M/s Bhagat Construction Co Pvt Ltd, New Delhi V. ACIT, New Delhi

ITA 895/DEL/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 3841 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 2 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 25-05-2011
• Assessment Year: 1992-1993
• Appeal Filed On: 09-03-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: BANITA DEVI
• Section: 143(3); 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH : A NEW DELHI) BEFORE SHRI R.P. TOLANI , JUDICIAL MEMBER AND SHRI K.D. RANJAN, ACCOUNTANT MEMBER I.T.A. NO.895/DEL./2009 (ASSESSMENT YEAR : 1992-93) M/S BHAGAT CONSTRUCITON CO. PVT. LTD., VS. ITO, WA RD 1(1), B-16, BHAGWAN DAS NAGAR, NEW DELHI. NEW DELHI. (PAN/GIR NO.AAACB0342F) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI BHARAT BERIWAL, ADV. REVENUE BY : MS. BANITA DEVI, SR.DR ORDER PER K.D. RAJNAN, AM THIS APPEAL BY THE ASSESSEE FOR ASSESSMENT YEAR 1 992-93 ARISES OUT OF THE ORDER OF CIT(A)-III, NEW DELHI. THE GROUNDS OF APPEAL RAISE D ARE AS UNDER: 1. ON THE FACTS AND IN LAW, THE ORDER OF THE LD. C IT (A) DATED 30.12.08, IS UNSUSTAINABLE AND LIABLE TO BE SET ASIDE. 2. ON THE FACTS AND IN LAW, THE LD. CIT (A) ERRED I N DISMISSING THE APPEAL IN LIMINE OF THE ASSESSEE ON THE GROUND THAT NO INFIRM ITY BEING POINTED OUT BY THE ASSESSEE AND NOT APPRECIATING THE PATENT INFIRM ITY AS TO HOW CAN A DEMAND BE RAISED IN AN ORDER GIVING APPEAL EFFECT W HERE THE APPEAL OF THE ASSESSEE HAS BEEN ALLOWED BY THE ITAT. I.T.A. NO.895/DEL./2009 (A.Y. : 1992-93) 2 3. ON THE FACTS AND IN LAW, THE CIT (A) HAS ERRED IN HOLDING THAT CHARGE OF INTEREST U/S 220(2) . IS NOT APPEALABLE WITHOUT APP RECIATING THAT SUCH ISSUE WAS INCIDENTAL TO THE MAIN APPEAL FILED ULS 254 OF THE INCOME TAX ACT, 1961 ('ACT') AND EXPLANATION TO SECTION 251 OF THE ACT GRANTS ENOUGH POWERS TO THE CIT(A) TO DECIDE PROCEEDINGS INCIDENT AL OR ARISING OUT OF THE PROCEEDINGS IN WHICH THE ORDER APPEALED AGAINST WAS PASSED. 4. ON THE FACTS AND IN LAW, WHETHER THE CIT(A) WAS JUSTIFIED IN OBSERVING THAT NO INFIRMITY WAS POINTED OUT IN THE ORDER U1S 254 O F THE LD. AO, WHEN THE INFIRMITY RELATING TO THE NON GIVING OF DUE CREDIT FOR PREPAID TAXES AND RAISING A DEMAND OF OVER RS. 90 LACS WAS PATENT AND SUCH ISSUE COULD BE ADJUDICATED BY HIM IN PURSUANCE TO HIS POWERS U1S 2 50(5) OF THE ACT? 5. ON THE FACTS AND IN LAW, WHETHER THE LD. CIT(A) ERRED IN NOT APPRECIATING THAT THE ORDER GIVING APPEAL EFFECT PASSED BY THE AO, WAS INVALID BEING PASSED AFTER A LONG PERIOD OF 5 YEARS. 6. ON THE FACTS AND IN LAW, THE LD. CIT(A) ERRED I N NOT APPRECIATING THE FACT THAT THE ORDER GIVING APPEAL EFFECT WAS PASSED BY THE AO AFTER A LONG PERIOD OF 5 YEARS WHICH RESULTED IN A EXCESSIVE INT EREST LIABILITY U/S 220 OF THE ACT. 2. THE ONLY ISSUE FOR CONSIDERATION INVOLVED IN THE GROUNDS OF APPEAL RELATES TO CHARGING OF INTEREST U/S 220(2) OF THE I.T. ACT, 19 61. THE FACTS OF THE CASE STATED IN BRIEF ARE THAT FOR ASSESSMENT YEAR 1992-93, THE AO WHILE COMPLETING ASSESSMENT U/S 143(3) OF THE ACT, CHARGED INTEREST U/S 234B OF THE INCOME T AX ACT, 1961(HEREIN AFTER REFERRED AS THE ACT). THE MATTER TRAVELED UP TO THE LEVEL OF ITAT. THE ITAT VIDE ORDER DATED 28.05.1999 DECIDED THE APPEAL. HOWEVER, THE GROUND RELATING TO CHARGING OF INTEREST U/S 234B WAS OMITTED TO BE DECIDED UPON. THE ASSESSEE BY MEANS OF AN APPLICATION U/S 254(2) OF THE ACT POINTED OUT THE MISTAKE COMMITTED BY THE TRIBUNAL IN NOT DECIDING THE GROUND RELATING TO CHARGING OF INTEREST U/S 234B OF THE ACT. THE ITAT EXAMINED THE CONTENTION OF THE ASSESSEE AND VIDE ORDER DATED 12. 11.2002 IN I.T.A. NO.2166/DEL./96 QUASHED THE LEVY OF INTEREST U/S 234B OF THE ACT. THE AO GAVE EFFECT TO THE ORDER OF ITAT CANCELING THE LEVY OF INTEREST U/S 234B OF THE ACT ON 19.11.2007. THE AO AS IS EVIDENT FORM ITNS 150 DETERMINED THE TAX PAYABLE AT RS. 45,16,687/-. THE AO CHARGED INTEREST U/S 220 AFTER CONSIDERING THE TAX PAID BY THE ASSESSEE ON VARIOUS DATES FOR WHICH NECESSARY EVIDENCE WAS FILED/AVAILABLE ON RECORD. I.T.A. NO.895/DEL./2009 (A.Y. : 1992-93) 3 3. THE ASSESSEE PREFERRED APPEAL BEFORE CIT(A) RAIS ING THE FOLLOWING GROUNDS: 1. THE ORDER PASSED BY THE ACIT U/S 254 OF THE I.T . ACT, 1961 IS ERRONEOUS BOTH ON FACTS AND IN LAW. 2. THE ACIT WHILE GIVING APPEAL EFFECT TO THE ORDER OF THE ITAT DATED 12.11.2002 ERRED IN CREATING A DEMAND OF RS. 90,02, 255 (INCLUDING INTEREST RS. 42,07,445 U/S 220(2) BY NOT GIVING DUE CREDIT FOR TAXES PAID BY THE APPELLANT PURSUANT TO THE ASSESSMENT OR DER. 3. THE ACIT ERRED BOTH ON FACTS AND IN LAW IN CHARG ING INTEREST U/S 220(2) TO THE TUNE OF RS.42,07,445 BY NOT PASSING T HE APPEAL EFFECT ORDER FOR A PERIOD EXCEEDING 5 YEARS. 4. THE APPELLANT RESERVES THE RIGHT TO AMEND ADD OR WITHDRAW ANY OF THE AFORESAID GROUNDS OF APPEAL AT THE TIME OF HEAR ING. 4. THE CIT(A) TREATED GROUND NOS.1 & 4 GENERAL IN N ATURE. AS REGARDS GROUND NO.3 RAISED BY THE ASSESSEE, CIT(A) OBSERVED THAT THE AS SESSEE HAD FILED APPEAL AGAINST ORDER GIVING APPEAL EFFECT TO ORDER PASSED BY THE TRIBUNA L U/S 254 MADE BY THE AO. THE AO HAD DULY COMPLIED WITH THE DIRECTIONS GIVEN BY THE ITAT IN ITS ORDER AND THE ASSESSEE HAD NOT POINTED OUT ANY INFIRMITY IN THE ORDER GIVING E FFECT TO ORDER U/S 254. SINCE AO HAD GIVEN EFFECT TO ORDER OF ITAT IN ENTIRETY, CIT(A) OBSERVED THAT THE ASSESSEE COULD NOT RAISE A FRESH ISSUE AGAINST THE ORDER PASSED BY THE AO GIVING EFFECT TO THE ORDER U/S 254. COMING TO GROUND NO.3 RELATING TO CHARGING OF INTER EST U/S 220(2) OF THE ACT AT RS.42,07,485, WHEN LD. CIT(A) POINTED OUT TO THE LD . AR OF THE ASSESSEE THAT CHARGING OF INTEREST U/S 220(2) WAS NOT APPEALABLE BEFORE CIT(A ), THE ASSESSEE VIDE ITS LETTER DATED 03.11.2008 WITHDREW THIS GROUND OF APPEAL. THE CI T (A) IN VIEW OF THE FACT THAT GROUND RELATING TO CHARGING OF INTEREST U/S 220(2) WAS NOT PRESSED BY THE ASSESSEE, HE DISMISSED THE GROUND AS SUCH. THE CIT (A), THEREFORE, DISMIS SED THE APPEAL AS NOT MAINTAINABLE. 5. BEFORE US, THE ASSESSEE HAD RAISED AS MANY AS 7 GROUNDS WHICH ARE MAINLY DIRECTED AGAINST LEVY OF INTEREST U/S 220(2) OF THE ACT. THE ASSESSEE IN THE GROUNDS OF I.T.A. NO.895/DEL./2009 (A.Y. : 1992-93) 4 APPEAL HAS STATED THAT DEMAND COULD NOT BE RAISED I N AN ORDER GIVING APPEAL EFFECT WHERE THE APPEAL OF THE ASSESSEE HAS BEEN ALLOWED BY THE ITAT. IT HAS ALSO BEEN STATED THAT THE CIT (A) HAS ERRED IN HOLDING THAT CHARGING OF INTER EST U/S 220(2) OF THE ACT IS NOT APPEALABLE WITHOUT APPRECIATING THAT SUCH AN ISSUE WAS INCIDENTAL TO MAIN APPEAL FILED U/S 254 OF THE ACT AND EXPLANATION TO SECTION 251 OF TH E ACT, GRANTS ENOUGH POWER TO CIT(A) TO DECIDE THE PROCEEDINGS INCIDENTALLY OR ARISING O UT OF THE PROCEEDINGS IN WHICH THE ORDER APPEALED AGAINST WAS PASSED. LD. AR. HAS SUBMITTED THAT THE AO HAD NOT GIVEN CREDIT TO CERTAIN TAXES PAID BY IT THOUGH THE ASSESSEE HAD FI LED CERTIFICATE FROM BANK FOR HAVING DEPOSITED THE TAX. HE ALSO SUBMITTED THAT THE ASSE SSEE HAD FILED APPLICATION AGAINST NOT GRANTING CREDIT BEFORE CIT-I, NEW DELHI AND CIT, CE NTRAL. CIRCLE III, BUT NO ACTION HAS BEEN TAKEN BY THEM. THEREFORE, THE ASSESSEE HAD NO ALTERNATIVE BUT TO FILE APPEAL AGAINST THE ORDER GIVING EFFECT TO ORDER PASSED U/S 254(2) OF THE ACT. 6. ON THE OTHER HAND, LD. SR. D.R. VEHEMENTLY SUBM ITTED THAT THE APPEAL IS NOT MAINTAINABLE AND CIT(A) HAS RIGHTLY DISMISSED THE A PPEAL. 7. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. THE ITAT VIDE ORDER DATED 12.11.2002 HAS QUASHED TH E LEVY OF INTEREST U/S 234B OF THE ACT. THE AO VIDE HIS ORDER DATED 19.11.2007 WHILE GIVING EFFECT TO DIRECTIONS CONTAINED IN ORDER U/S 254(1) DATED 12.11.2002 DELETED THE LE VY OF INTEREST U/S 234B OF THE ACT. THEREFORE, THE COMPLIANCE OF THE ORDER PASSED BY TH E TRIBUNAL HAS BEEN DONE BY THE AO IN TOTO AND NO ISSUE ARISING OUT OF ORDER OF TRIBUN AL PASSED U/S 254(1) DATED 12.11.2002 REMAINED TO BE UN-COMPLIED WITH. THE QUANTIFICATI ON OF INCOME AND DETERMINATION OF TAX LIABILITY BECAME FINAL VIDE ORDER DATED 12.11.2002 WHEN THE ITAT FINALLY QUASHED THE LEVY OF INTEREST U/S 234B OF THE ACT. HENCE AFTER A SSESSING OFFICER HAS GIVEN APPEAL EFFECT TO THE ORDER OF ITAT NO FURTHER CAUSE OF ACTION AR ISES WHICH COULD BE AGITATED IN APPEAL BEFORE CIT(A)/ITAT. 8. ONCE THE QUANTIFICATION OF INCOME IS DETERMINED, THE AO IS BOUND TO CALCULATE TAX AND INTEREST INCLUDING INTEREST U/S 220(2) OF THE A CT. THE CHARGING OF INTEREST U/S 220(2) IS MANDATORY AND THE ASSESSEE HAS TO COMPENSATE BY WAY OF INTEREST FOR THE PERIOD DURING I.T.A. NO.895/DEL./2009 (A.Y. : 1992-93) 5 WHICH DEMAND REMAINED OUTSTANDING. IF THE ASSESSEE IS NOT ABLE TO PRODUCE SUFFICIENT EVIDENCE FOR PAYMENT OF TAXES, THE ASSESSEE CANNOT MAKE A PLEA THAT ISSUE IS INCIDENTAL TO THE ISSUE DECIDED BY THE TRIBUNAL U/S 254 OF THE AC T. U/S 246A OF THE I.T. ACT, 1961, THE ORDER CHARGING INTEREST U/S 220(2) IS NOT APPEALABL E. HAVING WITHDRAWN THE GROUND BEFORE CIT(A), IT IS SURPRISING THAT THE ASSESSEE HAD TAKE N A CHANCE AGAIN BEFORE THIS TRIBUNAL BY WAY OF APPEAL ALLEGING THAT CIT(A) HAD NOT DECIDED THE ISSUE AS PER LAW. HONBLE SUPREME COURT IN THE CASE OF CENTRAL PROVINCE MANGA NESE ORE CO. LTD. VS. CIT, 160 I.T.R. 961 HAS HELD THAT AN ORDER LEVYING INTEREST IS NOT APPEALABLE UNLESS LEVY OF INTEREST IS A PART OF PROCESS OF ASSESSMENT. IN SUCH A SITUA TION IT IS OPEN TO AN ASSESSEE TO DISPUTE THE LEVY OF INTEREST PROVIDED HE LIMITS HIMSELF TO THE GROUND THAT HE IS NOT LIABLE TO LEVY AT ALL. CHARGING OF INTEREST U/S 220(2) IS NOT PART O F PROCESS OF ASSESSMENT. INTEREST U/S 220(2) IS LEVIED IN A CASE WHERE ASSESSEE BECOMES A DEFAULTER IN RESPECT OF THE TAX WHICH HAS BEEN DETERMINED. SINCE THE INCOME TAX ACT, 1961 DOES NOT PROVIDE ANY APPEAL AGAINST LEVY OF INTEREST U/S 220(2), THE APPEAL FIL ED BY THE ASSESSEE HAS BEEN RIGHTLY TREATED BY CIT(A) AS NOT MAINTAINABLE UNDER SECTION 246A OF THE ACT. 9. BEFORE PARTING WITH THE ISSUE WE MAY LIKE TO MEN TION THAT IF THE ASSESSEE HAD DIFFICULTY IN GETTING THE CREDIT OF TAX ALREADY PAI D, IF ANY, HE COULD HAVE APPROACHED/CAN APPROACH THE CONCERNED CCIT, CBDT OR OMBUDSMAN FOR REDRESSAL OF HIS GRIEVANCE INSTEAD OF FILING APPEAL BEFORE THIS TRIBUNAL. 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON : 31.05.2011 . SD/- SD/- (R.P. TOLANI) (K.D. RANJAN) JUDCIAL MEMBER ACCOUNTANT MEMBER DATED: 31.5.2011 SKB I.T.A. NO.895/DEL./2009 (A.Y. : 1992-93) 6 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A)-III, NEW DELHI. 5. DR DEPUTY REGISTRAR