Cheran Textile Wind Farm Pvt Ltd, Tirupur V. ITO, Ward 1(2), Tirupur

ITA 815/CHNY/2019

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 6527 (ITAT-CHENNAI)
• Duration Of Justice: 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 27-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: M MURUGABOOPATHY
• Keywords: Principle of natural justice; Set aside; Capital Gains
• Section: 234B

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , A BENCH, CHENNAI [ , , BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER ./ I.T.A.NO.815/CHNY/2019 ( [ [ / ASSESSMENT YEAR: 2014-15) M/S. CHERAN TEXTILE WIND FARM PVT. LTD., 12 (OLD NO.25), JOTHI THEATRE ROAD, TIRUPUR 641 601. VS THE INCOME TAX OFFICER, WARD 1(2), TIRUPUR PAN: AAECC 9092R ( /APPELLANT) ( /RESPONDENT) & ./ I.T.A.NO.816/CHNY/2019 ( [ [ / ASSESSMENT YEAR: 2014-15) M/S. EVEREADY TEXTILE WIND FARM PVT. LTD., 16 (OLD NO.23), JOTHI THEATRE ROAD, TIRUPUR 641 601. VS THE INCOME TAX OFFICER, WARD 1(2), TIRUPUR PAN: AADCE 1012A ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : SHRI M. MURUGABOOPATHY, ADVOCATE / RESPONDENT BY : SHRI AR.V. SREENIVASAN, JCIT /DATE OF HEARING : 05.09.2019 /DATE OF PRONOUNCEMENT : 31.10.2019 / O R D E R PER S.JAYARAMAN, AM: THE ABOVE ASSESSEES FILED THESE APPEALS AGAINST THE ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEALS)-3, COIMBATORE BOTH DATED 2 ITA NO.815 & 816/CHNY/2019 13.02.2019 IN APPEAL NO.41/2017-18 & 22/2017-18 FOR THE ASSESSMENT YEARS 2014-15. SINCE COMMON ISSUES ARE INVOLVED IN THESE APPEALS, THEY ARE HEARD TOGETHER AND BEING DISPOSED TOGETHER, FOR CONVENIENCE SAKE. 2. THE CPC WHILE PROCESSING THE RETURN OF INCOME FILED U/S.143(1) LEVIED INTEREST U/S.234A & B, WHICH WAS HIGHER THAN WHAT WAS COMPUTED BY THE ASSESSEE. AGGRIEVED AGAINST THE RESPECTIVE ORDERS, THE ASSESSEES FILED APPEALS BEFORE THE CIT(A) AND THE LD.CIT(A) HELD THAT THE ASSESSEES CASE LAW IS NOT APPLICABLE BECAUSE THESE ASSESSEES PAID TAX AFTER THE DUE DATE BUT BEFORE FILING THE RETURN OF INCOME. SECTION 234A(1) CLEARLY PROVIDES, WHAT ARE THE TAX PAYMENTS WHICH CAN BE REDUCED FROM THE TOTAL INCOME DETERMINED. IT DOES NOT INCLUDE THE TAX PAID AFTER DUE DATE. HENCE, HE HELD THAT THE AO / CPC HAS CORRECTLY LEVIED THE TAX U/S.234A. SIMILARLY, SECTION 234B ALSO DOES NOT PROVIDE FOR REDUCING THE TAX PAID BETWEEN THE DUE DATE OF FILING AND THE DATE OF FILING. THEREFORE, HE HELD THAT THE AO / CPC HAS CORRECTLY LEVIED INTEREST U/S.234B. AGGRIEVED AGAINST THOSE ORDERS, THE RESPECTIVE ASSESSEE FILED THESE APPEALS WITH THE FOLLOWING COMMON GROUNDS:- 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX {APPEALS} IS OPPOSED TO LAW AND THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE APPELLANT SUBMITS THAT THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX {APPEALS} SUFFERS FROM PROCEDURAL INFIRMITY AND IS ALSO INCORRECT ON MERITS AND AGAINST NATURAL JUSTICE. 3 ITA NO.815 & 816/CHNY/2019 3. THE LEARNED COMMISSIONER OF INCOME TAX {APPEALS} HAD NOT CONSIDERED THE TAX PAID U/S 140A AFTER DUE DATE BUT BEFORE FILING THE RETURN OF INCOME. YOUR APPELLANT PRAYS THAT THE RATIO OF THE JUDICIAL DECISIONS CITED IS SQUARELY APPLICABLE TO THE FACTS OF THE CASE UNDER APPEAL. 4. THE LEARNED COMMISSIONER OF INCOME TAX {APPEALS} HAS FAILED TO OBSERVE THE PRINCIPLES OF JUDICIAL PRECEDENCE. 5. THE LEARNED COMMISSIONER OF INCOME TAX {APPEALS} DID NOT APPLY HIS MIND TO THE FACTS OF THE CASE AND PROCEEDED TO PASS AN ORDER IN A MECHANICAL MANNER. 6. IN VIEW OF THE FOREGOING GROUNDS AND SUCH OTHERS THAT MAY BE URGED BEFORE THE INCOME TAX APPELLATE TRIBUNAL AT THE TIME OF HEARING, YOUR APPELLANT PRAYS THAT THE APPEAL MAY BE ALLOWED. 3. THE LD.AR TOOK OUR ATTENTION TO THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. PRANOY ROY, [2009] 179 TAXMAN 53 (SC) AND RELIED ON THE HEAD NOTE WHICH IS EXTRACTED AS UNDER:- SECTION 234A OF THE INCOME-TAX ACT, 1961 - INTEREST, CHARGEABLE AS - ASSESSMENT YEAR 1995-96 - ASSESSEE EARNED SUBSTANTIAL CAPITAL GAINS FOR ASSESSMENT YEAR 1995-96 FOR WHICH INCOME-TAX RETURN WAS DUE TO BE FILED ON 31-10-1995 - RETURN WAS FILED ON 29-9-1996, AFTER A DELAY OF ABOUT 11 MONTHS - HOWEVER, TAXES DUE WERE PAID ON 25-9-1995, I.E., BEFORE DUE DATE OF FILING OF RETURN - THOUGH RETURNED INCOME WAS ACCEPTED ON 29-1- 1998, YET INTEREST WAS CHARGED UNDER PROVISIONS OF SECTION 234A ON GROUND THAT TAX PAID ON 25-9-1995 COULD NOT BE REDUCED FROM TAX DUE ON ASSESSMENT - BEING AGGRIEVED, ASSESSEE FILED WRIT PETITION WHEREIN HIGH COURT HELD THAT INTEREST IS NOT A PENALTY AND THAT INTEREST IS LEVIED BY WAY OF COMPENSATION TO COMPENSATE REVENUE IN ORDER TO AVOID IT FROM BEING DEPRIVED OF PAYMENT OF TAX ON DUE DATE - IT FURTHER HELD THAT INTEREST WOULD BE PAYABLE IN A CASE WHERE TAX HAS NOT BEEN DEPOSITED PRIOR TO DUE DATE OF FILING OF INCOME-TAX RETURN AND, ACCORDINGLY, SET ASIDE INTEREST CHARGED UNDER SECTION 234A - WHETHER SINCE TAX DUE HAD ALREADY BEEN PAID WHICH WAS NOT LESS THAN TAX PAYABLE ON RETURNED INCOME WHICH WAS ACCEPTED, QUESTION OF LEVY OF INTEREST DID NOT ARISE - HELD, YES - WHETHER THEREFORE, FINDING RECORDED BY HIGH COURT AS WELL AS INTERPRETATION OF SECTION 234A WAS TO BE UPHELD - HELD, YES 4 ITA NO.815 & 816/CHNY/2019 PER CONTRA, THE LD.DR SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES. 4. WE HEARD THE RIVAL SUBMISSIONS AND GONE THROUGH THE HONBLE APEX COURTS DECISION CITED SUPRA. SINCE THE TAX DUE HAD ALREADY BEEN PAID WHICH WAS NOT LESS THAN THE TAX PAYABLE ON THE RETURNED INCOME WHICH WAS ACCEPTED, THE QUESTION OF LEVY OF INTEREST DOES NOT ARISE. THEREFORE, WE FIND MERIT IN THE APPEALS OF THE ASSESSEES AND HENCE ALLOW THE APPEALS. 5. IN THE RESULT, BOTH THE ASSESSEES APPEALS ARE ALLOWED. ORDER PRONOUNCED IN THE COURT ON 31 ST OCTOBER, 2019 AT CHENNAI. SD/- SD/- /CHENNAI, /DATED 31 ST OCTOBER , 2019 RSR /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. ( ) /CIT(A) 4. /CIT 5. /DR 6. [ /GF ( ) (GEORGE MATHAN) /JUDICIAL MEMBER ( ) (S. JAYARAMAN) /ACCOUNTANT MEMBER