SGS INDIA P. TLD, MUMBAI V. ADDL CIT CIR 10(3), MUMBAI

ITA 8519/MUM/2010

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 79074 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 6 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-06-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Next Hearing Date: 08-01-2014
• Assessment Year: 1992-1993
• Appeal Filed On: 08-12-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Recovery proceedings
• Section: 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUM BAI , , BEFORE SHRI SANJAY ARORA, AM AND SHRI AMIT SHUKLA, JM ./ I.T.A. NOS. 8519, 8520, 8521 & 8522/MUM/2010 ( / ASSESSMENT YEARS: 1992-93, 1994-95, 1995-96 & 1996- 97) SGS INDIA PRIVATE LIMITED SGS HOUSE, 4B, ADI SHANKARACHARYA MARG, NEXT TO POWAI TELEPHONE EXCHANGE, VIKHROLI (W), MUMBAI-400 083 / VS. ADDL. CIT, CIRCLE 10(3), AAYKAR BHAVAN, MUMBAI-400 020 ' ./# ./PAN/GIR NO. AAACS 5514 Q ( '$ /APPELLANT ) : ( %&'$ / RESPONDENT ) '$ ' ( / APPELLANT BY : SHRI SUNIL M. LAL MS. KEERTHIGA PADMANABHAN %&'$ ' ( / RESPONDENT BY : SHRI PITAMBAR DAS )* + ' , / DATE OF HEARING : 13.05.2014 -./ ' , / DATE OF PRONOUNCEMENT : 13.06.2014 / O R D E R PER BENCH: THIS IS A SET OF FOUR APPEALS BY THE ASSESSEE DIREC TED AGAINST THE SEPARATE ORDERS BY THE COMMISSIONER OF INCOME TAX (APPEALS)-22, MUM BAI (CIT(A) FOR SHORT) OF EVEN DATE, I.E., 29.09.2010, DISMISSING THE ASSESSEES A PPEALS CONTESTING THE ORDERS U/S.154 OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER) (A LL) DATED 27.09.2007 PASSED IN ITS CASE FOR THE ASSESSMENT YEARS (A.YS.) 1992-93, 1994-95, 1995-96 & 1996-97. THE ISSUE ARISING FOR CONSIDERATION IN THE PRESENT CASE BEING COMMON, THE APPEALS WERE TAKEN UP TOGETHER FOR HEARING, AND ARE BEING DISPOSED OF VID E A COMMON, CONSOLIDATED ORDER. 2 ITA NOS. 8519 TO 8522/MUM/2010 (A.YS. 1992-93, 94-95, 95-96 & 96-97) SGS INDIA PRIVATE LIMITED VS. ADDL. CIT 2. THE ONLY ISSUE ARISING IN THIS APPEAL IS THE MAI NTAINABILITY IN LAW OF THE INTEREST LEVIED BY THE REVENUE U/S. 220(2) OF THE ACT ON THE ASSESSEE FOR THE RELEVANT YEARS. THE CONTROVERSY ARISING IN THE PRESENT SET OF APPEALS I S WHETHER INTEREST UNDER SECTION 220(2) SHALL ARISE ON A DEMAND, ORIGINALLY SATISFIED AND, ACCORDINGLY, REFUNDED TO THE ASSESSEE FOLLOWING THE ORDER/S BY AN APPELLATE FORUM, SINCE REVIVED BY AN ORDER/S BY A HIGHER FORUM. AN ANCILLARY QUESTION THAT ARISES IS WHETHER THE ANSWER WOULD UNDERGO ANY CHANGE OR MODIFICATION IF THE ORIGINAL DEMAND WAS NOT SATI SFIED WITHIN THE TIME PRESCRIBED BY LAW, I.E., 30 DAYS OF THE SERVICE OF THE NOTICE OF DEMAND, SO THAT THE ASSESSEE IS DEEMED TO BE IN DEFAULT FOR SOME TIME, THOUGH OF COURSE THE S AID DEMAND STOOD SATISFIED AND THE NOTICE OF DEMAND DISCHARGED IN TIME, RESULTING IN A REFUND TO THE ASSESSEE ON A ACCOUNT OF A FAVORABLE ORDER SUBSEQUENTLY. 3. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATER IAL ON RECORD. 3.1 OUR FIRST OBSERVATION IN THE MATTER IS THAT THE ISSUE ARISING IS NOT APPEALABLE. THE PRESENT APPEAL/S ARISES IN RECTIFICATION PROCEEDING S MOVED UNDER SECTION 154 OF THE ACT. AS SUCH, OUR PURVIEW IN THE PRESENT CASES WOULD BE LIMITED TO DECIDING THE ISSUE ARISING IN TERMS OF THE SETTLED LAW IN-AS-MUCH AS ANY ACTIO N INCONSISTENT THEREWITH IS LIABLE TO BE CONSTRUED AS A MISTAKE RECTIFIABLE UNDER SECTION 154. TOWARD THIS, WE FIND, EVEN AS ARGUED FOR AND ON BEHALF OF THE ASSESSEE BEFORE US, THE MATTER TO BE SETTLED BY THE DECISION BY THE HONBLE APEX COURT IN VIKRANT TYRES LTD VS. ITO [2001] 247 ITR 821 (SC). IT STANDS EXPLAINED THEREIN THAT THE CONDITION PRECEDE NT FOR INVOCATION OF SECTION 220(2) IS THAT THERE SHOULD BE A DEMAND NOTICE (DN) AND, FURT HER, A DEFAULT IN PAYING THE AMOUNT SO DEMANDED. THE PROVISION OF SECTION 3 OF THE TAXATIO N LAWS (CONTINUATION AND VALIDATION OF RECOVERY PROCEEDINGS) ACT, 1964, WHICH DEALS WIT H THE REVIVAL OF THE NOTICE OF DEMAND WHICH IS NOT SATISFIED, WOULD NOT APPLY IN S UCH A CASE. 3.2 TO THE EXTENT, THEREFORE, THE DN STANDS SATISFI ED IN FULL WITHIN THE TIME STIPULATED, THERE IS NO REVIVAL OF DEMAND UPON A SUBSEQUENT RES TORATION BY A HIGHER APPELLATE FORUM OF THE ASSESSMENT IN WHOLE OR IN PART, AND A FRESH NOTICE OF DEMAND WOULD BE REQUIRED TO 3 ITA NOS. 8519 TO 8522/MUM/2010 (A.YS. 1992-93, 94-95, 95-96 & 96-97) SGS INDIA PRIVATE LIMITED VS. ADDL. CIT BE ISSUED TOWARD RECOVERY OF THE DEMAND REVIVING SU BSEQUENTLY. THERE IS ACCORDINGLY NO QUESTION OF LEVY OF INTEREST FROM AN ANTERIOR DATE, I.E., THE DATE IMMEDIATELY FOLLOWING THE DUE DATE OF PAYMENT AS PER THE ORIGINAL DN. IN FACT , TO THIS EXTENT, THERE IS NO SCOPE OF ANY DISPUTE OR FOR TAKING ANY DIFFERENT VIEW OF THE MAT TER, I.E., BY EITHER PARTY. THE BASIS OF THE REVENUES VIEW IN CONTENDING THE NON-APPLICATION OF THE DECISION IN VIKRANT TYRES LTD . (SUPRA) IN THE PRESENT CASES IS THAT: A) THE ORIGINAL DN HAS NOT BEEN DISCHARGED IN FULL; AN D/OR B) THERE HAS BEEN A DELAY IN SATISFACTION OF THE DN (B EYOND THE PRESCRIBED TIME), SO THAT THE ASSESSEE IS IN DEFAULT FOR SOME TIME. IT IS ON ACCOUNT OF AND UNDER SUCH CIRCUMSTANCES TH AT THE REVENUE SEEKS TO CHARGE INTEREST UNDER SECTION 220(2) FROM AN ANTERIOR DATE . WE SHALL, AS AFORE-STATED, ANSWER THE ISSUE/S ARISING ON FIRST PRINCIPLES, IF ONLY FOR TH E REASON THAT THE PROCEEDINGS UNDER REFERENCE ARE RECTIFICATION PROCEEDINGS, PRECLUDING ADMISSION OR DETERMINATION OF DEBATABLE ISSUES. THE BASIS OF THE DECISION IN THE CASE OF VIKRANT TYRES LTD . (SUPRA) IS THAT THE ORIGINAL DN STANDS SINCE DISCHARGED, SO THAT TH ERE IS NO REVIVAL OF DEMAND WITH REFERENCE THERETO WHEN SUBSEQUENTLY A PART OF THE D EMAND, AS ORIGINALLY RAISED, STANDS RESTORED. AS SUCH, WHERE A DN HAS NOT BEEN DISCHARG ED IN FULL, INTEREST FROM AN ANTERIOR DATE SHALL ARISE ONLY TO THE EXTENT THE DEMAND AS F INALLY ARISING IS RELATABLE TO SUCH UNPAID/UN-DISCHARGED DEMAND. SIMILARLY, WHERE THE D EMAND STOOD NOT PAID WITHIN THE TIME PRESCRIBED, THE ASSESSEE IS DEEMED TO BE IN DE FAULT FOR THE PERIOD FOR WHICH THE DEMAND OUTSTANDS BEYOND SUCH TIME. ACCORDINGLY, THE LIABILITY TO INTEREST UNDER SECTION 220(2) ARISES FOR SUCH PERIOD, I.E., FOR WHICH THE DEMAND ACTUALLY OUTSTANDS, WHEN THE WHOLE OR A PART OF THE SAID DEMAND BECOMES DUE FOR THE PAYMENT IN SUBSEQUENT PROCEEDINGS. 3.3 THE FIGURES FOR THE TAX ARISING AND ITS PAYMENT /ADJUSTMENT/S, AS WELL AS THE DATES THEREOF, ARE, AS EMPHASIZED BY THE LD. AR DURING HE ARING, NOT IN DISPUTE. WE THEREFORE 4 ITA NOS. 8519 TO 8522/MUM/2010 (A.YS. 1992-93, 94-95, 95-96 & 96-97) SGS INDIA PRIVATE LIMITED VS. ADDL. CIT DIRECT THE WORKING OF THE INTEREST UNDER SECTION 22 0(2), IF ANY, FOR THE RELEVANT YEARS IN TERMS OF THE FOREGOING. WE DECIDE ACCORDINGLY. 4. IN THE RESULT, THE ASSESSEES APPEALS ARE DISPOS ED OF IN THE AFORESAID TERMS. ORDER PRONOUNCED IN THE OPEN COURT ON JUNE 13, 2014 SD/- SD/- (AMIT SHUKLA) (SANJAY ARORA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER 0+ MUMBAI; 1) DATED : 13.06.2014 *.)../ ROSHANI , SR. PS ! ' #$%& ' &$ / COPY OF THE ORDER FORWARDED TO : 1. '$ / THE APPELLANT 2. %&'$ / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. 4*5 6 %)78 , , 78/ , 0+ / DR, ITAT, MUMBAI 6. 6 9: ; + / GUARD FILE ! ( / BY ORDER, )/(* + (DY./ASSTT. REGISTRAR) , 0+ / ITAT, MUMBAI