IDBI BANK LTD., MUMBAI V. DY CIT (LTU), MUMBAI

ITA 777/MUM/2020

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 3327 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-09-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2003-2004
• Appeal Filed On: 30-01-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Rectification of order
• Section: 244A; 72; 22; 154; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES C , MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO. 835 /MUM/2020 ASSESSMENT Y EAR: 2003 - 04 ASSISTANT COMMISSIONER OF INCOME TAX (LTU - 1), 29 TH FLOOR, CENTER - 1, WORLD TRADE CENTRE, CUFFEE PARADE, MUMBAI - 400005 PAN: AABC18842G VS. M/S IDBI BANK LIMITED, 6 TH FLOOR, IDBI TOWER, COLABA OFFICE, CUFFE PARADE, MUMBAI - 400005 (APPELLANT) (RESPONDENT) ITA NO. 777/MUM/2020 ASS ESSMENT Y EAR: 2003 - 04 IDBI BANK LTD., 22 ND FLOOR, TAXATION CELL, IDBI TOWER, WTC COMPLEX, CUFFE PARADE, MUMBAI - 400005 PAN: AAACI1603C VS. THE DCIT/ACIT LARGE TAX PAYERS UNIT, 29 TH FLOOR, CENTRE - 1, WTC COMPLEX, CUFFE PARADE, MUMBAI - 400005 (APPELL ANT) (RESPONDENT) REVENUE BY : MS. SHREEKALA PARDESHI (DR) ASSESSEE BY : SHRI C NARESH (A R) DATE OF HEARING : 18 /08 /202 1 DATE OF PRONOUNCEMENT: 28 / 09 /202 1 O R D E R P ER SAKTIJIT DEY , JM CAPTIONED CROSS APPEALS ARISE OUT OF ORDER DATED 26.11.2019 OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 1, MUMBAI FOR THE ASSESSMENT YEAR 2003 - 04. 2 ITA NO S . 777 & 835 / MUM /2020 ASSESSMENT YEAR: 2003 - 04 2. BRIEFLY THE FACTS ARE, THE ASSESSEE, A RESIDENT COMPANY, IS ENGAGED IN THE BUSIN ESS OF BANKING. FOR THE ASSESSMENT YEAR UNDER DISPUTE, ASSESSEE FILED RETURN OF INCOME DECLARING TOTAL INCOME OF RS. 114,18,18,570/ - . HOWEVER, WHILE COMPLETING THE ASSESSMENT, THE ASSESSING OFFICER (AO) MADE VARIOUS ADDITIONS/DISALLOWANCE S WHICH ENHANCED I NCOME TO RS. 139,95,84,750/ - . AGAINST THE ASSESSMENT ORDER SO PASSED, ASSESSEE FILED APPEAL BEFORE THE LEARNED COMMISSION ER (APPEALS). WHILE DECIDING ASSESSEES APPEAL, LEARNED COMMISSIONER (APPEALS) GRANTED PARTIAL RELIEF TO THE ASSESSEE. THE RELIEF GRANT ED BY LEARNED COMMISSIONER (APPEALS) RESULTED IN REFUND DUE TO THE ASSESSEE. AFTER GIVING EFFECT TO THE ORDER OF LEARNED COMMISSIONER (APPEALS), THE AO VIDE ORDER DATED 03.04.2013, GRANTED REFUND AMOUNT ING TO RS. 16,45,25,005 INCLUDING INTEREST UNDER SECTIO N 244A OF THE ACT. WHILE COMPUTING THE REFUND AS AFORESAID, THE AO ADJUSTED THE REFUND GRANTED EARLIER AMOUNTING TO RS. 1,95,24,797/ - AGAINST THE INTEREST COMPONENT. SUBSEQUE NTLY, THE AO ISSUED A NOTICE UNDER SECTION 154 OF THE ACT FOR RECTIFYING THE ORDER DATED 03.04.2013 GIVING EFFECT TO THE ORDER OF LEARNED COMMISSIONER (APPEALS) ON THE GROUND THAT EXCE SS REFUND OF RS. 80,95,764/ - WAS GRANTED TO THE ASSESSEE. THE AO WHILE COMING TO THE AFORESAID DECISION WAS OF THE VIEW THAT THE REFUND AMOUNT OF RS. 1,95, 24,797/ - SHOULD HAVE BEEN ADJUSTED AGAINST THE TAX COMPONENT AND NOT INTEREST COMPONENT COMPUTED UNDER SECTION 244A OF THE ACT. THOUGH, THE ASSESSEE OBJECTED TO THE INITIATION OF PROCEEDING UNDER SECTION 154 OF THE ACT, H OWEVER, REJECTIN G THE OBJECTION OF THE ASSESSEE THE AO PASSED AN ORDER UNDER SECTION 154 OF THE ACT HOLDING THAT THE ASSESSEE HAS BEEN GRANTED EXCESS INTEREST UNDER SECTION 2 44A OF THE ACT AMOUNTING TO RS. 80 ,95,764/ - . 3 ITA NO S . 777 & 835 / MUM /2020 ASSESSMENT YEAR: 2003 - 04 ACCORDINGLY, HE RAISED A DEMAND NOTICE FOR RECOVERY OF THE SAID AMOU NT. A GAINST THE ORDER PASSED UNDER SECTION 154 OF THE ACT , THE ASSESSEE PREFERRED AN APPEAL BEFORE LEARNED COMMISSIONER (APPEALS) . A FTER CONSIDERING TH E SUBMISSIONS OF THE ASSESSEE I N THE CONTEXT OF FACTS AND MATERIALS ON RECORD AND JUDICIA L PRECEDENTS CITED BE FORE HIM, L EARNED COMMISSIONER (APPEALS) HELD AS UNDER: - 6.3 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE, ORAL CONTENTIONS AND WRITTEN SUBMISSIONS OF THE ASSESSEES DISCUSSION OF THE AO IN THE RECTIFICATION ORDER U/S 154 OF THE ACT AND MATERIAL AVA ILABLE ON RECORD. VIDE GROUND NO.L THE APPELLANT HAS CONTESTED THE ASSUMPTION OF JURISDICTION BY THE AO U/S 154 OF THE ACT AS THE APPELLANT CONTENDS THAT THE ISSUE INVOLVED IS HIGHLY LEGAL AND DEBATABLE AND WHICH CAN BE CONCLUDED ONLY BY A LONG DRAWN PROCE SS OF REASONING ON VARIOUS ISSUES HOWEVER, IN RESPECT OF SUCH SUBMISSION AND CONTENTION OF THE ASSESSEE IT IS SLATED THAT THE SAME BECOMES ACADEMIC IN NATURE, IN VIEW OF THE DISPOSAL OF THE ISSUE RAISED BY THE ASSESSEE IN ITS GROUND NO. 2. THE ASSESSEE IN ITS GROUND NO,2 HAS RAISED AN ISSUE REGARDING LESS GRANT OF INTEREST U/S 244 OF THE ACT AND IT IS THE SUBMISSION OF THE ASSESSEE THAT SUCH ACTION ON T HE PART OF THE AO IS NOT IN ACCORDANCE WITH THE PREVAILING JURISPRUDENCE OF THE ISSUE AS ALSO WITH T HE DE CIS ION OF THE HON'BLE ITAT IN THE CASE OF BANK OF BARODA IN ITA NO. 1646 & 2545/MUM/2017. AS THE ASSESSEE CONTENDS THAT THE ISSUE IS COVERED BY THE D ECISION OF T HE HON'BLE JURISDICTIONAL ITAT IN THE CASE OF BANK OF BARODA (SUPRA), RESPECTFULLY FOLLOWING TH E SAME, THE AO IS DIRECTED TO EXAMINE THE COMPUTATION OF THE REFUND INCLUDING INTEREST' U/S 244A OF THE ACT IN ACCORDANCE WITH THE DIRECTIONS GIVEN BY THE HON BLE JURISDICTIONAL TRIBUNAL IN THE CASE OF BANK OF BARODA IN I TA NO. 1646 & 2545/MUM/2017 DATED 2 0. 12.2018. SUBJECT TO SUCH EXAMINATION AND COMPUTATION OF REFUND INCLUDING INTEREST U/S 244 OF THE ACT IN ACCORDANCE WITH THE DECISION OF HON'BLE MUMBAI ITAT IN THE AFORESAID CASE. GROUND NO, 2 O F APPEAL IS DISPOSED OFF AND FOR STATISTICAL PURPOSES, IT IS TREATED AS PARTLY ALLOWED. GROUND N O .1 IS DISPOSED OFF BEING ACADEMIC IN NATURE, HOWEVER. FOR STATISTICAL PURPOSES IT IS TREATED AS DISMISSED. 4 ITA NO S . 777 & 835 / MUM /2020 ASSESSMENT YEAR: 2003 - 04 3. SHRI C. NARESH, LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE SUBMITTED , TH E VERY INITIATION OF PROCEEDIN G UNDER SECTION 154 OF THE ACT IS INVALID AS THE ISSUE ON WHICH THE AO INITIATED THE PROCEEDING IS A PURELY LEGAL AND HIGHLY DEBATABLE ISSUE. HE SUBMITTED, THE ISSUE ON WHICH THE AO INTENDED TO RECTIFY THE ORDER PASSED EARLIER DOES NOT FALL WITHIN THE AMBI T OF MISTAKE APPARENT ON THE FACE OF RECORD. HE SUBMITTED, THERE ARE NUMBER OF JUDICIAL PRECEDENTS HOLDING THAT REFUND AMOUNT HAS TO BE FIRST ADJUSTED AGAINST THE INTEREST COMPONENT COMPUTED UNDER SECTION 244 A OF THE ACT AND ONLY THEREAFTER IT CAN BE ADJUS TED AGAINST THE TAX AMOUNT. IN THIS CONTEXT, HE DREW OUR ATTENTION TO THE FOLLOWING DECISIONS: - 1. INDIA TRADE PROMOTION ORGANIZATION VS. CIT (2014) 361 ITR 646 (DELHI) 2. UNION BANK OF INDIA VS. ACIT (2016) 72 TAXMAN.COM 348. 3. BANK OF BARODA VS. PCIT, ITA NO. 1 646/MUM/2017 DATED 20.12.2018 . 4. THUS, HE SUBMITTED , SINCE MORE THAN ONE VIEW IS POSSIBLE ON THE ISSUE , IT IS NOT A RECTIFIABLE MISTAKE UNDER SECTION 154 OF THE ACT. HE SUBMITTED, LEARNED COMMISSIONER (APPEALS) HAS ERRED IN LAW IN HOLDING THAT GROUND RA ISED BY THE ASSESSEE CHALLENGING THE VALIDITY OF THE ORDER PASSED UNDER SECTION 154 OF THE ACT I S ACADEMIC IN NATURE. THUS, HE SUBMITTED, THE O RDER PASSED UNDER SECTION 154 OF THE ACT SHOULD BE HELD AS INVALID. 5 . THE LEARNED DEPARTMENTAL REPRESENTATIVE S UBMITTED, SINCE THE COMMISSIONER (APPEALS) HAS NOT DECIDED THE LEGAL GROUND RAISED BY THE ASSESSEE , THE MATTER MAY BE RESTORED BACK TO HIM . WITHO UT PREJUDICE, SHE SUBMITTED, LEARNED COMMISSIONER (APPEALS) WAS WRONG IN ALLOWING ASSESSEES CLAIM AS IT AMOUNT S TO GRANTING INTEREST ON INTEREST, WHICH IS IMPERMISSIBLE. IN 5 ITA NO S . 777 & 835 / MUM /2020 ASSESSMENT YEAR: 2003 - 04 SUPP ORT OF SUCH CONTENTION, SHE RELIED UPON THE DECISION OF HONBLE SUPREME COURT IN CASE OF CIT VS GUJARAT FLURO CHEMICALS, SLP (C) NO. 11406 OF 2008, JUDGMENT DATED 18.09.2013. THUS, SHE SUBM ITTED , THE AO WAS JUSTIFI ED IN INITIATING PROCEEDING UNDER SECTION 154 OF THE ACT TO RECOVER THE EXCESS INTEREST PAID TO THE ASSESSEE. 6 . WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE MATERIALS ON RECORD. AT THE OUTSET, WE INTEND TO EXAMINE THE LEG AL GROUND RAISED BY THE ASSESSEE CHALLENGING THE VALIDITY OF THE ORDER PASSED UNDER SECTION 154 OF THE ACT. ADMITTEDLY, IN PURSUANCE TO ORDER PASSED BY THE LEARNED COMMISSIONER (APPEALS), THE AO RECOMPUTED INCOME OF T HE ASSESSEE RESULTING IN REFUND OF CERT AIN AMOUNT. WHILE COMPUTING THE REFUND, THE AO ADJUSTED A PART OF THE REFUND GRANTED EARLIER AGAINST THE INTEREST COMPONENT COMPUTED UNDER SECTION 244A OF THE ACT. SUBSEQUENTLY, THE AO CHANGED HIS VIEW WHILE HOLDING THAT NO PART OF THE REFUND GRANTED EARLI ER CAN BE ADJUSTED AGAINST THE INTEREST COMPONENT COMPUTED UNDER SECTION 244A OF THE ACT. ACCORDINGLY, HE PASSED THE ORDER UNDER SECTION 154 OF THE ACT WITHDRAWING THE ALLEGED EXCESS INTERES T PAID TO THE ASSESSEE UNDER SECTION 244A OF THE ACT. THE ISSUE AR ISING FOR CONSIDERATION IS , WHETHER THE ALLEGED MISTAKE FOR WHI CH THE AO INITIATED PROCEEDING UNDER SECTION 154 OF THE ACT COMES WITHIN THE AMBIT OF MISTAKE APPARENT ON THE FACE OF RECORD AS CONTEM PLATED UNDER THE SAID PROVISION . 7 . UNDISPUTEDLY, THERE ARE JUDICIAL PRECEDENT S, AS CITED BY LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE , HOLDING THAT REFUND AMOUNT , IF ANY, FIRST HAS TO BE ADJUSTED AGAINST THE INTEREST COMPONENT FORMING PART OF THE REFUND COMPUTED EARLIER BUT NOT GRANTED AND THE BALANCE AMOUNT HAS TO BE 6 ITA NO S . 777 & 835 / MUM /2020 ASSESSMENT YEAR: 2003 - 04 ADJUSTED AGAINST THE TAX COMPONENT. EVEN, ASSUMING THAT THERE ARE DECISIONS TO THE CONTRARY, AS SUBMITTED BY LEARNED DEPA RTMENTAL REPRESENTATIVE, THIS CAN ONLY SUGGEST THAT THERE IS MORE THAN ONE VIEW POSSIBLE ON THE IS SUE WHETHER THE REF UND GRANTED EARLIER TO THE ASSESSEE FIRST HAS TO BE ADJUST ED AGAINST INTEREST COMPUTED UNDER SECTION 244A OF THE ACT OR O THERWISE. IN OTHER WORDS, IT IS HIGHLY DEBATABLE ISSUE. THUS, KEEPING IN VIEW THE AFORE SAID FACTUAL AND LEGAL POSITION, I T HAS TO BE HE LD THAT THE ISSUE ON WHICH THE AO INITIATED PROCE EDING UNDER SECTION 154 OF THE ACT CANNOT BE CONSIDERED TO BE IN THE NATURE OF MISTAKE APPARENT ON THE FACE OF RECORD AS ENVISAGED UNDER SECTION 154 OF THE ACT. THEREFORE, THE AO HAS ERRONEOU SLY ASSUMED JURI SDICTION UNDER SECTION 154 OF THE ACT TO RECTIFY THE MISTAKE. IN OUR VIEW, THERE IS NO RECTIFIABLE MISTAKE AS CONTEMPLATE D UNDER SECTION 154 OF THE ACT WHICH COULD HAVE BEEN RECTIFIED. IN VIEW OF THE AFORESA ID, WE HOLD THE ORDER PASSED UNDER SECTION 154 OF THE ACT TO BE INVALID. 8 . IN VIEW OF OUR AFORESAID DECISION, THERE IS NO NEED TO DWELL UPON THE M ERITS OF THE ISSUE RAISED IN REVENUE S APPEAL. ACCORDINGLY, ASSESSEES APPEAL IS ALLOWED AND REVENUE S APPEAL IS DISMISSED. ORDER PRONOUN CED IN THE OPEN COURT ON 28 TH SEPTEMBER , 2021 . SD/ - SD/ - ( S. RIFAUR RAHMAN ) A CCOUNTANT MEMBER (SAKTIJIT DEY) JUDICIAL MEMBER MUMBAI ; DATED: 28 / 09 /202 1 ALINDRA, PS 7 ITA NO S . 777 & 835 / MUM /2020 ASSESSMENT YEAR: 2003 - 04 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI