2013 UMESH DISCRETIONARY FAMILY TRUST (DEF. CORPUS) AAATU5026C 72 45 /MUM/2013 UDAYAN DISCRETIONARY FAMILY TRUST (DEF. CORPUS) AAATU5016E ITA NO. 7226 + 53 /MUM/2013 DISCRETIONARY FAMILY TRUST S (DEF. CORPUS) 3 72 46 /MUM/2013 UNNAT DISCRETIONARY FAMILY TRUST (DEF. CORPUS) AAATU5027D 72 47 /MUM/2013 UTAKAL DISCRETIONARY FAMILY TRUST (DEF. CORPUS) AAATU5017F 72 48 /MUM/2013 URVESH DISCRETIONARY FAMILY TRUST (DEF. CORPUS) AAATU5018L 72 49 /MUM/2013 UPENDRA DISCRETIONARY FAMILY TRUST (DEF. CORPUS) AAATU5019M 72 56 /MUM/2013 UMAPATI DISCRETIONARY FAMILY TRUST (DEF. CORPUS) AAATU5020E 72 67 /MUM/2013 VITHAL DISCRETIONARY FAMILY TRUST (DEF. CORPUS) AABTV6322R 72 75 /MUM/2013 ULLAS DISCRETIONARY FAMILY TRUST (DEF. CORPUS) AAATU5021F 72 76 /MUM/2013 UPPLAV DISCRETIONARY FAMILY TRUST (DEF. CORPUS) AAATU5028N 72 77 /MUM/2013 UJAVAL DISCRETIONARY FAMILY TRUST (DEF. CORPUS) AAATU5022G 72 78 /MUM/2013 UD AN DISCRETIONARY FAMILY TRUST (DEF. CORPUS) AAATU5023H 72 79 /MUM/2013 UCHITA DISCRETIONARY FAMILY TRUST (DEF. CORPUS) AAATU5024A ( / ASSESSMENT YEAR : 1984 - 85 ) C/O SEVENTILAL N. SHAH & CO. 28, DALAMAL CHAMBERS 2ND FLOOR , 17, NEW MARINE LINES MUMBAI 400020 / VS. INCOME TAX OFFICER - 12(2)(1) MUMBAI ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI RAJENDRA D. SHAH / RESPONDENT BY : MS. VANDANA SAGAR / DATE OF HEARING : 27.07. 2015 / DATE OF PRONOUNCEMENT : 05 .08 .2015 / ORDER PER BENCH THESE APPEAL S BY THE ASSESSEES ARE DIRECTED AGAINST THE CONSOLIDATED ORDER DATED 30/09/2012 PASSED BY THE CIT(A) - 23, MUMBAI AND THEY PER TAIN TO ASSESSMENT YEAR 1984 - 85 AGAINST ORDER PASSED UNDER SECTION 154 OF THE ACT. ITA NO. 7226 + 53 /MUM/2013 DISCRETIONARY FAMILY TRUST S (DEF. CORPUS) 4 2. ALL THE APPEALS RELATING TO DIFFERENT ASSESSEES ON SIMILAR ISSUE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. HOWEVE R, REFERENCE IS BEING MADE TO THE FACTS IN THE CASE OF ITA NO. 7226/MUM/2013. 3. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE IN ITA NO. 7226/MUM/ 2013 READS AS UNDER: - 1) IN LAWS AND IN FACTS AND CIRCUMSTANCES OF THE APPELLANTS CASE, THE LEARNED CIT(A) HAS GROSSLY ERRED IN THE POINTS OF LAW AND FACTS. 2) IN LAWS AND IN FACTS AND CIRCUMSTANCES OF THE APPELLANTS CASE, THE LEARNED CIT(A) HAS GROSSLY ERRED IN HOLDING THAT THE APPELLANT IS NOT ENTITLED TO INTEREST ON REFUND OF RS.40,442/ - . 3) IN LAWS AND IN FACTS AND CIRCUMSTANCES OF THE APPELLANTS CASE, THE LEARNED CIT(A) HAS GROSSLY ERRED IN HOLDING THAT APPELLANT IS NOT ELIGIBLE FOR INTEREST ON REFUND OF RS.11,138/ - . 4) IN LAWS AND IN FACTS AND CIRCUMSTANCES OF THE APPELLANTS CASE, THE LEARNED CIT(A) HAS GROSSLY ERRED IN HOLDING THAT APPELLANT IS NOT ELIGIBLE FOR INTEREST ON INTEREST. 4. THE ISSUE RAISED IN THE PRESENT APPEAL IS AGAINST THE ALLOWABILITY OF INTEREST ON REFUNDS DUE AND PAID TO THE ASSESSEE. THE ASSESSEE HA S ALSO RAISED GROUND OF APPEAL AGAINST ALLOWING INTEREST ON INTEREST. 5. THE LEARNED A.R. FOR THE ASSESSEE AT THE OUTSET POINTED OUT THAT THE ISSUE RAISED IN THE PRESENT BUNCH OF APPEALS IS IDENTICAL AND IS SIMILAR TO THE ISSUE BEFORE THE TRIBUNAL IN THE GROUP OF OTHER BENEFICIARIES AND IS CONSEQUENTLY COVERED BY THE SAID DECISION OF THE TRIBUNAL DATED 25.03.2015. THE LEARNED A.R. FOR THE ASSESSEE TOOK US THROUGH THE FACTS OF THE CASE AND THEN ALSO REFERRED TO THE ORDER OF THE TRIBUNAL TO PLEAD THAT ON IDENTICA L FACTS THE TRIBUNAL HELD THE ASSESSEE TO BE ELIGIBLE FOR INTEREST ON REFUNDS THOUGH THE TRIBUNAL DISMISSED THE PLEA OF THE ASSESSEE WITH REGARD TO INTEREST ON INTEREST. IT WAS FAIRLY POINTED OUT BY THE LEARNED A.R. FOR THE ASSESSEE THAT OUT OF THE LIST OF BENEFICIARIES OF M/S. K. KACHARADAS PATEL SPECIFIC FAMILY TRUST HAVING 0.5% DEFERRED SHARES IN THE PARENT TRUST, I.E. THE LIST OF ASSESSEES BEING DEFERRED CORPUS, HOWEVER THE ISSUE WAS IDENTICAL TO OTHER BENEFICIARIES IN SCHEDULE - 1. ITA NO. 7226 + 53 /MUM/2013 DISCRETIONARY FAMILY TRUST S (DEF. CORPUS) 5 6. THE LEARNED D.R. FOR T HE REVENUE POINTED OUT THAT NO INTEREST WAS ALLOWABLE ON INTEREST. HOWEVER, THE LEARNED D.R. DID NOT CONTROVERT THE CLAIM OF THE LEARNED A.R. FOR THE ASSESSEE THAT THE ISSUE IS COVERED BY THE ORDER OF THE TRIBUNAL ON IDENTICAL FACTS. 7. WE HAVE HEARD THE RIVA L SUBMISSIONS AND CAREFULLY PERUSED THE RECORD. BRIEFLY, IN THE FACTS OF THE PRESENT CASE THE ASSESSEE WAS DEFERRED CORPUS AND WAS BENEFICIARY OF M/S. K. KACHRADAS PATEL SPECIFIC FAMILY TRUST DERIVING @5% ACCUMULATED BENEFICIARY SHARE, AS PER SCHEDULE - II A TTACHED AND FORMING PART OF THE TRUST DEED. FOR THE YEAR UNDER CONSIDERATION, I.E. ASSESSMENT YEAR 1984 - 85 THE ASSESSEE DECLARED BENEFICIARY SHARE AND INTEREST INCOME FROM THE SAID TRUST. HOWEVER, THE AO INCHARGE OF M/S. K. K ACHRADAS PATEL SPECIFIC FAMILY TRUST HELD THAT SUBSTANTIVE ASSESSMENT OF THE INCOME HAD TO BE MADE IN THE HANDS OF THE TRUST. CONSEQUENT THERETO THE AO INCHARGE OF THE ASSESSEE COMPLETED THE ASSESSMENT UNDER SECTION 143(3) OF THE ACT ON PROTECTIVE BASIS. THE TRUST CARRIED THE MATTER BEF ORE THE APPELLATE AUTHORITIES. HOWEVER, SUBSEQUENTLY THE SAID TRUST DECLARED THE SAID INCOME UNDER KVSS SCHEME AND PAID DUE TAXES THEREON. THE CERTIFICATE OF INCOME IN THE HANDS OF M/S. K. KACHRADAS PATEL SPECIFIC FAMILY TRUST WAS ISSUED UNDER THE KVSS SCH EME. THE AO, CONSEQUENT THERETO, PASSED AN ORDER UNDER SECTION 155(2) OF THE ACT DATED 28.11.2000 UNDER WHICH HE DELETED THE INCOME WHICH WAS PROTECTIVELY ASSESSED IN THE HANDS OF THE ASSESSEE SINCE SUBSTANTIVE ADDITION WAS MADE IN THE HANDS OF THE TRUST. THEREAFTER THE AO GRANTED REFUND OF TAX TO THE ASSESSEE AS UNDER: - TOTAL TAXES PAID RS. 51,580/ - LESS: REFUNDED VIDE ORDER DT. 29/2/88 RS. 40,442/ - BALANCE REFUND DUE RS. 11,138/ - 8. CONSEQUENT TO THE SAID ORDER PASSED UNDER SECTION 155(2) OF THE ACT, THE ASSESSEE MOVED AN APPLICATION UNDER SECTION 154 OF THE ACT REQUESTING INTEREST ON REFUND OF ` 40,442/ - TILL 29.02. 1988 AND INTEREST ON REFUND OF ` 11,138/ - TILL 28.11.2000. ON ADVANCE T AX, ASSESSEE SOUGHT INTEREST FROM 01.04.1984 AND ON SELF - ASSESSMENT TAX ASSESSEE SOUGHT INTEREST FROM THE DATE OF PAYMENT, I.E. JUNE, 1984. FURTHER CLAIM WAS MADE FOR ISSUE OF ITA NO. 7226 + 53 /MUM/2013 DISCRETIONARY FAMILY TRUST S (DEF. CORPUS) 6 COMPENSATORY INTEREST. THE AO, VIDE ORDER PASSED UNDER SECTION 154/155 OF THE AC T DATED 02.12.2012 REJECTED THE CLAIM OF THE A SSESSEE WHICH WAS CONFIRMED BY THE CIT(A). THE ASSESSEE IS IN APPEAL AGAINST THE SAID ORDER OF THE CIT(A). 9. WE FIND THAT THE TRIBUNAL, IN THE BUNCH OF APPEALS WITH LEAD ORDER IN THE CASE OF VAIBHAVI DISCRETIONAR Y FAMILY TRUST IN ITA NO. 6298/MUM/2013 RELATING TO ASSESSMENT YEAR 1984 - 85, VIDE ORDER DATED 25.03.2015, TOOK NOTE OF THE FACTUAL ASPECTS OF THE CASE WHICH ARE AS UNDER: - 3. BRIEFLY STATED THE FACTS ARE AS UNDER: THE ASSESSEES ARE BENEFICIARY OF K. KACHARADAS PATEL SPECIFIC FAMILY TRUST HAVING 0.5% PRESENT SHARE IN PARENT TRUST. THE ASSESSEE TRUST ALSO DERIVED 0.5% DEFERRED SHARE. FOR ASSESSMENT YEAR 1984 - 85 RETURN WAS FILED WITH ITO,A - 1, MUMBAI ON 23/6/1984 SHOWING TOTAL INCOME OF RS.1,10, 290/ - OF WHICH TAXES WERE PAID AT A SUM OF RS.51,580/ - . THE RETURNED INCOME WAS ACCEPTED VIDE ORDER DATED 27/2/1987 PASSED UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961(THE ACT). HOWEVER, THE ASSESSMENT WAS MADE ON PROTECTIVE BASIS AS THE INCOME WAS A SSESSED TO TAX ON SUBSTANTIVE BASIS IN THE CASE OF MAIN TRUST NAMELY K. KACHARA PATEL SPECIFIC FAMILY TRUST. THE MAIN TRUST WAS AGITATING THE MATTER IN FURTHER APPEALS. HOWEVER, THE MAIN TRUST NAMELY K. KACHARA PATEL SPECIFIC FAMILY TRUST SETTLED THE DISPUTE UNDER KVSS. IN VIEW OF THIS DEVELOPMENT, THE INCOME IN THE HANDS OF THIS PRESENT TRUSTS WERE DELETED BY THE AO UNDER SECTION 16(5) OF THE ACT VIDE ORDER DATED 28/11/2000 PASSED UNDER SECTION 155 OF THE ACT AND INCOME OF THESE ASSESSEES WERE COM PUTED AT NIL. THE AO ALLOWED THE REFUND AS UNDER: TOTAL TAXES PAID RS. 51,580/ - LESS: REFUNDED VIDE ORDER DT. 29/2/88 RS. 40,442/ - BAL. REFUND DUE RS. 11,138/ - THE ASSESSING OFFICER ALLOWED REFUND OF RS.11,138/ - AS PER THE ABOVE CALCULATION THE ASSESSEE SUBMITTED RECTIFICATION APPLICATION DATED 7/12/2000 SEEKING FOLLOWING REFUND: 1) REFUND OF RS.40,442/ - , ALLEGEDLY TRANSFERRED IN THE CA SE OF MAIN TRUST ALONGWITH DUE INTEREST. 2) INTEREST ON REFUND AS ALSO INTEREST ON INTEREST. 3.1 THE ASSESSEE FILED RECTIFICATION APPLICATION DATED 5/10/2012 FOR INTEREST ON REFUND UNDER SECTION 244A OF THE ACT TILL THE DATE OF REFUND, WHICH HAS BE EN DENIED TO THE ASSESSEE BY AO AND ALSO BY LD. CIT(A). THE ASSESSEE IS AGGRIEVED, HENCE, HAS FILED AFOREMENTIONED GROUNDS OF APPEAL. ITA NO. 7226 + 53 /MUM/2013 DISCRETIONARY FAMILY TRUST S (DEF. CORPUS) 7 3.2 FOR THE SAKE OF COMPLETENESS OF THE FACTS IT MAY BE MENTIONED HERE THAT ASSESSEE HAS PAID ADVANCE TAX OF RS.31,780/ - AND SELF ASSESSMENT TAX OF RS.19,800/ - . THE TOTAL AMOUNT OF TAX PAID BY THE ASSESSEE IS A SUM OF RS.51, 580/ - . AS PER INCOME TAX COMPUTATION FORM DATED 28/11/2000, COPY OF WHICH HAS BEEN FILED AT PAGES 10 TO 11 OF THE PAPER BOOK. IT IS IN PURSUANCE TO OR DER PASSED UNDER SECTION 155(2) OF THE ACT AND AS PER SAID COMPUTATION A REFUND OF RS.40,442/ - WAS GRANTED VIDE ORDER DATED 29/02/1988 AND BALANCE AMOUNT OF RS.11,138/ - WAS REFUNDED TO T HE ASSESSEE. THE ASSESSEE IS SEEKING INTEREST ON THE AFOREMENTIONED RE FUND OF 40,442/ - UPTO THE DATE 29/2/1988 AND FOR A SUM OF RS.11,138/ - UPTO 28/11/2000. 3.3 IT IS UNDISPUTED FACT THAT IN VIEW OF THE SUBSTANTIAL ASSESSABILITY OF THE INCOME IN THE HANDS OF THE MAIN TRUST NO INCOME IS ASSESSABLE IN THE HANDS OF THESE ASS ESSEES. THUS, IT IS THE CASE OF THE ASSESSEE THAT WHATEVER TAX IS REFUNDED TO THE ASSESSEE, THE ASSESSEE IS ENTITLED TO GET INTEREST ON THE SAID REFUND UNDER THE PROVISIONS OF SECTION 244(1A) OF THE ACT. IT IS THE CASE OF THE ASSESSEE THAT ON SIMILAR FACTS AND CIRCUMSTANCES IN THE CASES OF OTHER BENEFICIARIES THERE IS DECISION OF SPECIAL BENCH, WHICH IS DATED 7/7/2006, COPY OF WHICH IS FILED AT PAGES 33 TO 63 OF THE PAPER BOOK AND IT WAS DECIDED BY THE SPECIAL BENCH THAT THE BENEFICIARIES ARE ENTITLED TO G ET THE INTEREST. THE SPECIAL BENCH WHILE DECIDING THIS ISSUE IN FAVOUR OF THE ASSESSEE HAS CONSIDERED THE PROVISIONS OF KVSS 1998 AND AFTER CONSIDERING THOSE PROVISIONS IT WAS HELD THAT INTEREST WAS RIGHTLY GRANTED TO THE ASSESSEE. IN THE CASES BEFORE SP ECIAL BENCH INITIALLY SUCH INTEREST WAS GRANTED BY THE AO WHICH WAS WITHDRAWN BY THE CIT U/S.263 AND IT WAS HELD THAT INTEREST WAS RIGHTLY GRANTED BY THE AO. REFERENCE WAS MADE TO THE FOLLOWING OBSERVATIONS OF THE SPECIAL BENCH. 27. WE HEARD BOTH SIDES I N DETAIL AND CONSIDERED THE MATTER IN THE LIGHT OF THE EARLIER ORDERS OF THE DIFFERENT BENCHES OF THE TRIBUNAL ON THE SUBJECT AND THE PLETHORA OF MATERIALS PLACED BEFORE US ALONG WITH ASSESSMENT, APPEAL AND REVISION ORDERS. 28. THE FIRST ISSUE THAT CAME UP FOR CONSIDERATION IS WHETHER THE DISPUTE REGARDING THE ISSUE INVOLVED IN THESE APPEALS WERE CONTINUED TO EXIST AT THAT POINT, OF TIME. WE FIND THAT THIS QUESTION IS QUITE ACADEMIC. THE MAIN TRUSTS HAVE SOUGHT SETTLEMENT OF THEIR SUBSTANTIVE ASSESSMENTS UNDER KVSS WHICH HAVE BEEN ACCEPTED AND ACTED UPON BY THE DEPARTMENT. THAT ITSELF SHOWED THAT THE CONTROVERSY CONTINUED AND EXISTED AT THAT POINT OF TIME AND THERE IS NO DOUBT THAT THE ISSUE WAS PENDING BEFORE THE HIGH COURT IN REFERENCE JURISDICTION. THEREFORE, TO MAKE THE MATTER CLEAR, WE STATE THAT THE COMMISSIONER OF INCOME - TAX WAS NOT CORRECT IN HOLDING THAT SUCH A CONTROVERSY DID NOT EXIST. 29. WE FURTHER FIND THAT THE ANSWER TO THE CONTROVERSY CROPPED UP IN THESE CASES IS AVAILABLE IN THE RELEVANT INSTRUCTIONS ISSUED BY THE CBDJ IN THE CONTEXT OF KAR VIVAD SAMADHAN SCHEME, 1998. WE HAVE ALREADY SEEN THE RELEVANT QUESTION AND ANSWER TO THE ITA NO. 7226 + 53 /MUM/2013 DISCRETIONARY FAMILY TRUST S (DEF. CORPUS) 8 QUESTION. THE CBDT HAS STATED IN UNEQUIVOCAL TERMS THAT DECLARATIONS ARE TO BE MA DE IN RESPECT OF SUBSTANTIVE ASSESSMENTS. THE BOARD HAS CLARIFIED THAT THE PROTECTIVE DEMAND IS NOT SUBJECT TO RECOVERY UNLESS IT IS FINALLY UPHELD. THE BOARD HAS FURTHER EXPLAINED THAT ONCE THE DECLARATION IN A SUBSTANTIVE CASE OR YEAR IS ACCEPTED, TH E TA X ARREAR IN PROTECTIVE CASE / YEAR WOULD NO LONGER BE VALID AND WILL BE RECTIFIED BY SUITABLE ORDERS IN THE NORMAL COURSE. IN THE PRESENT CASE SUBSTANTIVE ASSESSMENTS HAVE BEEN MADE BY THE DEPARTMENT IN THE HANDS OF MAIN TRUSTS. PROTECTIVE ASSESSMENTS HAVE BEEN MADE IN THE CASE OF BENEFICIAL TRUSTS. MAIN TRUSTS HAVE SETTLED THE DISPUTE UNDER KVSS. THEY HAVE PAID THE TAX UNDER KVSS IN RESPECT OF THE ASSESSMENT COMPLETED IN THEIR HANDS ON SUBSTANTIVE BASIS. THEREFORE, IN THE LIGHT OF THE CIRCULAR, THE CORRESP ONDING PROTECTIVE ASSESSMENTS MADE IN THE HANDS OF BENEFICIAL TRUSTS WOULD FADE AWAY AND THE DEMAND RAISED IN THAT PROTECTIVE ASSESSMENT WOULD NO LONGER BE VALID. WHEN THE ASSESSMENT IS NOT SUBSISTING AND THE DEMAND IS NOT VALID, THE AMOUNT PAID BY THE ASS ESSEE ALONG WITH THE RETURN SUBJECT TO PROTECTIVE ASSESSMENT BECOMES REFUNDABLE TO THE ASSESSEE. THEREFORE, WE ARE OF THE CONSIDERED OPINION THAT THE ASSESSING OFFICER HAS RIGHTLY ACCEPTED THE PRAYERS OF THE ASSESSEES AND PASSED APPROPRIATE ORDERS EXCLUDIN G THE INCOMES WHICH HAVE ALREADY BEEN CONSIDERED IN THE HANDS OF THE MAIN TRUSTS UNDER KVSS. THEREFORE, OBVIOUSLY, THE ASSESSING OFFICER IS JUSTIFIED IN FOLLOWING THE CONSEQUENTIAL PROCEDURE AND MAKING REFUND TO THE ASSESSEES. 30. ONE OF THE BASIC PRINCIPL ES OF TAXATION IS THAT THE INCOME SHALL NOT BE TAXED TWICE. IN THE PRESENT CASE, THE INCOME UNDER DISPUTE IS THE SAME CONSIDERED IN THE HANDS OF THE MAIN TRUSTS AND ALSO CONSIDERED IN THE HANDS OF THE BENEFICIAL TRUSTS. KAR VIVAD SAMADHAN SCHEME, 1998 WAS INTRODUCED BY GOVERNMENT OF INDIA TO SETTLE THE PENDING LITIGATIONS AT DIFFERENT LEVELS AND COLLECT THE TAX ONCE FOR ALL AND REACH FINALITIES IN THE MATTERS CONNECTED THERETO. EVEN THOUGH KVSS WAS A SPECIAL SCHEME, THE KVSS DID NOT PROPOSE TO TAX ANY I NCOME TWICE. WHETHER UNDER THE REGULAR PROVISIONS OF THE INCOME - TAX ACT OR UNDER THE SCHEME OF KVSS WHAT IS TO BE ASSESSED AND SUBJECTED TO TAX IS THE REAL INCOME ONCE FOR ALL. KVSS DOES NOT CREATE ANY ARTIFICIALITY. A CASE OF DOUBLE TAXATION OF THE SAME I NCOME CANNOT BE ENDORSED UNDER THE KVSS. IN OTHER WORDS, THE KAR VIVAD SAMADHAN SCHEME, 1998 DOES NOT EMPOWER THE INCOME - TAX DEPARTMENT TO TAX THE SAME INCOME MORE THAN ONCE. THIS MUST BE MADE VERY CLEAR. 31. WHAT ARE THE SIMPLE FACTS AVAILABLE IN THESE C ASES? THE INCOMES OF THE MAIN MAIN TRUST HAVE BEEN DISTRIB UTED TO THE BENEFICIARY TRUSTS. THE BENEFICIARY TRUSTS HAVE FILED RETU RNS IN THEIR INDIVIDUAL HANDS. THIS POSITION WAS NOT ACCEPTED BY THE REVENUE. THEREFORE, SUBSTANTIVE ITA NO. 7226 + 53 /MUM/2013 DISCRETIONARY FAMILY TRUST S (DEF. CORPUS) 9 ASSESSMENTS HAVE BEEN MADE IN THE HANDS OF MAIN TRUSTS. IN ABUNDANT PRECAUTION PROTECTIVE ASSESSMENTS HAVE BEEN MADE IN THE HANDS OF THE RESPECTIVE BENEFICIARY TRUSTS. SUPPOSE THE PROPOSITION MADE OUT BY THE DEPARTMENT WAS ACCEPTABLE TO THE ASSESSEE AND THE SUBSTANTIVE ASSESSMENTS MADE IN THE HANDS OF THE MAIN TRUSTS HAVE BEEN ACCEPTED BY THE ASSESSEE, WHAT WOULD BE THE POSITION OF THE CORRESPONDING PROTECTIVE ASSESSMENTS MADE IN THE HANDS OF THE BENEFICIARY TRUSTS? THE PROTECTIVE ASSESSMENTS WOULD HAVE BECOME INVALID AS A RESU LT OF WHICH THE REVENUE WOULD REFUND THE AMOUNT OF TAX IF ANY PAID BY THE BENEFICIARY TRUSTS WHILE FILING THE RETURNS OF INCOME IN THEIR INDIVIDUAL CAPACITIES. THERE CANNOT BE ANY DISPUTE ON THIS PROPOSITION. IS IT POSSIBLE TO HOLD THAT THE ABOVE POSITION WOULD BE DISTURBED ONLY BECAUSE OF THE INTERVENTION OF KVSS . THE MAIN TRUSTS HAVE SETTLED THEIR SUBSTANTIVE ASSESSMENTS UNDER KVSS WHICH FOR ALL PRACTICAL PURPOSES IS EQUIVALENT TO FINALLY SETTLING THE SUBSTANTIVE ASSESSMENTS IN THEIR HANDS. THE FINAL OUTC OME OF THE WHOLE PROCESS IS NOT DIFFERENT FROM THE SUBSTANTIVE ASSESSMENTS HAVING BEEN ACCEPTED BY THE ASSESSEES AS SUCH OR HAVING BEEN SETTLED UNDER AN AVAILABLE SCHEME KNOWN AS KAR VIVAD SAMADHAN SCHEME, 1995. IN EITHER CASE THE PROTECTIVE ASSESSMENTS BE COME INVALID WHEREBY NO DEMAND CAN BE ENFORCED AGAINST THOSE PROTECTIVE ASSESSMENTS. THE CONSEQUENCE IS THAT IF THE ASSESSEES HAVE PAID ANY AMOUNT OF TAX ALONG WITH THEIR RETURNS CONSIDERED FOR PROTECTIVE ASSESSMENTS, SUCH TAXES HAVE TO BE REFUNDED TO THEM . 32. WE DO NOT FIND MUCH FORCE ON THE RELIANCE PLACED BY THE LEARNED STANDING COUNSEL ON THE DECISION OF THE GUJARAT HIGH COURT IN THE CASE OF SAURASHTRA CEMENT & CHEMICAL INDUSTRIES VS. ITO 194 PER 659. IN THAT CASE THERE WAS NO ASSESSMENT AT ALL AND TH E QUESTION OF REFUND WAS CONSIDERED IN THAT PERSPECTIVE WHICH IS QUITE DIFFERENT FROM THE PRESENT CASE. THE INCOME INVOLVED IN THE SUBSTANTIVE ASSESSMENT AS WELL AS IN THE PROTECTIVE ASSESSMENTS ARE ONE AND THE SAME. THE INCOME HAS BEEN ASSESSED SUBSTANTIV ELY IN THE HANDS OF THE MAIN TRUSTS AND THE DEMAND SUBSEQUENTLY SETTLED UNDER KVSS. IT IS QUITE UNNECESSARY TO REPEAT THAT THE INCOME HAS ALREADY BEEN ASSESSED IN THE HANDS OF THE MAIN TRUSTS. THEREFORE, NOTHING REMAINS THEREAFTER TO BE ASSESSED IN THE HA NDS OF THE BENEFICIARY TRUSTS, AS FAR AS THE INCOME OF MAIN TRUST IS CONCERNED. MOREOVER, A CASE OF ASSESSMENT CAN BE CONTEMPLATED IN THE PRE5ENT CASES BECAUSE THE STAND TAKEN BY THE ASSESSEES IS THAT THE, INCOME OF THE MAIN TRUSTS HAS TO BE ASSESSED IN TH E HANDS OF THE INDIVIDUAL BENEFICIARY TRUSTS. IT IS ON THE BASIS OF THAT PROPOSITION THAT THE RETURNS WERE FILED BY THE BENEFICIARY TRUSTS. WHILE RETURNS WERE FILED BY THE BENEFICIARY TRUSTS IN THEIR INDIVIDUAL CAPACITIES THEY ARE IN FACT OFFERING INCOME F OR TAXATION. SECTION 140A PROVIDES THAT WHEN AN ASSESSEE FILES A RETURN OF INCOME AND WHERE TAX IS DUE AS PER THE SAID RETURN, THE TAX SHALL BE PAID BY THE ASSESSEE BEFORE FILING THE RETURN OF INCOME AND THE PROOF OF SUCH PAYMENT OF TAX PROOF OF SUCH PAY MENT OF TAX ITA NO. 7226 + 53 /MUM/2013 DISCRETIONARY FAMILY TRUST S (DEF. CORPUS) 10 SHALL BE ACCOMPANIED ALONGWITH THE RETURN OF INCOME. THIS IS CALLED SELF - ASSESSMENT. WHEN AN ASSESSEE FILES A RETURN WITH POSITIVE INCOME AND REMITS TAX THEREON U/S 140A, IN FACT, AN ASSESSMENT IS BEING CONTEMPLATED EVEN THOUGH IT IS A SEL F - ASSESSMENT. LATER ON, WHEN IT IS FOUND THAT THE INCOME COVERED BY THE SAID RETURN IS NOT TAXABLE THE TAX PAID BY THE ASSESSEE IN PURSUANCE OF THAT RETURN HAS TO BE RETURNED BY THE REVENUE. THEREFORE, REFUND OF TAX IS A MUST IN THIS CASE. THE PROPOSITION MADE BY THE CIT AGAINST THE REFUND OF TAX IS NOT PROPER. 33. REGARDING THE GRANT OF INTEREST ALSO, THE POSITION IS VERY CLEAR. AS ALREADY OBSERVED IN THE ABOVE PARAGRAPH, THE REFUND OF TAX IN THE PRESENT CASE IS A MANDATE OF LAW. WHEN SUCH A REFUND IS CA LLED FOR, INTEREST HAS TO BE PAID AS INTEREST IS COMPENSATORY IN NATURE. IT ALWAYS MOVES WITH THE PRINCIPLE AMOUNT. 34. THERE IS NO SUBSTANCE IN THE ARGUMENT OF THE REVENUE THAT THE DELAY N THE REFUND WAS CAUSED BECAUSE OF THE CONDUCT OF THE ASSESSEES. IN FACT, THE ASSESSEE WAS QUESTIONING THE PROPOSITION OF THE REVENUE TO ASSESS THE INCOME IN THE HANDS OF THE MAIN TRUSTS. THAT IS WHY THE BENEFICIARY TRUSTS HAVE FILED THEIR INDIVIDUAL RETURNS OF INCOME DISCLOSING THE BENEFITS RECEIVED FROM THE MAIN TRUSTS A LSO. BUT WHEN KVSS WAS PRONOUNCED BY THE GOVERNMENT OF INDIA, IT WAS FOR THE ASSESSEES TO DECIDE WHETHER TO TAKE BENEFIT OUT OF THAT OR NOT. THEREFORE, IT IS ONLY WHEN KVSS WAS PROMULGATED, THE ASSESSEE HAD AN OCCASION TO MAKE A MOVE AND SETTLE THE DISPUTE . SO ALSO THE PROCEEDINGS WERE LOCKED UP IN DIFFERENT APPELLATE FORUMS. THEREFORE, THERE IS NO MERIT IN THE ARGUMENT OF THE REVENUE THAT THE DELAY WAS CAUSED BY THE CONDUCT OF THE ASSESSEES. 35. THEREFORE, WE ALSO FIND THAT THE ASSESSING OFFICER HAS RIGHTL Y GRANTED INTEREST TO THE ASSESSEES ON REFUNDS DUE TO THEM. 3.4 IT IS ALSO THE CASE OF THE ASSESSEE THAT THE SAID ORDER OF THE SPECIAL BENCH HAS BEEN UPHELD BY HONBLE GUJARAT HIGH COURT AND REFERENCE WAS MADE TO THE DECISION DATED 26/6/2008 IN I.T APPEAL S NOS. PUNITBEN K. PATEL OSFDT AND OTHERS 284 CASES TAX APPEAL NOS. 1514 TO 1797 OF 2006, MANJULABEN PRAMODBHAI PATEL AND OTHERS, 64 CASES, TAX APPEAL NOS. 573 TO 618 AND 1216 TO 1233 OF 2007 AND JANAK PRAMODBHAI PATEL AND OTHERS 6 CASES, TAX APPEAL NOS. 182 & 204 OF 2002 WITH TAX APPEAL NOS. 27 OF 30 OF 2004. COPY OF THIS ORDER IS FILED AT PAGES 64 TO 96 OF THE PAPER BOOK . 3.5 SO FAR AS IT RELATES TO FINDINGS OF THEIR LORDSHIPS ON GRANT OF INTEREST OUR ATTENTION WAS INVITED TO THE FOLLOWING OBSERVATION S: AS REGARDS GRANT OF INTEREST ON REFUND, WE FIND THAT TRIBUNAL WAS JUSTIFIED IN HOLDING THAT REFUND SHOULD BE GRANTED WITH INTEREST. WE ARE IN FULL AGREEMENT WITH THE ORDER OF SPECIAL BENCH OF TRIBUNAL. WE REPEAT THAT REVENUE SHOULD NOT DRAG THE RESPON DENTS TO UNNECESSARY AVOIDABLE LITIGATION. ITA NO. 7226 + 53 /MUM/2013 DISCRETIONARY FAMILY TRUST S (DEF. CORPUS) 11 3.6 IT WAS FURTHER SUBMITTED THAT IN ONE OF THE CASES INTEREST HAS ALREADY BEEN GRANTED BY THE REVENUE AND SAID GRANT OF INTEREST HAS NOT BEEN REVERSED. REFERENCE IN THIS REGARD WAS MADE TO THE CASE OF M/S.VRUT I DISCRETIONARY FAMILY TRUST, IN RESPECT OF WHICH AO DISALLOWED THE APPLICATION OF THE ASSESSEE FOR GRANT OF INTEREST AND LD. CIT(A) RESTORED THE MATTER BACK TO THE FILE OF AO TO ALLOW THE INTEREST AS PER LAW AND AO VIDE HIS ORDER DATED 11/2/2010 HAS ALLOW ED SUCH INTEREST. REFERENCE IN THIS REGARD WAS MADE TO THE PAPERS FILED IN THE PAPER BOOK AS FOLLOWS: (1) RECTIFICATION APPLICATION OF THE ASSESSEE FROM PGS. 106 TO 108 (2) ORDER PASSED BY LD. CIT(A) DATED 19/9/2008 PAGE 109 TO 110 OF THE PAPER BOOK. (3) ORDER GIVIN G EFFECT BY THE AO DATED 11/2/2010 PAGES 111 OF THE PAPER BOOK. (4) NOTICE OF DEMAND UNDER SECTION 156 GRANTING INTEREST OF RS.40,238/ - PAGE 112 OF THE PAPER BOOK. (5) COMPUTATION OF SUCH INTEREST AT PAGES 113 TO 114 OF THE PAPER BOOK. 3.6 THUS, IT WAS PLEADED BY LD. AR THAT IN VIEW OF ABOVE SUBMISSIONS THE NECESSARY RELIEF SHOULD BE GRANTED TO THE ASSESSEE. IN THIS MANNER GROUND NO.2 AND 3 WERE ARGUED BY LD. AR. 10. THE TRIBUNAL FURTHER REFERRED TO THE SUBMISSIONS OF THE LEARNED D.R. ON THE SAID ISSUE, WHICH ARE INC ORPORATED IN PARA S 5 & 6 OF THE ORDER WHICH READS AS UNDER: - 5. ON THE OTHER HAND, AFTER NARRATING THE FACTS, IT WAS SUBMITTED BY LD. DR THAT AO HAS RIGHTFULLY DENIED INTEREST TO THE ASSESSEE AND REFERRING TO THE ORDER PASSED BY LD. CIT(A) IT WAS SUBMI TTED BY LD. DR THAT IT HAS BEEN CLEARLY HELD BY LD. CIT(A) THAT ACCORDING TO THE FACTS OF THE CASE IT CANNOT BE SAID THAT REFUND IS DUE TO THE ASSESSEE AS A RESULT OF ANY AMOUNT HAVING NOT BEEN PAID IN PURSUANCE OF ANY ORDER OF ASSESSMENT SINCE, IN ORDER UNDER SECTION 143(3) ONLY PROTECTIVE ASSESSMENT WAS MADE BY THE AO, WITH THE UNDISPUTED POSITION OF THE AO BEING THAT INCOME ON WHICH THE TAX WAS PAID BY THE ASSESSEE DID NOT BELONG TO IT AND HENCE, THE ASSESSEE WAS NOT LIABLE TO THE DEMAND ON THE INCO ME OF THE MAIN TRUST. SINCE THE ASSESSEE HAS DISCLOSED THE INCOME AS ITS OWN AND HAD PAID THE TAX ON ITS OWN VOLITION, AND IN ORDER TO PROTECT INTEREST OF REVENUE THE AO ONLY MADE THE PROTECTIVE ASSESSMENT. NO ENFORCEABLE DEMAND WAS CREATED ON THE ASSES SEE. ACCORDING TO WELL SETTLED POSITION OF LAW, IN PROTECTIVE ASSESSMENT DEMAND IS ONLY CONTINGENT DEMAND AND NOT LEGALLY ENFORCEABLE AND THUS, IN REALITY ASSESSEE DID NOT PAY TAX IN PURSUANCE OF ANY ORDER OF ASSESSMENT. LD. DR FURTHER REFERRED TO THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF MODI INDUSTRIES LTD. VS. CIT, 216 ITR 759 REFERRED TO IN PARA - 6.2.3 OF ORDER OF LD. CIT(A) PLEADED THAT THE MEANING OF REGULAR ASSESSMENT IN SECTION 214, WOULD BE THAT A TAX PAYER IS ENTITLED TO CLAIM INT EREST ON THE ITA NO. 7226 + 53 /MUM/2013 DISCRETIONARY FAMILY TRUST S (DEF. CORPUS) 12 EXCESS AMOUNT ADVANCE TAX PAID ONLY WITH REFERENCE TO ASSESSED TAX DETERMINED ON REGULAR ASSESSMENT AND FURTHER NO INTEREST CAN BE CLAIMED UNDER SECTION 214 BEYOND THE DATE OF REGULAR ASSESSMENT. IN THIS MANNER LD. DR PLEADED THAT INTEREST HAS RIG HTLY BEEN DENIED BY LD. CIT(A). 6. SO FAR AS IT RELATES TO GROUND NO.4, IT WAS SUBMITTED BY LD. DR THAT ACCORDING TO DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. GUJARAT FLOURO CHEMICALS, 358 ITR 291 (SC) W.E.F. 1/4/1989 THE INTEREST WHICH CAN BE GRANTED TO THE ASSESSEE ON REFUND AS PER SECTION 244A WOULD BE THE INTEREST PROVIDED IN THAT SECTION AND NO OTHER INTEREST ON SUCH STATUTORY INTEREST CAN BE PROVIDED. THUS, IT WAS PLEADED BY LD. DR THAT THERE IS NO PROVISION ACCORDING TO WHIC H ASSESSEE CAN BE GRANTED INTEREST ON INTEREST. 11. THE TRIBUNAL, ON CONSIDERATION OF THE ISSUES HELD AS UNDER: 7. WE HAVE HEARD BOTH THE PARTIES AND THEIR CONTENTIONS HAVE CAREFULLY BEEN CONSIDERED. IN THE PRESENT CASES ASSESSEES ARE COMMON TO THE AS SESSEES WITH REGARD TO WHOM, EARLIER SPECIAL BENCH HAD DECIDED THE ISSUE THAT ASSESSEE IS ENTITLED TO INTEREST ON THE REFUND. SPECIAL BENCH ORDER WAS ON THE MERITS OF THE ISSUE AS WELL AS ON THE VALIDITY OR OTHERWISE OF SECTION 263 OF THE ACT WHICH WAS I NVOKED BY THE CIT TO DENY THESE ASSESSES BENEFIT OF INTEREST WHICH WAS ALREADY GRANTED BY THE AO. SPECIAL BENCH HAS DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE AND RELEVANT OBSERVATION OF SPECIAL BENCH HAVE ALREADY BEEN REPRODUCED ABOVE. 7.1 THE REVENU E CHALLENGED THE AFOREMENTIONED ORDER OF SPECIAL BENCH BEFORE HONBLE GUJARAT HIGH COURT AND GUJARAT HIGH COURT HAS NOT ONLY UPHELD THE DECISION OF SPECIAL BENCH ON THE ISSUE REGARDING GRANT OF INTEREST BUT HONBLE HIGH COURT HAS ALSO DIRECTED REVENUE A UTHORITIES THAT THEY SHOULD NOT DRAG THE ASSESSEESS TO UNNECESSARY AVOIDABLE LITIGATION. IN SPITE OF SUCH A WARNING GIVEN BY THE COURT TO THE REVENUE, THE DEPARTMENT AGAIN IN THE PRESENT CASES HAS DRAGGED THESE ASSESSEES IN LITIGATION FOR NON - GRANTING O F THE INTEREST. THE RELEVANT OBSERVATIONS OF THEIR LORDSHIPS OF GUJARAT HIGH COURT HAVE ALREADY BEEN REPRODUCED. IT IS MADE CLEAR THAT THE FACTS OF THE PRESENT CASES AND THOSE WHICH WERE DECIDED BY THE SPECIAL BENCH AND HONBLE GUJARAT HIGH COURT ARE P ARI - MATERIA AND THIS FACT WAS NOT DISPUTED BY THE REVENUE. THE AO HAS ADOPTED A VIEW WHICH IS CONTRARY TO THE DECISION OF SPECIAL BENCH AND THE DECISION OF THE HONBLE GUJARAT HIGH COURT AND AS HE HAS AGAIN MADE THE DISALLOWANCE BY REJECTING THE RECT IFICATION APPLICATION OF THE ASSESSEE. THUS, THE CONDUCT OF THE AO IS AGAINST THE DECISION RENDERED BY SPECIAL BENCH. SIMILARLY, LD. CIT(A) HAS DISREGARDED THE SPECIAL BENCH BY SIMPLY HOLDING THAT THE SAME WOULD NOT BE APPLICABLE. ACCORDING TO LD. CIT (A) THE SAID ORDER WAS IN RESPECT OF SECTION 244A. WE DONT FIND ANY JUSTIFICATION IN SUCH DISREGARD SHOWN BY LD. CIT(A). THEREFORE, IN THE FACTS & CIRCUMSTANCES OF THE CASE, SUCH CONDUCT OF THE REVENUE IS NEITHER ACCORDING TO THE ACCEPTED POSITION OF L AW SETTLED BY ITA NO. 7226 + 53 /MUM/2013 DISCRETIONARY FAMILY TRUST S (DEF. CORPUS) 13 THE HIGHER JUDICIAL FORUMS NOR IT IS APPRECIABLE FOR THE REASON THAT HONBLE GUJARAT HIGH COURT HAS ALREADY DIRECTED THE REVENUE NOT TO DRAG THE ASSESSEE IN UNNECESSARY AVOIDABLE LITIGATION. 7.2 THE ISSUE REGARDING GRANT OF INTEREST TO TH E ASSESSEES IS CLEARLY COVERED BY THE DECISION OF THE SPECIAL BENCH AS WELL AS HONBLE GUJARAT HIGH COURT WHICH HAVE NOT BEEN CONTENDED TO BE REVERSED OR MODIFIED. THEREFORE, WE DIRECT THE REVENUE TO GRANT THE INTEREST TO THE ASSESSEE AND GROUND NO.2 & 3 ARE ALLOWED. 7.3 BEFORE PARTING WITH GROUND NOS. 2 & 3 OF THE ASSESSEES APPEAL, WE MAY MENTION HERE THAT IT IS A PROPER CASE WHERE COST CAN BE IMPOSED ON THE DEPARTMENT IN FAVOUR OF THE ASSESSEE FOR NOT FOLLOWING THE DIRECTIONS OF HONBLE GUJARAT HI GH COURT (SUPRA), BUT KEEPING IN VIEW THAT NO SUCH REQUEST WAS MADE BY LD. AR, WE RESTRAIN OURSELVES TO AWARD SUCH COST. 12. THE ISSUE ARISING IN THE PRESENT APPEAL BEFORE US IS IDENTICAL TO THE ISSUE BEFORE THE TRIBUNAL. A PERUSAL OF THE FACTUAL ASPECTS OF THE SAID CASE REFLECTS THAT EVEN THE AMOUNT OF TAXES PAID AND THE DATES OF REFUNDS ISSUED TO THE ASSESSEE ARE SAME, I.E. OUT OF TOTAL TAXES OF ` 51,580/ - THE FIRST ADJUSTMENT WAS MADE VIDE ORDER DATED 29.02.1988 AND THE BALANCE REFUND WAS ISSUED TO THE ASS ESSEE ON 07.12.2000. THE SAID AMOUNT HAD BECOME DUE TO THE ASSESSEE IN VIEW OF THE SUBSTANTIVE ASSESSMENT OF INCOME IN THE HANDS OF THE MAIN TRUST. IN VIEW THEREOF THE ASSESSEE WAS ENTITLED TO INTEREST ON THE SAID REFUNDS UNDER THE PROVISIONS OF SECTION 24 4(1)(A) OF THE ACT. AS REFERRED TO BY THE TRIBUNAL, SIMILAR ISSUE AROSE BEFORE THE SPECIAL BENCH IN THE CASE OF PUNITABE N KARSANBHAI PATEL ORAL SPECIFIC DEFERRED FAMILY TRUST IN ITA NO. 2157/MUM/2003 & OTHERS, AND VIDE ORDER DATED 07.07.2006 ( COP Y OF WHICH IS PLACED ON PAGES 37 TO 66 OF THE PAPER BOOK) IT WAS HELD THAT THE ASSESSEE WAS ENTITLED TO GET THE REFUND. IN THE FACTS OF THE CASE BEFORE THE SPECIAL BENCH THE AO HAD INITIALLY GRANTED INTEREST UNDER SECTION 244(1)(A) OF THE ACT TO THE ASSESSEE WHICH W AS WITHDRAWN BY THE CIT(A) UNDER SECTION 263 OF THE ACT AND THE TRIBUNAL HELD THAT INTEREST WAS RIGHTLY GRANTED. THE RELEVANT FINDINGS OF THE SPECIAL BENCH HAVE BEEN REPRODUCED BY US IN THE PARAS HEREIN ABOVE. THE SAID ORDER OF THE SPECIAL BENCH WAS UPHELD BY THE HON'BLE GUJARAT HIGH COURT IN IT APPEAL NO. 1514 TO 1 79 7 OF 2006 IN THE CA SE OF PUNITABEN K. PATEL OSDFT AND OTHERS (284 CASES) AND MANJULABEN PRAMODBHAI PATEL AND OTHERS (64 CASES) DATED 26.06.2008 (COPY ITA NO. 7226 + 53 /MUM/2013 DISCRETIONARY FAMILY TRUST S (DEF. CORPUS) 14 PACED AT PAGES 68 TO 100 OF THE PAPER BOOK). THE HON'BLE HIGH COURT HELD THAT THE ASSESSEE WAS ENTITLED TO GRANT OF INTEREST ON REFUNDS AS HELD BY THE SPECIAL BENCH OF THE TRIBUNAL. THE SAID ORDER OF THE HON'BLE GUJARAT HIGH COURT HAS NOT BEEN REVERSED BY THE HIGHER FORUM AND NOTHING TO THAT EXTENT WAS POINTED BY ANY OF THE AUTHORISED REPRESENTATIVES. FURTHER, IN THE CASE OF M/S. VAIBHAVI DISCRETIONARY FAMILY TRUST THE MATTER WAS RESTORED BY THE CIT(A) TO THE FILE OF THE AO TO ALLOW INTEREST AS PER LAW AND THE AO, VIDE ORDER DATED 11.02.2010, HAS ALLOWED THE SAID INTEREST. THE ASSESSEE IN THE PRESENT CASE HAD MOVED AN APPLICATION UNDER SECTION 154 OF THE ACT FOR GRANTING OF INTEREST ON REFUNDS DUE TO THE ASSESSEE UNDER THE PROVISIONS OF SECTION 244A OF THE A CT. IN VIEW OF THE RATIO LAID DOWN BY THE SPECIAL BENCH OF THE TRIBUNAL AND ALSO HON'BLE GUJARAT HIGH COURT IN THE HANDS OF THE OTHER BENEFICIARIES AND ALSO THE ORDER OF THE TRIBUNAL IN THE CASE OF M/S. VAIBHAVI DISCRETIONARY FAMILY TRUST (SUPRA) WE HOLD T HAT THE ISSUE OF GRANTING OF INTEREST ON REFUNDS DUE TO THE ASSESSEE IS SQUARELY COVERED AND CONSEQUENTLY WE DIRECT THE AO TO GRANT THE SAID INTEREST TO THE ASSESSEE. IT MAY BE CLARIFIED AT THIS JUNCTURE THAT THE EARLIER BUNCH OF APPEALS DECIDED BY THE MUM BAI BENCHES OF THE TRIBUNAL IN M/S. VAIBHAVI DISCRETIONARY FAMILY TRUST AND OTHERS WAS IN RESPECT OF THE BENEFICIARIES LISTED IN SCHEDULE - I WHEREAS THE PRESENT BENCH OF APPEALS RELATE TO BENEFICIARIES LISTED IN SCHEDULE - II ON ACCOUNT OF DEFERRED CORPUS WHE RE THE RIGHT TO RECEIVE THE INCOME COMES AFTER 18 YEARS. FOLLOWING THE PARITY OF REASONING OF THE ORDERS OF THE DIFFERENT BENCHES OF THE TRIBUNAL AND ALSO FOLLOWING THE DIRECTION OF THE HON'BLE GUJARAT HIGH COURT (SUPRA) WE ALLOW THE GROUNDS OF APPEAL RAIS ED BY THE ASSESSEE VIS - A - VIS GRANT OF INTEREST ON REFUNDS DUE UNDER SECTION 244(1)(A) OF THE ACT. HOWEVER, THE ASSESSEE IS NOT ENTITLED TO INTEREST ON INTEREST IN VIEW OF THE RATIO LAID DOWN BY THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. GUJARAT FLUOR O CHEMICALS 358 ITR 291 (SC). THUS THE GROUNDS OF APPEAL NO. 1 TO 3 RAISED BY THE ASSESSEE ARE ALLOWED AND GROUND OF APPEAL NO. 4 RAISED BY THE ASSESSEE IS DISMISSED. 13. THE FACTS AND ISSUE IN THE BALANCE APPEALS ARE IDENTICAL TO THE FACT AND ISSUES RAISED IN ITA NO. 7226/MUM/2013 AND OUR DECISION IN ITA NO. ITA NO. 7226 + 53 /MUM/2013 DISCRETIONARY FAMILY TRUST S (DEF. CORPUS) 15 7226MUM/2013 SHALL APPLY MUTATIS MUTANTS TO THE LIST OF APPEALS FILED BEFORE US. 14. IN THE RESULT, THE APPEALS FILED BY THE ASSESSEES ARE PARTLY ALLOWED. ORDER PRON OUNCED IN THE OPEN COURT ON 5 TH AUGUST, 2015. 05.08.2015 SD/ - SD / - ( N.K. BILLAIYA ) ( SUSHMA CHOWLA ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI ; DATED : 5 TH AUGUST, 2015 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 23 4. / CIT - 12 5. , , / DR, F BENCH, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER //TRUE COPY// /ASSTT. REGISTRAR) , /ITAT, MUMBAI N.P.
