DCIT, CHENNAI V. M/s. United India Insurance Co. Ltd., CHENNAI

ITA 914/CHNY/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 51801 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-08-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2001-2002
• Appeal Filed On: 18-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR I VIJAYAKUMAR
• Assessee Lawyers: G NARAYANASAMY

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, JUDICIAL MEMBER I.T.A. NO. 914/MDS/2011 (ASSESSMENT YEAR : 2001-02) THE DEPUTY COMMISSIONER OF INCOME TAX, LARGE TAXPAYER UNIT, CHENNAI 600 101. (APPELLANT) V. M/S UNITED INDIA INSURANCE CO. LTD., 24, WHITES ROAD, CHENNAI 600 014. PAN : AAACU5552C (RESPONDENT) APPELLANT BY : DR. I. VIJAYAKUMAR, CIT-DR RESPONDENT BY : SHRI G. NARAYANASAMY DATE OF HEARING : 11.08.2011 DATE OF PRONOUNCEMENT : O R D E R PER N.S. SAINI, ACCOUNTANT MEMBER : THIS APPEAL IS FILED BY REVENUE FOR THE ASSESSMENT YEAR 2001- 2002 AGAINST AN ORDER DATED 21.02.2011 OF COMMISSIO NER OF INCOME TAX (APPEALS), LARGE TAXPAYER UNIT, CHENNAI. I.T.A. NO. 914/MDS/11 2 2. THE SOLE GROUND OF APPEAL TAKEN BY THE REVENUE I N THIS APPEAL IS THAT THE LD. CIT(A) ERRED IN DELETING THE INTERE ST LEVIED U/S 234D OF THE INCOME-TAX ACT, 1961 [IN SHORT, THE ACT]. 3. IT IS OBSERVED FROM THE ORDER OF THE LD. CIT(A), THAT THE LD. CIT(A), FOLLOWING THE DECISION OF THE DELHI SPECIAL OF THE TRIBUNAL IN THE CASE OF ITO VS. EKTA PROMOTERS P. LTD. 113 ITR 719 [DEL](SB) WHEREIN IT WAS HELD THAT SINCE SECTION 234D OF THE ACT WAS INTRODUCED BY THE FINANCE ACT, 2003 W.E.F 1.6.2003, THEREFORE, PROVISIONS OF SECTION 234D WERE NOT APPLICABLE TO T HE PRESENT ASSESSMENT YEAR 2001-02 DELETED THE LEVY OF INTERES T U/S 234D OF THE ACT. THEREFORE, HE ALLOWED THE GROUND OF APPEA L OF THE ASSESSEE. 4. THE LD. D.R. SUBMITTED THAT THE HON'BLE KERALA H IGH COURT IN THE CASE OF CIT VS. KERALA CHEMICALS AND PROTEINS L TD 323 ITR 584 HAS HELD THAT INTEREST U/S 234D WAS CHARGEABLE FROM 1.6.2003 TILL THE COMPLETION OF REGULAR ASSESSMENT WHERE THE REFU ND GRANTED I.T.A. NO. 914/MDS/11 3 PRIOR TO 1.6.2003 WHILE SENDING INTIMATION U/S 143( 1) OF THE ACT AND REGULAR ASSESSMENT WAS COMPLETED CONVERTING REFUND INTO DEMAND OF TAX. THEREFORE, IT WAS HIS SUBMISSION THAT THE LD. CIT(A) FOLLOWING THE DECISION OF THE HON'BLE KERALA HIGH C OURT SHOULD HAVE HELD THAT INTEREST WAS CHARGEABLE FROM 1.6.2003. 5. ON THE OTHER HAND, THE LD. A.R. SUBMITTED THAT T HE HON'BLE DELHI HIGH COURT IN THE CASE OF DIRECTOR OF INCOME TAX VS. JACABS CIVIL INCORPORATED [2011] 330 ITR 578 HAS HELD THAT SECTION 234D WAS APPLICABLE ONLY FROM ASSESSMENT YEAR 2004-05 ONWARD S AND NOT IN THE EARLIER ASSESSMENT YEARS AND THEREFORE, NO INTE REST UNDER THAT PROVISION COULD BE LEVIED FOR THE PERIOD PRIOR TO T HE ASSESSMENT YEAR 2004-05. HE SUBMITTED THAT AS THERE ARE CONTR ARY DECISIONS ON THIS ISSUE OF DIFFERENT HIGH COURTS AND THERE IS NO DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT, THEREFORE, THE D ECISION WHICH IS FAVOURABLE TO THE ASSESSEE SHOULD BE FOLLOWED AND T HE APPEAL OF THE REVENUE SHOULD BE DISMISSED. I.T.A. NO. 914/MDS/11 4 6. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE FIND THAT THERE IS FORCE IN THE SUBMISSIONS OF THE LD. A.R. OF THE ASS ESSEE. IT IS NOT IN DISPUTE THAT THERE IS NO DECISION OF THE HON'BLE JU RISDICTIONAL HIGH COURT ON THE YEAR IN WHICH THE INTEREST U/S 234D WA S CHARGEABLE. WE FIND THAT THE HON'BLE KERALA HIGH COURT IN THE C ASE OF KERALA CHEMICALS AND PROTEINS LTD [SUPRA] HAS HELD THAT IN TEREST U/S 234D SHOULD BE CHARGED W.E.F 1.6.2003 WHEREAS THE HON'BL E DELHI HIGH COURT HAS HELD THAT INTEREST U/S 234D WAS CHARGEABL E FROM ASSESSMENT YEAR 2004-05 AND NOT IN EARLIER ASSESSME NT YEARS. THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. VEGETA BLE PRODUCTS LTD [1973] 88 ITR 192 [SC] HAS HELD THAT WHEN THERE ARE TWO VIEWS OF TWO DIFFERENT HIGH COURTS ON AN ISSUE, AND THERE IS NO DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT, THEN THE VIE W WHICH FAVOURS THE ASSESSEE MUST BE ADOPTED. THEREFORE, FOLLOWING THE DECISION OF THE HON'BLE SUPREME COURT WE HOLD THAT INTEREST U/S 234D IS CHARGEABLE FROM ASSESSMENT YEAR 2004-05 AND SUBSEQU ENT YEARS AND NOT IN THE EARLIER YEARS AND ACCORDINGLY DISMISS TH IS GROUND OF APPEAL OF THE REVENUE. I.T.A. NO. 914/MDS/11 5 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT AFTER CONCLUSION OF HEARING ON THE ELEVENTH DAY OF AUGUST, 2011. SD/- SD/- (GEORGE MATHAN) (N.S. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 11 TH AUGUST, 2011. VL COPY TO: (1) APPELLANT (2) RESPONDENT (3) CIT(A), LTU, CHENNAI (4) CIT, LTU, CHENNAI (5) D.R. (6) GUARD FILE