M/s. Synrefra Engineering & Construction Ltd., Ahmedabad V. The ACIT.,(OSD)Circle-8, Ahmedabad

ITA 865/AHD/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 63223 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 8 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-12-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 04-12-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 23-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K SINGH
• Keywords: Rectification of order; Opportunity of being heard; Principle of natural justice; Retraction; Revised return
• Section: 143(3); 244A; 133A; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, C BENCH, AHMEDABAD BEFORE SHRI A. K. GARODIA, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER I.T.A. NO. 865, 866/ AHD/2010 (ASSESSMENT YEAR 2006-07) M/S. SYNREFRA ENGINEERING & CONSTRUCTION LTD., SUZLON HOUSE, 5, SHRIMLI SOCIETY, NAVRANGPURA, AHMEDABAD VS. ACIT (OSD), CIRCLE 8, AHMEDABAD PAN/GIR NO. : AACCS6871Q I.T.A.NO. 867 & 868/AHD/2010 (ASSESSMENT YEAR 2006-07) M/S. SARJAN REALITIES LTD., VS. ACIT (OSD) CIRCLE -8, SUZLON HOUSE, AHMEDABAD 5, SHRIMALI SOCIETY, NAVRANGPURA, AHMEDABAD PAN: AAACE3472H (APPELLANT) .. (RESPONDENT) APPELLANT BY: SHRI TUSHAR HEMANI, AR RESPONDENT BY: SHRI D K SINGH, SR. DR DATE OF HEARING: 04.12.2012 DATE OF PRONOUNCEMENT: 14.12.2012 O R D E R PER SHRI A. K. GARODIA, AM:- OUT OF THESE FOUR APPEALS FILED BY TWO DIFFERENT A SSESSEES, TWO APPEALS ARE IN THE CASE OF SYNREFRA ENGINEERING & C ONSTRUCTION LTD. VS ACIT FOR THE ASSESSMENT YEAR 2006-07 BEING I.T.A.NO S. 865 & 866/AHD/2010 AND THE REMAINING TWO APPEALS ARE FILE D IN THE CASE OF M/S. I.T.A.NO.865-868 /AHD/2010 2 SARJAN REALITIES LTD. VS ACIT (OSD) FOR THE ASSESSM ENT YEAR 2006-07 BEING I.T.A. NOS. 867 & 868/AHD/2010. 2. THE ISSUE INVOLVED IS COMMON IN THESE CASES AND HENCE, THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY WAY OF THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 3. OUT OF TWO APPEALS FILED BY EACH OF THESE TWO AS SESSEES FOR THE SAME ASSESSMENT YEAR, WE FIND THAT ONE OF THE APPEA L IS ARISING OUT OF THE ORDER PASSED BY THE A.O. U/S 154 WHEREAS THE REMAIN ING ONE APPEAL IS ARISING OUT OF APPEAL EFFECT ORDER PASSED BY THE A. O. ON 05.05.2009 TO GIVE EFFECT TO THE TRIBUNAL ORDER DATED 17.04.2009 BUT THE ISSUE INVOLVED IS COMMON IN BOTH THESE APPEALS OF THESE TWO DIFFERENT ASSESSEES FOR THE SAME ASSESSMENT YEAR. THE APPEAL FIELD BY THE ASSE SSEE AGAINST THE APPEAL EFFECT ORDER PASSED BY THE A.O. IS DELAYED A ND HENCE, WE FIRST DECIDE THE APPEAL FILED BY THE ASSESSEE AGAINST ORD ER PASSED BY THE A.O. UNDER SECTION 154 ORDER PASSED BY THE A.O. I.E. I.T .A.NO. 865/AHD/2010 IN THE CASE OF SYNREFRA ENGINEERING & CONSTRUCTION LTD AND 867/AHD/2010 IN THE CASE OF M/S. SARJAN REALITIES L TD. BOTH SIDES AGREED THAT THE ISSUE INVOLVED IN BOTH THESE CASES IS IDEN TICAL AND HENCE, THE ISSUE CAN BE DECIDED IN ANY ONE OF THE CASES AND THE ORDE R IN THAT CASE CAN BE FOLLOWED IN THE SECOND CASE. HENCE, WE REPRODUCE T HE GROUNDS OF APPEAL RAISED BY THE ASSESSEE M/S. SYNREFRA ENGINEERING & CONSTRUCTION LTD. IN I.T.A.NO. 865/AHD/2010 WHICH ARE AS UNDER: 1 THE ID. CIT(A) HAS ERRED IN LAW AND ON T HE FACTS OF THE CASE IN HOLDING THAT THE IMPUGNED APPEAL AGAINST OR DER U/S 154 OF THE ACT IS NOT MAINTAINABLE AT ALL AND HE FURTHER E RRED IN DISMISSING THE APPEAL OF THE APPELLANT IN LIMINE. 2 THE ID. CIT(A) HAS ERRED IN LAW AND ON THE FACTS OF THE CASE IN NOT APPRECIATING THE FACTS THAT THE ID. AO HAS N OT RECTIFIED THE MISTAKE IN NOT GRANTING INTEREST ON REFUND U/S 244A OF THE ACT FROM I.T.A.NO.865-868 /AHD/2010 3 THE FIRST DAY AFTER THE END OF RELEVANT PREVIOUS YE AR TO THE DATE OF REFUND WHICH IS APPARENT FROM THE RECORDS. 3 THE ID. CIT(A) OUGHT TO HAVE APPRECIATED T HE FACTS THAT THE APPELLANT IS ENTITLED TO RECEIVE INTEREST ON REFUND FROM THE FIRST DAY AFTER THE END OF RELEVANT PREVIOUS YEAR TO THE DATE OF REFUND AND THE ID. AO HAS ERRED IN GRANTING INTEREST FROM THE DATE OF ASSESSMENT ORDER. 4 BOTH THE LOWER AUTHORITIES HAVE ERRED IN L AW AND ON FACTS IN PASSING THE ORDERS WITHOUT PROPERLY APPRECIATING TH E FACT AND THAT HE FURTHER ERRED IN GROSSLY IGNORING VARIOUS SUBMIS SIONS, EXPLANATIONS AND INFORMATION SUBMITTED BY THE APPEL LANT FROM TIME TO TIME WHICH OUGHT TO HAVE BEEN CONSIDERED BEFORE PASSING THE IMPUGNED ORDER. THIS ACTION OF BOTH THE AUTHORITIES IS IN CLEAR BREACH OF LAW AND PRINCIPLES OF NATURAL JUSTICE AND THEREFORE DESERVES TO BE QUASHED. 4. BRIEF FACTS ARE NOTED BY LD. CIT(A) IN PARA 2.1 OF HIS ORDER WHICH IS REPRODUCED BELOW FOR THE SAKE OF READY REFERENCE : 2.1 IN THIS CASE, THE ASSESSEE VIDE ITS APPLICATIO N DT: 1 ST JUNE, 2009 REQUESTED THE A.O. FOR RECTIFICATION OF MISTAKE U/S . 154 APPARENT FROM RECORD WHILE GIVING EFFECT TO THE ORDER OF ITA T DT: 20-5-09. THE MAIN GROUND FOR RECTIFICATION WAS THAT WHILE GR ANTING THE REFUND, THE A.O. HAS NOT GRANTED INTEREST PAYABLE U /S. 244A OF THE I.T. ACT FOR THE PERIOD FROM 1-4-2006 TO 05-5-2009, I.E. ON DATE OF PAYMENT TO DATE OF SUBJECT ORDER IN THE INTEREST OF NATURAL JUSTICE AND EQUITY. IN ITS SUPPORT, THE APPELLANT RELIED ON THE DECISION IN THE CASE OF CIT V. CHOLAMANDALAM INVESTMENT & FINANCE C O. LTD.(2007), 294 ITR 438 (MAD) AND DCIT V. BSES LTD. (2008) 113 TTJ (MUM) 227, WHEREIN IT WAS HELD THAT THE ASS ESSEE HAS TO BE GRANTED INTEREST WHERE TAX WAS NOT REQUIRED TO B E PAID STATUTORILY. THE A.O. VIDE HIS LETTER DT: 7-10-09 S OUGHT DIRECTIONS OF THE CIT-IV, A'BAD STATING THEREIN THAT THERE WAS NO DELAY ON THE PART OF THE REVENUE IN ANY PROCEEDINGS RELATING TO REFUND AND THEREFORE, NO INTEREST U/S. 244A WAS ALLOWABLE TO T HE ASSESSEE AND THE DELAY IF ANY WAS IN FACT ATTRIBUTABLE TO THE AS SESSEE. THE C.I.T. VIDE HIS ORDER U/S. 244A(2) DT: 29-10-09 HAS OBSERV ED AS UNDER:- 'PERUSAL OF CASE RECORDS REVEAL THAT A SURVEY WAS C ARRIED OUT U/S. 133A BY THE INVESTIGATION WING, SURAT, ON 5-4-06 AT THE BUSINESS PREMISES OF SUZLON GROUP OF COMPANIES, INCLUDING TH E PREMISES OF THE PRESENT ASSESSEE, DURING WHICH, THE SUZLON GROU P MADE A I.T.A.NO.865-868 /AHD/2010 4 DISCLOSURE OF RS. 51 CR., OUT OF WHICH AN AMOUNT OF RS. 7 CR. PERTAINED TO THE PRESENT ASSESSEE FOR A.Y. 2006-07. THE ASSESSEE E- FILED ITS RETURN OF INCOME ON 27-12-06 DECLARING A TOTAL INCOME OF RS. 32.38 CR., INCLUSIVE OF THE AMOUNT OF THE DISCL OSURE. LATER ON, THE ASSESSEE FILED A LETTER DT: 28-12-06 REQUESTING THE A.O. TO ADJUST THE DISCLOSED AMOUNT OF RS. 7 CR. AGAINST DISALLOWA NCE OF EXPENSES, DEDUCTIONS ETC. TO BE MADE IN THE ASST. T HE ASST. WAS FINALISED DETERMINING TOTAL INCOME OF RS. 32.38 CR. WITHOUT ANY ADDITIONS/DISALLOWANCES. THE ASSESSEE PREFERRED APPEAL BEFORE THE CIT (A) CL AIMING THAT ASST. SHOULD HAVE BEEN FINALISED AT THE RETURNED IN COME MINUS THE AMOUNT DISCLOSED BY IT, WHICH WAS DISMISSED BY THE CIT (A) IN RESPECT OF TELESCOPING OF DISALLOWANCES AGAINST THE DISCLOSED AMOUNT. ON FURTHER APPEAL TO THE IT AT, THE HON. IT AT DIRECTED THE A.O. TO ALLOW THE CLAIM OF THE ASSESSEE AND AFT ER APPEAL EFFECT TO THE ORDER OF ITAT, THE TOTAL INCOME WAS REDUCED TO RS. 25.38 CR. RESULTING IN A REFUND OF RS. 2.35 CRORES. NO INTERE ST WAS ALLOWED U/S. 244 A OF THE I.T. ACT. THE ASSESSEE IN ITS SUBMISSIONS HAS STATED THAT - A) DURING THE COURSE OF THE SURVEY ACTION AT ITS BU SINESS PREMISES THE DEPTT HAD IMPOUNDED REGISTERS, FLOPPIES, DOCUME NTS ETC. AND IN SPITE OF SEVERAL REQUESTS THE COPIES OF THE IMPOUND ED MATERIAL WERE NOT SUPPLIED TO IT TILL THE LAST DATE OF FILING OF RETURN. B) THE TOTAL INCOME WAS COMPUTED ON THE BASIS OF PR OFIT AND LOSS ACCOUNTS ARRIVED AT FROM BOOKS OF ACCOUNTS REGULARL Y MAINTAINED AND TO AVOID PROTRACTED LITIGATION THE AMOUNT OF CO NTINGENT INCOME WAS INCLUDED TO COVER ANY DISCREPANCY WHICH MAY ARI SE ON ACCOUNT OF DOCUMENTS IMPOUNDED. C) THE RETURN WAS FILED ELECTRONICALLY AND IN ORDER TO EXPLAIN THE FACTS THE ASSESSEE HAD FILED A LETTER ON 28-11-06 S TATING THAT THE CONTINGENT AMOUNT DID NOT FORM PART OF TAXABLE INCO ME. D) RELYING UPON THE JUDICIAL PRONOUNCEMENTS IN CIT VS. CHOLAMANDALAM INVESTMENT & FINANCE CO. LTD. (2007 ) 294 ITR 438 (MAD.) AND DCIT V. BSES LTD. (2008) 113 TTJ (MU M) 227, INTEREST U/S. 244A SHOULD BE ALLOWED FROM 1-4-06 TO 5-5-09. AFTER CONSIDERING THE ABOVE SUBMISSIONS, IT WAS POI NTED OUT TO THE ASSESSEE THAT A) IF THE ASSESSEE SINCERELY BELIEVED THAT A REFUND WAS DUE, IT SHOULD HAVE FILED A RETURN OF INCOME WITHOUT INCLUD ING THE AMOUNT DISCLOSED (RS. 7 CR.) IN ITS TOTAL INCOME. EVEN IF SUCH A BELIEF WAS I.T.A.NO.865-868 /AHD/2010 5 FORMED LATER ON, A REVISED RETURN OF INCOME COULD V ERY WELL HAVE BEEN FILED BY THE ASSESSEE. B) GRANT OF INTEREST U/S. 244A WAS GOVERNED BY CIRC ULAR NO. 549 DT: 31-10-1989. THE ASSESSEE HAD TO SHOW HOW THE CI RCULAR APPLIED TO IT. IN REPLY, IT WAS CONTENDED THAT - A) THE EXAMPLES GIVEN IN THE CIRCULAR COVERED ONLY CASES U/S. 143(1) AND HENCE DID NOT APPLY TO THE ASSESSEE'S CA SE. B) DUE TO THE FAULTY DESIGN OF SOFTWARE, E-FILING O F THE RETURN OF INCOME PREVENTED THE ASSESSEE FROM SHOWING ITS INCO ME CORRECTLY. THE C.I.T., AFTER CONSIDERING THE REPLY OF THE ASSE SSEE, OBSERVED THAT THE ASSESSEE HAD INCLUDED THE AMOUNT OF DISCLO SURE IN ITS TOTAL INCOME DECLARED IN THE RETURN OF INCOME EVEN THOUGH IT IS NOW BEING STRENUOUSLY CONTENDED THAT THE DISCLOSURE MAD E BY IT WAS CONDITIONAL. PERUSAL OF THE COMPUTATION OF INCOME F ILED ALONG WITH A COPY OF PAPER RETURN REVEALED THAT THE DISCLOSED INCOME WAS NOT CREDITED TO THE P&L A/C. BUT WAS ADDED TO THE TOTAL INCOME IN THE COMPUTATION OF INCOME. IT CAN THEREFORE BE SAFELY C ONCLUDED THAT THE ASSESSEE INCLUDED THE DISCLOSED INCOME IN ITS T OTAL INCOME TO AVOID PENALTY U/AS. 271(L)(C) SHOULD ANY ADDITIONS BE MADE ON THE BASIS OF EVIDENCE GATHERED DURING SURVEY. WHILE PROCESSING THE E-RETURN U/S. 143(1) NO ADJUST MENTS, AS REQUESTED BY THE ASSESSEE IN ITS LETTER DT: 28-12-2 009, COULD HAVE BEEN MADE AS THE SAME ARE NOT ALLOWED U/S. 143(1). IT WOULD HAVE BEEN DIFFERENT HAD THE ASSESSEE NOT INCLUDED THE DI SCLOSED INCOME IN ITS TOTAL INCOME OR HAD FILED A REVISED RETURN O F INCOME. IT HAS WRONGLY BEEN CONTENDED THAT THE CORRECT INCOME COUL D NOT BE SHOWN IN THE E-RETURN. IT HAS ALSO BEEN WRONGLY CON TENDED THAT CIRCULAR 549 DOES NOT APPLY TO THE' ASSESSEE'S CASE . THE THIRD EXAMPLE IN THE SAID CIRCULAR ILLUSTRATES A CASE' WH ERE REFUND ARISES OUT AN APPELLATE ORDER. THUS, THE VERY EARLIEST POINT AT WHICH THE ADJUSTME NTS COULD HAVE BEEN MADE WAS AT THE TIME OF PASSING OF THE ORDER U /S. 143(3) ON 27-03-08. HOWEVER, THE A.O. CAME TO BE OF THE OPINI ON THAT HE HAD NO POWER TO REDUCE THE ASSESSED INCOME BELOW THE IN COME DECLARED BY THE ASSESSEE - A VIEW SUBSEQUENTLY NEGATGED BY T HE HON. TRIBUNAL. THE C.I.T. THEREFORE, OBSERVED THAT THE ASSESSEE HA D ITSELF INCLUDED THE DISCLOSED INCOME IN ITS RETURNED INCOME AND THE SAME COULD NOT HAVE BEEN REDUCED AT THE TIME OF PASSING OF THE ORD ER U/S. 143(1). IN FACT, THE ORDER U/S. 143(1) HAD BEEN ACCEPTED WI THOUT ANY I.T.A.NO.865-868 /AHD/2010 6 RESERVATION BY THE ASSESSEE. SINCE THE ASSESSEE'S C ONTENTION COULD NOT HAVE BEEN ACCEPTED AT ANY STAGE BEFORE THE PASS ING OF THE ORDER U/S. 143(3), I AM OF THE VIEW THAT NO INTEREST U/S. 244A CAN BE ALLOWED TO THE ASSESSEE TILL THE DATE OF PASSING TH E ORDER U/S. 143(3). TILL THAT DATE THE DELAY IN DETERMINATION OF REFUND AROSE SOLELY DUE TO THE AMBIVALENT ATTITUDE OF THE ASSESSEE. IN VIEW OF THE ABOVE, THE A.O. IS DIRECTED TO ALLOW INTEREST U/S. 244A TO THE ASSESSEE FROM THE DATE OF PASSING OR OR DER U/S. 143(3), I.E. 27-3-2008 TO THE DATE OF GRANTING OF REFUND.' THE A.O. AS PER DIRECTIONS GIVEN BY THE CIT-IV, AHM EDABAD, HAS GRANTED REFUND FROM THE DATE OF PASSING OF ORDER U/ S. 143(3), I.E. 27-3-08 TO THE DATE OF GRANTING THE REFUND (20-5-09 ), VIDE HIS ORDER DATED 16-11-2009. 5. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTE IN APPEAL BEFORE LD. CIT(A) BUT WITHOUT SUCCESS AND NOW, THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 6. IT IS SUBMITTED BY THE LD. A.R. THAT THE DECISIO N OF LD. CIT(A) IS ON THIS BASIS THAT THERE IS NO APPARENT MISTAKE IN THE ORDER PASSED BY THE A.O. WHILE GIVING EFFECT TO THE TRIBUNAL ORDER AND HENCE, THE SAME CANNOT BE RECTIFIED U/S 154 OF THE INCOME TAX ACT, 1961. THE 2 ND BASIS OF THE LD. CIT(A)S ORDER IS THIS THAT THE APPEAL IS BEYOND JU RISDICTION OF LD. CIT(A) BECAUSE THERE IS DIRECTION OF THE LD. CIT U/S 244A( 2) OF THE INCOME TAX ACT, 1961 AND AS PER THIS SECTION, THIS ORDER U/S 2 44A(2) IS FINAL AND AS PER THE DOCTRINE OF MERGER, THIS HAS MERGED WITH TH E A.O.S ORDER IN RESPECT OF THIS ISSUE. HE SUBMITTED THAT NO INTERE ST WAS ALLOWED BY THE A.O. U/S 244A AS PER THE APPEAL EFFECT ORDER PASSED BY HIM ON 05.05.2009. AGAINST THIS, THE ASSESSEE MOVED AN AP PLICATION U/S 154 I.E. ON 01.02.2009 FOR ALLOWING INTEREST U/S 244A FROM 0 1.04.2006 TO 05.05.2009 AND AS PER THE ORDER PASSED BY THE A.O. U/S 154 ON 16.11.2009, HE HAS ALLOWED INTEREST U/S 244A TO THE ASSESSEE FROM THE DATE OF ASSESSMENT ORDER PASSED BY THE A.O. U/S 143 (3) ON 27.03.2008 TO I.T.A.NO.865-868 /AHD/2010 7 THE DATE OF GRANTING THE REFUND I.E. 20.05.2009 AND HE REJECTED THE CLAIM OF THE ASSESSEE FOR THE PERIOD FORM 01.04.2006 TO 2 6.03.2008 AND HENCE, IT CANNOT BE SAID THAT THERE IS NO APPARENT MISTAKE IN THE ORDER PASSED BY THE A.O. WHICH CAN BE RECTIFIED U/S 154 OF THE ACT. RE GARDING THIS OBJECTION OF LD. CIT(A) THAT THE ORDER PASSED BY CIT U/S 244A (2) IS FINAL AND CIT(A) HAS NO JURISDICTION AGAINST THIS DIRECTION O F CIT, IT WAS SUBMITTED THAT APPEAL OF THE ASSESSEE IS NOT AGAINST THE DIRE CTION OF CIT U/S 244A(2) BUT THE APPEAL OF THE ASSESSEE IS AGAINST THE ORDER PASSED BY THE A.O. U/S 154. LD. D.R. SUPPORTED THE ORDERS OF AUTHORITIES BELOW. HE HAS SUBMITTED THAT AS PER THE PROVISIONS OF SECTION 244 A(2), THE DECISION OF CHIEF CIT OR CIT SHALL BE FINAL AND HENCE, THE SAME CANNOT BE DISTURBED BY THE APPELLATE AUTHORITY BEING THE CIT(A) OR THE TRIBUNAL AND THE ASSESSEE HAS REMEDY TO FILE WRIT BEFORE HONBLE HIG H COURT AND THIS MATTER CANNOT BE TAKEN BEFORE THE TRIBUNAL BY WAY O F FILING APPEAL. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSE D THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF AUTHORIT IES BELOW. WE FIND THAT AS PER THE ORDER PASSED BY THE A.O. U/S 154 ON 16.11.2009 ON THE APPLICATION OF THE ASSESSEE DATED 01.06.2009, THIS WAS THE CLAIM OF THE ASSESSEE BEFORE THE A.O. FOR ALLOWING INTEREST U/S 244A OF THE INCOME TAX ACT, 1961 W.E.F. 01.04.2006 TO 05.05.2009. THE A.O . HAS ALLOWED INTEREST U/S 144A FROM 27.03.2008 TO 20.05.2009. THIS PERIO D FOR ALLOWING INTEREST TO THE ASSESSEE U/S 244A HAS BEEN DETERMIN ED BY THE A.O. AS PER THE ORDER PASSED BY LD. CIT AHMEDABAD U/S 244A(2) O F THE INCOME TAX ACT, 1961 ON 07.10.2009. UNDER THESE FACTS, WE ARE OF THE CONSIDERED OPINION THAT THIS OBJECTION OF LD. CIT(A) IS NOT VA LID THAT NON GRANTING OF INTEREST FOR THIS PERIOD CANNOT BE SAID TO BE AN AP PARENT MISTAKE IN THE ORDER OF THE A.O. THE A.O. HIMSELF HAS ALLOWED INT EREST FOR THE PERIOD I.T.A.NO.865-868 /AHD/2010 8 FORM 27.03.2008 TO 28.05.2009 AS PER THIS VERY ORDE R PASSED BY HIM U/S 154 AND HENCE, NON ALLOWANCE OF INTEREST TO THE ASS ESSEE U/S 244A WAS ACCEPTED BY THE A.O. ALSO AS AN APPARENT MISTAKE IN THE ORDER PASSED BY HIM U/S 154 AND, THEREFORE, LD. CIT(A) IS NOT JUSTI FIED IN SAYING AS PER PARA 2.3 OF HIS ORDER ON PAGE 14 THAT THE ISSUE AGI TATED IS NOT A MISTAKE APPARENT FROM RECORD WHICH CAN BE RECTIFIED U/S 154 OF THE INCOME TAX ACT, 1961. THIS OBJECTION OF LD. CIT(A) IS REJECTE D. 8. THE 2 ND OBJECTION OF LD. CIT(A) IS THIS THAT SINCE THERE I S DIRECTION FROM THE CIT U/S 244A(2) OF THE INCOME TAX ACT, 196 1, THIS DIRECTION IS FINAL AND, THEREFORE, NO APPEAL LIES BEFORE HIM AGA INST THIS DIRECTION OF CIT. AT THIS JUNCTURE, WE REPRODUCE THE PROVISIONS OF SUB-SECTION (2) OF SECTION 244A WHICH ARE AS UNDER: SECTION 244A(2): IF THE PROCEEDINGS RESULTING IN THE REFUND ARE DELAYED FOR REASONS ATTRIBUTABLE TO THE ASSESSEE, W HETHER WHOLLY OR IN PART, THE PERIOD OF DELAY SO ATTRIBUTABLE TO HIM SHALL BE EXCLUDED FROM THE PERIOD FOR WHICH INTEREST IS PAYABLE, AND WHERE ANY QUESTION ARISES AS TO THE PERIOD TO BE EXCLUDED, IT SHALL BE DECIDED BY THE CHIEF COMMISSIONER OR COMMISSIONER WHOSE DEC ISION THEREON SHALL BE FINAL. 9. FROM THE ABOVE PROVISIONS OF SUB-SECTION (2) OF SECTION 244A OF THE INCOME TAX ACT, 1961, WE FIND THAT REGARDING TH E PERIOD OF DELAY, WHICH CAN BE SAID TO BE ATTRIBUTABLE TO THE ASSESSE E AND, THEREFORE, TO BE EXCLUDED FROM THE PERIOD FOR WHICH INTEREST IS PAYA BLE, THE SAME SHOULD BE DECIDED BY CHIEF CIT OR CIT WHOSE DECISION THERE ON SHALL BE FINAL. NOW, THE QUESTION IS WHETHER THE PRESENT APPEAL IS AGAINST THE ORDER PASSED BY CIT U/S 244A(2) OR AGAINST THE ORDER PASS ED BY THE A.O. U/S 154. IN OUR CONSIDERED OPINION, THE PRESENT APPEAL IS ARISING OUT OF THE ORDER PASSED BY THE A.O. U/S 154 AND IT IS NOT AGAI NST THE ORDER PASSED BY CIT U/S 244A(2). MOREOVER, IN OUR CONSIDERED OPINI ON, THE FINALITY OF THE I.T.A.NO.865-868 /AHD/2010 9 ORDER PASSED BY CHIEF CIT OR CIT U/S 244A(2) IS QUA THE A.O. I.E. THE DEPARTMENTAL AUTHORITIES WHO HAS REFERRED THE MATTE R TO THE CHIEF CIT OR CIT BUT IT CANNOT BE TAKEN TO BE FINAL AGAINST THE ASSESSEE BECAUSE THERE IS NO PROVISION U/S 244A(2) FOR GRANTING HEARING TO TH E ASSESSEE BEFORE TAKING A DECISION U/S 244A(2) AND, THEREFORE, ANY O RDER PASSED BY CHIEF CIT OR CIT U/S 244A(2) CANNOT BE TAKEN TO BE FINAL QUA THE ASSESSEE BECAUSE NO OPPORTUNITY OF HEARING IS ALLOWED TO THE ASSESSEE BEFORE PASSING THIS ORDER BY THE CHIEF CIT OR CIT AND, THE REFORE, THE PRINCIPLES OF NATURAL JUSTICE ARE NOT FOLLOWED AND HENCE, THE FINALITY OF THIS DECISION OF CHIEF CIT OR CIT IS RESTRICTED TO QUA THE A.O. A ND DEPARTMENTAL AUTHORITY WHO HAS REFERRED THE MATTER TO CHIEF CIT OR CIT AND IT CANNOT BE ACCEPTED AS FINAL QUA THE ASSESSEE. IN THE PRESENT CASE, THE ASSESSEE IS DISPUTING THE PERIOD FOR WHICH INTEREST SHOULD BE G RANTED TO IT U/S 244A AND HENCE, IN OUR CONSIDERED OPINION, THE SAME HAS TO BE DECIDED AS PER LAW AFTER PROVIDING OPPORTUNITY OF BEING HEARD TO B OTH THE SIDES. 10. WE HAVE SEEN THAT BOTH THE TECHNICAL OBJECTIONS TAKEN BY LD. CIT(A) ARE WITHOUT MERIT. AS PER THE PROVISIONS OF LAW, IF THE DELAY IN GRANTING REFUND TO THE ASSESSEE IS FOR THE REASONS WHICH IS ATTRIBUTABLE TO THE ASSESSEE THEN, SUCH PERIOD HAS TO BE EXCLUDED F ROM THE PERIOD FOR WHICH INTEREST HAS TO BE GRANTED TO THE ASSESSEE U/ S 244A. THE CASE OF THE REVENUE IS THIS THAT SINCE EXTRA INCOME WAS DECLARE D BY THE ASSESSEE IN THE RETURN OF INCOME FILED BY IT, DEPARTMENT COULD NOT HAVE GRANTED REFUND TO THE ASSESSEE TO THE EXTENT OF TAX PAYABLE ON SUCH E XTRA INCOME BEFORE THE DATE OF THE ASSESSMENT ORDER PASSED BY THE A.O. U/S 143(3) AND, THEREFORE, UP TO THIS DATE, THE DELAY IN REFUND IS ATTRIBUTABL E TO THE ASSESSEE AND HENCE, INTEREST IS NOT ALLOWABLE TO THE ASSESSEE FO R THIS PERIOD I.E. I.T.A.NO.865-868 /AHD/2010 10 01.04.2006 TO 26.03.2008 AND THE ASSESSMENT ORDER P ASSED BY THE A.O. U/S 143(3) IS DATED 27.03.2008. 11. RELIANCE WAS PLACED BY THE LD. D.R. ON THE JUDG EMENT OF HONBLE GAUHATI HIGH COURT RENDERED IN THE CASE OF CIT VS A SSAM ROOFING LTD. AS REPORTED IN 330 ITR 87. HE ALSO PLACED RELIANCE ON THE JUDGMENT OF HONBLE M.P. HIGH COURT RENDERED IN THE CASE OF UNI VERSAL CABLES AS REPORTED IN 237 CTR 157. REGARDING THE FIRST JUDGE MENT CITED BY THE LD. D.R. RENDERED IN THE CASE OF ASSAM ROOFING LTD. (SU PRA), WE FIND THAT IN THAT CASE, EXTRA INCOME WAS INCLUDED BY THE ASSESSE E IN THE RETURN OF INCOME AND NO OBJECTION WAS RAISED TILL THE ASSESSM ENT WAS FINALIZED BY THE A.O. U/S 143(3) OF THE INCOME TAX ACT, 1961. I N THE PRESENT CASE, THE RETURN OF INCOME WAS FILED BY THE ASSESSEE ON 27.12 .2006 AND IMMEDIATELY THEREAFTER ON 28.11.2006, THE ASSESSEE RETRACTED THE DISCLOSURE AND THIS ASPECT HAS BEEN NOTED BY THE TR IBUNAL IN ITS ORDER DATED 17.04.2009 WHICH IS AVAILABLE ON PAGES 66-79 OF THE PAPER BOOK AND THIS ASPECT HAS BEEN NOTED IN PARA 5 OF THIS TR IBUNAL ORDER WHICH IS AVAILABLE ON PAGE 67A OF THE PAPER BOOK. THIS PARA 5 OF THIS TRIBUNAL ORDER IS REPRODUCED BELOW FOR THE SAKE OF READY REF ERENCE: 5. SUBSEQUENTLY, THE ASSESSEE REQUESTED THE ASSTT. DIRECTOR OF INCOME TAX (INV-III) SURAT VIDE LETTERS DATED 12.12 .2006 AND 18.12.2006 O PROVIDING THE COPIES OF IMPOUNDED MATE RIALS SO THAT ASSESSEE CAN TAKE PROPER REFERENCE AND COGNIZANCE O F THE SAID MATERIALS BEFORE FILING OF RETURNS OF INCOME. NO O PPORTUNITY WAS PROVIDED OR NO COPIES OR ASSESS TO THE SEIZED MATER IALS WAS PROVIDED TILL 28.12.2006. ACCORDINGLY, THE ASSESSE E VIE LETTER DATED 28.12.2006, RETRACTED THE DISCLOSURE AND THE RELEVA NT PARA OF THE LETTER READS AS UNDER: IN ALL HUMILITY IT IS THE CASE OF SUZLON GROUP OF COMPANIES THAT ALL EXPENSES DEDUCTED AND OTHER CLAIMS MADE BY ARE GENUINE AND ADMISSIBLE AT LAW AND THEREFORE, THE AM OUNT OF VOLUNTARY DISCLOSURE REFERRED TO HEREINABOVE HAS NO T BEEN SPECIFICALLY IDENTIFIED IN REFERENCE TO ANY EXPENSE S, I.T.A.NO.865-868 /AHD/2010 11 DISCREPANCIES OF ASSETS. ACCORDINGLY, IF DURING TH E COURSE OF ASSESSMENT PROCEEDINGS OR APPELLATE /REVISION PROCE EDINGS IF ADDITION IS MADE TO THE RETURNED INCOME WITHOUT TAK ING INTO ACCOUNT THE DISCLOSURE OF ASSESSEE, EITHER DUE TO D ISALLOWANCE OF EXPENSES OR DEDUCTION OR OTHERWISE THEN TO THE E XTENT OF DISCLOSURE MADE BY THE ASSESSEE, THE ADDITION BE TE LESCOPED AGAINST THE DISCLOSURE AND NO SEPARATE ADDITION BE MADE AGAIN. FURTHER THE TAX REMAINING IN ADDITION TO SU RPLUS AMOUNT OF DISCLOSURE BE REFUNDED TO THE ASSESSEE. 12. IT IS ALSO NOTED BY THE TRIBUNAL IN THE SAME PA RA THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS ALSO, THE ASSESSEE REQUESTED VIDE LETTER DATED 29.02.2008 REGARDING DISCLOSURE OF RS.7 CRORE S AND ITS RETRACTION. HENCE, IT IS SEEN THAT IN THE PRESENT CASE, THE RET RACTION WAS MADE BY THE ASSESSEE IMMEDIATELY AFTER FILING THE RETURN OF INC OME AND ALSO DURING ASSESSMENT PROCEEDINGS AND, THEREFORE, THE FACTS WA S DIFFERENT, AND HENCE, THIS JUDGEMENT OF HONBLE GAUHATI HIGH COURT CITED BY THE LD. D.R. IS NOT APPLICABLE IN THE PRESENT CASE. 13. REGARDING THE RELIANCE PLACED BY THE LD. D.R. O N THE JUDGEMENT OF HONBLE M.P. HIGH COURT RENDERED IN THE CASE OF UNI VERSAL CABLES (SUPRA), WE FIND THAT IN THAT CASE, THE ISSUE INVOL VED WAS REGARDING GRANTING OF INTEREST U/S 244A ON REFUND OF TDS TO D EDUCTOR. IN THAT CASE, THE ASSESSEE HAD ERRONEOUSLY DEDUCTED TAX AT SOURCE FROM PAYMENTS MADE TO IDBI IN THE ABSENCE OF ANY STATUTORY LIABILITY T O MAKE SUCH DEDUCTION. UNDER THESE FACTS, IT WAS HELD THAT THE SUBSEQUENT REFUND OF SUCH TAX ALLOWED TO IT CAN BE A REFUND UNDER THE ACT BUT IN PURSUANCE TO CIRCULAR NO.285 DATED 21.10.1980, THE ASSESSEE IS NOT ENTITL ED TO INTEREST U/S 244A ON SUCH REFUND. THIS JUDGEMENT IS ALSO NOT APPLICA BLE IN THE PRESENT CASE, BECAUSE IN THAT CASE IT WAS HELD THAT THE ASSESSEE IS NOT ENTITLED TO ANY INTEREST U/S 244A BECAUSE REFUND WAS NOT ARISING UN DER THIS ACT. I.T.A.NO.865-868 /AHD/2010 12 WHEREAS, IN THE PRESENT CASE, REFUND HAS ARISEN AS PER THE PROVISIONS OF INCOME TAX ACT, 1961 AND NOT AS PER ANY CIRCULAR AN D, THEREFORE, THIS JUDGEMENT IS ALSO NOT APPLICABLE IN THE PRESENT CAS E. 14. NOW, WE HAVE SEEN THAT NONE OF THE JUDGEMENTS C ITED BY THE LD. D.R. IS APPLICABLE IN THE PRESENT CASE AND THE OBJE CTIONS TAKEN BY LD. CIT(A) ARE NOT VALID. WE HAVE TO DECIDE THE MERIT OF THE CLAIM OF THE ASSESSEE TO GRANT INTEREST FOR THE PERIOD FROM 01.0 4.2006 TO 26.03.2008. WE FIND THAT IN THE PRESENT CASE, REFUND IS ARISING OUT OF TDS AND ADVANCE TAX PAID BY THE ASSESSEE AND NOT OUT OF ANY SELF AS SESSMENT TAX OR ANY OTHER PAYMENT OF TAX AND HENCE, THE ASSESSEE IS ELI GIBLE FOR INTEREST FROM THE 1 ST DAY OF ASSESSMENT YEAR TILL THE DATE OF GRANTING R EFUND. THE A.O. HAS ALLOWED INTEREST FORM 27.03.208 TO THE DATE OF GRANTING OF REFUND AND, THEREFORE, FOR THE PERIOD IN DISPUTE FOR WHICH INTE REST SHOULD BE ALLOWED BY THE A.O. IS FROM 01.04.2006 TO 29.02.2008 I.E. F OR 23 MONTHS ON REFUND OF RS.235.62 LACS. THE RELEVANT ASPECT ON W HICH THE ALLOWABILITY OF INTEREST IS DENIED IS THIS THAT AS TO WHETHER TH ERE WAS ANY DELAY ATTRIBUTABLE TO THE ASSESSEE IN GRANTING REFUND. I N OUR CONSIDERED OPINION, SINCE THE RETRACTION WAS MADE BY THE ASSESSEE IMMED IATELY AFTER FILING THE RETURN OF INCOME AND DURING THE COURSE OF ASSESSMEN T PROCEEDING ALSO, IT CANNOT BE SAID THAT THE DELAY IN GRANTING REFUND IS ATTRIBUTABLE TO THE ASSESSEE IN THE PRESENT CASE AND, THEREFORE, INTERE ST IS ALLOWABLE TO THE ASSESSEE FOR THIS PERIOD ALSO I.E. FROM 01.04.2006 TO 29.02.2008. WE ORDER ACCORDINGLY AND DIRECT THE A.O. TO GRANT INTE REST U/S 244A FOR THIS PERIOD ALSO. 15. IN THE RESULT, THE APPEAL OF THE ASSESSEE STAND S ALLOWED. 16. THE 2 ND APPEAL OF THIS ASSESSEE BEING I.T.A.NO. 866/AHD/20 10 WHICH IS ARISING OUT OF THE APPEAL EFFECT ORDER PAS SED BY THE A.O. HAS I.T.A.NO.865-868 /AHD/2010 13 BECOME INFRUCTUOUS IN VIEW OF OUR DECISION IN I.T.A .NO. 865/AHD/2010 AND HENCE, THE SAME IS DISMISSED AS INFRUCTUOUS. 17. NOW, WE TAKE UP THE APPEAL OF THE SECOND ASSESS EE I.E. M/S. SARJAN REALITIES LTD. IN I.T.A.NO. 867/AHD/2010. IT WAS A GREED BY BOTH THE SIDES THAT THE ISSUE INVOLVED AND FACTS IN THIS CASE ARE IDENTICAL EXCEPT ONE DIFFERENCE THAT IN THIS CASE, ENTIRE REFUND IS NOT ARISING OUT OF PAYMENT OF TDS AND ADVANCE TAX. IT IS POINTED OUT THAT IN THI S CASE, OUT OF TOTAL REFUND ARISING TO THE ASSESSEE OF RS.1,73,09,284/-, A PAYMENT OF RS.168.30 LACS WAS MADE BY WAY OF SELF ASSESSMENT T AX ON 26.07.2006 AND HENCE, ONLY THE BALANCE AMOUNT OF REFUND OF RS. 4,79,284/- WAS ARISING OUT OF PAYMENT OF ADVANCE TAX AND TDS AND, THEREFORE, ON THIS AMOUNT INTEREST IS TO BE PAID FORM 01.04.2006 AND F OR BALANCE AMOUNT OF REFUND OUT OF PAYMENT OF SELF ASSESSMENT TAX, INTER EST IS PAYABLE FROM THE DATE ON WHICH SELF ASSESSMENT TAX WAS PAID I.E. FRO M 26.07.2006. IT WAS SUBMITTED THAT FOR THE FIRST AMOUNT I.E. RS.4,79,28 4/-, INTEREST IS PAYABLE FOR 23 MONTHS AND FOR THE BALANCE AMOUNT OF REFUND OF RS.168.30 LACS, INTEREST IS ALLOWABLE FOR 20 MONTHS I.E. FROM 26.07 .2006 TO 29.02.2008. SINCE ADMITTEDLY, THE ISSUE INVOLVED AND FACTS IN T HE PRESENT CASE ARE SIMILAR TO THE ISSUE INVOLVED AND FACTS IN THE CASE OF SYNREFRA ENGINEERING & CONSTRUCTION LTD., ON THE SAME LINES, IN THE PRES ENT CASE ALSO, WE HOLD THAT THE ASSESSEE IS ELIGIBLE FOR INTEREST U/S 244A FOR THE ENTIRE PERIOD FOR WHICH INTEREST IS ALLOWABLE U/S 244A. THERE IS NO PERIOD FOR WHICH THE REFUND WAS DELAYED BECAUSE OF REASONS ATTRIBUTABLE TO THE ASSESSEE AND HENCE, NO PERIOD IS REQUIRED TO BE EXCLUDED FOR COM PUTING INTEREST PAYABLE TO THE ASSESSEE U/S 244A. SINCE, IN THE PR ESENT CASE, THE REFUND IS ARISING PARTLY ON ACCOUNT OF PAYMENT OF TDS AND ADV ANCE TAX, AND THE MAJOR PART OF REFUND IS ARISING OUT OF PAYMENT OF S ELF ASSESSMENT TAX OF I.T.A.NO.865-868 /AHD/2010 14 RS.168.30 LACS, INTEREST SHOULD BE GRATED TO THE AS SESSEE UP TO THE PERIOD 29.02.2008 STATING FORM 01.04.2006 IN RESPECT OF RE FUND ARISING OUT OF TDS AND ADVANCE TAX AND STARTING FROM DATE OF PAYME NT OF SELF ASSESSMENT TAX IN RESPECT OF REFUND ARISING OUT OF PAYMENT OF SELF ASSESSMENT TAX. WE HOLD ACCORDINGLY. THE A.O. IS DIRECTED TO GRANT FURTHER INTEREST TO THE ASSESSEE AS PER ABOVE DISCU SSION. 18. IN THE RESULT, THIS APPEAL OF THE ASSESSEE IS A LLOWED. 19. THE REMAINING ONE APPEAL OF THE ASSESSEE IN I.T .A.NO. 868/AHD/2010 HAS BECOME INFRUCTUOUS IN VIEW OF OUR DECISION AS PER ABOVE PARA IN I.T.A.NO. 867/AHD/2010 AND HENCE, THI S APPEAL IS DISMISSED AS INFRUCTUOUS. 20. IN THE COMBINED RESULT, APPEALS OF THE ASSESSEE IN I.T.A. NOS. 865 AND 867/AHD/2010 ARE ALLOWED AND THE REMAINING TWO APPEALS IN I.T.A.NO. 866 & 868/AHD/2010 ARE DISMISSED. 21. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED HEREINABOVE. SD./- SD./- (KUL BHARAT) (A. K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER SP COPY OF THE ORDER FORWARDED TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT (APPEALS) 5. THE DR, AHMEDABAD BY ORDER 6. THE GUARD FILE AR,ITAT,AHMEDABAD I.T.A.NO.865-868 /AHD/2010 15 1. DATE OF DICTATION 11/12/2012 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 13/12/2012.OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P .S./P.S. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 14/12/2012 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S.14/12 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 14/12/2012 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK .. 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER . 9. DATE OF DESPATCH OF THE ORDER. .