M/s Satluj Motors, Mandi V. ITO, Sunder Nagar

ITA 779/CHANDI/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 64017 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-11-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 19-11-2012
• Assessment Year: 2004-2005
• Appeal Filed On: 30-07-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: N K SAINI
• Section: 153A; 234B; 147; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B, CHANDIGARH BEFORE SHRI T.R. SOOD, A.M AND MS. SUSHMA CHOWLA, J M ITA NO. 779/CHD/2012 ASSESSMENT YEAR : 2004-05 M/S SATLUJ MOTORS V I.T.O. SUNDERNAGAR LUNA PANI MANDI ABBFS 1352 H (APPELLANT) (RESPONDENT) APPELLANT BY WRITTEN SUBMISSIONS RESPONDENT BY SHRI N.K. SAINI DATE OF HEARING 19.11.2012 DATE OF PRONOUNCEMENT 22.11.2012 O R D E R PER T.R.SOOD, A.M THIS APPEAL IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A), SHIMLA, DATED 25.5.2012. 2. IN THIS APPEAL THE ASSESSEE HAS RAISED FOLLOWING GROUND: THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, T HE LD. CIT(A) IS NOT JUSTIFIED IN CONFIRMING THE CHARGING OF INTEREST U/S 234B AMOUNTING TO RS. 5,44,940/- (RS. 3,08,691 + RS. 1,36,257). 3. THE ASSESSEE FILED WRITTEN SUBMISSIONS AND REQUE STED VIDE LETTER DATED 27.9.2012 AND 14.11.2012 THAT THE MATTER SHOULD BE DECIDED ON THE BASIS OF WRITTEN SUBMISSI ONS. 4. AFTER CONSIDERING THE WRITTEN SUBMISSIONS AND TH E SUBMISSIONS OF LD. DR FOR THE REVENUE WE FIND THAT ORIGINALLY RETURN WAS PROCESSED U/S 143(1) IN WHICH NO INTERES T WAS CHARGED BECAUSE RETURNED LOSS WAS ACCEPTED. LATER ON THE ASSESSMENT WAS REOPENED U/S 147 AND ASSESSMENT WAS FRAMED U/S 143(3)/147 ON 31.12.2009 IN WHICH INCOME WAS AS SESSED AT RS. 17,31,658/-. INTEREST U/S 234A, 234B AND 234D WAS ALSO CHARGED AT RS. 71,236, RS. 3,08,691 AND RS. 7,607 2 RESPECTIVELY. LATER ON IT WAS NOTICED THAT THE INT EREST HAS BEEN SHORT CHARGED AND ACCORDINGLY NOTICE U/S 154/155 WA S ISSUED TO SHOW CAUSE WHY INTEREST SHALL NOT CHARGED ON ASSESS ED TAX. THE ASSESSEE FILED WRITTEN SUBMISSIONS BEFORE THE A O VIDE LETTER DATED 19.1.2011 STATING THEREIN THAT ASSESSM ENT IN THIS CASE WAS COMPLETED U/S 143(3)/147 VIDE ORDER DATED 31.12.2009 IN WHICH INTEREST U/S 234D WAS CHARGED A T RS. 7,607 ON THE REFUND ISSUED AT THE TIME OF PROCESSIN G OF RETURN U/S 143(1). HOWEVER, NO CREDIT FOR THE REFUND OF R S. 28,724/- WAS GIVEN WHILE CALCULATING THE TAX AND INTEREST U/ S 234B/234C. HOWEVER, THE AO HELD THAT CREDIT FOR TDS HAD BEEN D ULY GIVEN AND REVISED THE INTEREST AS UNDER: ADD INTEREST U/S 234A FOR 13 MONTHS RS. 77173.00 (593636 (621231 27595 TDS) X 13% ADD INTEREST U/S 234B FOR 69 MONTHS RS. 409609.00 (593636 (621231 27595 TDS) X 69% ADD INTEREST U/S 234D RS. 7754.00 5. AGGRIEVED BY THE ABOVE ORDER, THE ASSESSEE FILED APPEAL BEFORE THE LD. CIT(A) AND SUBMITTED WRITTEN SUBMISS IONS THROUGH WHICH IT WAS MAINLY CONTENDED THAT INTEREST U/S 234B(3) OF THE ACT WAS NOT AT ALL CHARGEABLE INCASE WHERE NO SUCH INTEREST WAS CHARGED U/S 143(1). RELIANCE WAS PLACED ON THE DECISION OF CHANDIGARH BENCHES OF THE TRIBUNAL IN CASE OF KANGRA BAJRI CO. V ACIT, 20 IT TAXATION REPORT 368. HOWEVER, THE LD. CIT(A) DID NOT ACCEPT THE SAME. HE OBSERVE D THAT EXPLANATION 2 OF SECTION 234B WAS CLEAR THAT ONCE A N ASSESSMENT WAS MADE U/S 147 FOR THE FIRST TIME, THE SAME WAS TO BE REGARDED AS REGULAR ASSESSMENT. IN THIS REGA RD HE ALSO RELIED ON THE DECISION OF HON'BLE PUNJAB & HARYANA HIGH COURT IN CASE OF CIT V. BANSAL ABHUSHAN BHANDAR, 213 CTR 97. IN VIEW OF THIS OBSERVATION THE LEVY OF INTEREST U/S 2 34B WAS CONFIRMED. 6. IN THE WRITTEN SUBMISSIONS FILLED BEFORE US SIMI LAR ARGUMENTS HAVE BEEN REITERATED. IT HAS BEEN EMPHAS IZED IN THE WRITTEN SUBMISSIONS THAT THE PROVISIONS OF SECT ION 234B ARE 3 NOT APPLICABLE IF AT THE TIME OF ASSESSMENT U/S 143 (1), NO INTEREST WAS CHARGED. RELIANCE HAS BEEN PLACED ON T HE DECISION OF KANGRA BAJRI CO. (SUPRA). 7. ON THE OTHER HAND, THE LD. DR FOR THE REVENUE SU BMITTED THAT AS FAR AS THE CREDIT FOR REFUND IS CONCERNED, THE LD. CIT(A) HAS ALREADY DIRECTED THE AO VIDE PARA 4.4 (LAST FOU R LINES) THAT WHILE CALCULATING THE INTEREST CREDIT FOR REFUND OF TDS WHICH WAS REFUNDED EARLIER AMOUNTING TO RS. 28,724/- SHO ULD BE ALLOWED. AS FAR AS CHARGING OF INTEREST IS CONCERN ED, IT HAS BEEN HELD BY THE HON'BLE PUNJAB & HARYANA HIGH COUR T IN CASE OF CIT V. NAHAR SPINNING MILLS, 339 ITR 557 THAT EV EN IF NOT INTEREST IS CHARGED BY PROCESSING THE RETURN U/S 14 3(1)(A) THE INTEREST HAS TO BE CHARGED ONCE THE ASSESSMENT IS C OMPLETED FOR THE FIRST TIME U/S 147 BECAUSE THE SAME WOULD B E CONSTRUED AS REGULAR ASSESSMENT IN VIEW OF EXPLANAT ION 2 TO SECTION 234B OF THE ACT. 8. AFTER CONSIDERING THE RIVAL SUBMISSIONS WE FIND THAT HON'BLE PUNJAB & HARYANA HIGH COURT IN CASE OF CIT V. BANSAL ABHUSHAN BHANDAR (SUPRA) HAS CLEARLY HELD THAT WHEN THE ASSESSMENT WAS COMPLETED FOR THE FIRST TIME U/S 147 THAT SHOULD BE CONSTRUED AS REGULAR ASSESSMENT AND INTER EST CAN BE CHARGED U/S 215 AND 217 OF THE ACT. THIS WAS BASE D ON SUB- SECTION (2) OF SECTION 215 WHICH WAS INSERTED BY TA XATION LAWS (AMENDMENT ACT, 1984) W.E.F. 1.4.1985. THIS SUB-SE CTION READS AS UNDER: WHERE IN RELATION TO AN ASSESSMENT YEAR, AN ASSESS MENT IS MADE FOR THE FIRST TIME U/S 147, THE ASSESSMENT SO MADE SHALL BE REGARDED AS A REGULAR ASSESSMENT FOR THE PURPOSE OF THIS SECTION AND SECTIONS 216, 217 AND 2 73. 9 THE ABOVE POSITION HAS BEEN RENDERED FOR CHARGING INTEREST U/S 215 TO 217 OF THE ACT. IT HAS TO BE N OTED THAT PROVISIONS OF SECTION 234B IS IDENTICAL BECAUSE EXP LANATION 2 PROVIDES SIMILAR AS UNDER: WHERE, IN RELATION TO AN ASSESSMENT YEAR, AN ASSES SMENT IS MADE FOR THE FIRST TIME U/S 147 {OR SECTION 153A }, THE ASSESSMENT SO MADE SHALL BE REGARDED AS A REGULAR ASSESSMENT FOR THE PURPOSE OF THIS SECTION. 4 THUS IT IS CLEAR THAT ONCE ORIGINAL RETURN IS PROCE SSED U/S 143(1) AND REGULAR ASSESSMENT IS FRAMED FOR THE FIR ST TIME U/S 147/143(3), THE INTEREST U/S 234B IS CHARGEABLE. T HIS POSITION HAS BEEN FURTHER AFFIRMED BY THE HON'BLE PUNJAB & H ARYANA HIGH COURT IN CASE OF CIT V. NAHAR SPINNING MILLS L TD. THEREFORE, FOLLOWING THE TWO DECISIONS OF HON'BLE J URISDICTIONAL HIGH COURT, WE FIND NOTHING WRONG WITH THE ORDER OF LD. CIT(A) AND CONFIRM THE SAME. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMIS SED. ORDER PRONOUNCED ON 22.11.2012 SD/- SD/- (SUSHMA CHOWLA) (T.R. SOOD) JUDICIAL MEMBER ACCOUNTANT MEM BER DATED : 22.11. 2012 SURESH COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT/THE C IT(A)/THE DR 5