M/S. VHCPL ADCC PINGLAI INFRASTRUCTURE PVT. LTD., Nagpur V. THE ITO, WARD- 1(4), Nagpur

ITA 92/NAG/2015

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7582 (ITAT-NAGPUR)
• Duration Of Justice: 3 year(s) 1 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-05-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 19-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R K BARAL
• Keywords: Reason to believe
• Section: 143(3); 234B; 115JB; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH, NAGPUR BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI RAM LAL NEGI, JUDICIAL MEMBER ITA NO.92/NAG./2015 ( ASSESSMENT YEAR : 200708 ) M/S. VHCPL ADCC PINGLAI INFRASTRUCTURE PVT. LTD. DHARAMPETH, NAGPUR PAN AABCV8484D APPELLANT V/S INCOME TAX OFFICER WARD1(4), NAGPUR .... RESPONDENT ASSESSEE BY : SHRI K.P. DEWANI REVENUE BY : SHRI R.K. BARAL DATE OF HEARING 08.05.2018 DATE OF ORDER 09.05 .2018 O R D E R PER SHAMIM YAHYA, A.M. THE AFORESAID APPEAL AT THE INSTANCE OF THE ASSESSE E IS AGAINST THE IMPUGNED ORDER DATED 5 TH FEBRUARY 2015, PASSED BY THE LEARNED COMMISSIONER (APPEALS)I, NAGPUR, PERTAINING TO ASS ESSMENT YEAR 200708. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE REPRODUCED B ELOW: 1. THE ORDER PASSED BY A.O. UNDER SECTION 143(3) O F I.T. ACT 1961 IS ILLEGAL, INVALID AND BAD IN LAW AND THE ID. CIT(A) ERRED IN CONFIRMING THE SAME. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE ID. CIT(A) ERRED IN CONFIRMING THE INTEREST CHA RGED BY AC. 2 M/S. VHCPL ADCC PINGLAI INFRASTRUCTURE PVT. LTD. UNDER SECTIONS 234B AND 2340 OF L.T. ACT 1961. WITH OUT PREJUDICE THE LEVY OF INTEREST U/S 234B AND 2340 OF I.T. ACT 1961 IS UNJUSTIFIED, UNWARRANTED AND EXCESSIVE. 3. THE ID. LOWER AUTHORITIES OUGHT TO HAVE HELD THA T THERE IS NO ADVANCE TAX LIABILITY AND NO INTEREST U/S 234B AND 2340 OF I.T. ACT 1961 IS CHARGEABLE IN RESPECT OF INCOME CHARGEABLE TO TAX U/S 11 5J OF IT. ACT 1961. 2. IN THIS CASE, THE ONLY ISSUE IN DISPUTE RELATES TO LIABILITY TO PAY ADVANCE TAX AND INTEREST UNDER SECTION 234B AND 234C OF THE ACT IN CASE OF INCOME CHARGEABLE TO TAX UNDER SECTION 115J B OF THE ACT. 3. THE ASSESSMENT YEAR IN THIS CASE IS A.Y. 200708. T HE LEARNED CIT(A) HAD DECIDED THIS ISSUE AGAINST THE ASSESSEE BY PLACING RELIANCE ON THE SUBSEQUENT DECISION OF THE HONBLE SUPREME C OURT IN JCIT V/S ROLTA INDIA LTD., [2011] 330 ITR 470 (SC). AGAINST THIS ORDER, THE ASSESSEES PROPOSITION IS THAT PRIOR TO RENDERING O F THIS DECISION OF THE HONBLE SUPREME COURT, THE APEX COURT DECISION IN K WALITY BISCUITS WAS HOLDING THE FIELD. IN VIEW OF THE SAID DECISION , NO ADVANCE TAX WAS PAYABLE UNDER MAT COMPUTED UNDER SECTION 115JB OF TH E ACT FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. IN THIS REGARD , THE SUBMISSIONS OF THE LEARNED COUNSEL FOR ASSESSEE MAY BE GAINFULL Y REFERRED TO AS UNDER: ASSESSMENT YEAR UNDER CONSIDERATION IS 2007-08 PRE VIOUS YEAR END ON 31/03/2007 ADVANCE TAX WAS REQUIRED TO BE PA ID IN FINANCIAL YEAR 2006-07 AND 1 S INSTALLMENT WAS DUE ON 15/09/2006. AS ON DATE THE ADVANCE TAX WAS PAYABLE IN TERMS OF DECISION OF HON'BLE APEX COURT IN THE CASE OF KWALITY BISCUITS LTD. RENDERED ON 26/04/2006. NO ADVANCE TAX WAS PAYABLE ON MAT COMPU TED U/S 115JB FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. 3 M/S. VHCPL ADCC PINGLAI INFRASTRUCTURE PVT. LTD. FOR THE ASSESSMENT YEAR UNDER CONSIDERATION I.E. AS STT YEAR 2007- 08 THE JUDGEMENT OF HON'BLE SUPREME COURT IN CASE O F CIT VS. KWALITY BISCUITS LTD. DATED 26/04/2006 WAS THE LAW OF THE LAND ON THIS ISSUE. THUS LEVY OF INTEREST U/S 234B AND 234C OF I.T. ACT 1961 IS UNJUSTIFIED. DECISION IN THE CASE OF JCIT VS. ROLTA INDIA LTD. W AS DELIVERED BY SUPREME COURT SUBSEQUENT ON 11/01/2001 I.E AFTER TH E END OF FINANCIAL YEAR UNDER CONSIDERATION. THUS, LAW LAID DOWN BY ROLTA INDIA LTD. NOT APPLICABLE FOR THE YEAR UNDER CONSID ERATION. LEVY OF INTEREST IS UNJUSTIFIED. RELIANCE ON : I) CHARBHUJA INDUSTRIES PVT. LTD. VS ACIT, [2014] 31 I TR (TRIB.) 89 (MUM.); II) M/.S ROCKLINE DEVELOPERS PVT. LTD., ITA NO.6595/ MUM./2014, ORDER DATED 01.01.2016; III) CIT V/S KWALITY BISCUITS LTD., [2006] 284 ITR 434 (BOM.); IV) CIT V/S JSW ENERGY LTD., [2015] 379 ITR 36 (BOM.); V) CIT V/S NATURAL GEMS LTD., [2010] 327 ITR 269 (BOM.) ; VI) SNOWCEM INDIA LTD. V/S CIT, [2009] 313 ITR 170 (BOM.). 4. PERCONTRA, THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 5. UPON CAREFUL CONSIDERATION, WE NOTE THAT THE COORDI NATE BENCH OF THE TRIBUNAL IN CHARBHUJA INDUSTRIES PVT. LTD. V S ACIT, [2014] 31 ITR (TRIB.) 89 (MUM.) HAS TAKEN NOTE OF THE DECISIO N OF THE HON'BLE SUPREME COURT ROLTA INDIA LTD. (SUPRA) IN THIS REGA RD AND HAS HELD AS UNDER:- 4 M/S. VHCPL ADCC PINGLAI INFRASTRUCTURE PVT. LTD. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WEL L AS RELEVANT MATERIAL ON RECORD. THERE IS NO DISPUTE REGARDING T HE FACT THAT DURING THE ASSESSMENT YEARS UNDER CONSIDERATION THE SETTLED LAW ON THE POINT WAS THE DECISION OF THE HONBLE SUPREME C OURT IN CASE OF CIT VS KWALITY BISCUITS LTD. 284 ITR 434 AS WELL AS A NUMBER OF OTHER DECISIONS INCLUDING DECISIONS OF HONBLE JURI SDICTIONAL HIGH COURT IN CASE OF SNOWCEM INDIA LTD. VS DCIT 313 ITR 170 AND IN CASE OF CIT VS NATURAL GEMS LTD. 327 ITR 269 WHEREI N IT HAS BEEN HELD THAT NO ADVANCE MAT WAS PAYABLE BY THE COMPANY . THEREFORE, THE ASSESSEE HAD NO REASON TO BELIEF OR FORESEE A S UBSEQUENT DECISION FASTENING THE LIABILITY OF PAYMENT OF ADVA NCE TAX. EVEN OTHERWISE THE DECISION IN CASE OF JCIT VS ROLTA IND IA LTD. (SUPRA) IS A SUBSEQUENT DECISION AND THEREFORE, THE IMPOSSIBIL ITIES AT THE RELEVANT POINT OF TIME CANNOT BE THRASHED UPON THE ASSESSEE. IN THE FACTS AND CIRCUMSTANCES AS DISCUSSED ABOVE NO F AULT CAN BE FOUND WITH THE ASSESSEE IN NOT DEPOSITING THE ADVAN CE TAX OF MAT IN VIEW OF THE DECISION OF THE HONBLE SUPREME COUR T AS WELL AS VARIOUS DECISIONS OF THE HONBLE HIGHCOURT. THE ASS ESSEE HAD THE BONAFIDE REASON TO BELIEVE THAT ADVANCE TAX WAS NOT PAYABLE IN RESPECT OF MAT U/S 115JB AS IT WAS SETTLED LAW LAID DOWN BY THE HONBLE SUPREME COURT AND HONBLE HIGH COURT WHICH HOLD GOOD TILL THE SUBSEQUENT DECISION OF HONBLE SUPREME COURT IN CASE OF JCIT VS ROLTA INDIA LTD. (SUPRA). THEREFORE, PRIOR TO TH E DECISION OF HONBLE SUPREME COURT IN CASE OF JCIT V/S ROLTA IND IA LTD. (SUPRA) SETTLED PROPOSITION OF THE LAW ON THE POINT WAS THA T NO ADVANCE TAX WAS PAYABLE ON MAT COMPUTED UNDER SECTION 115JB AND ACCORDINGLY, THE INTEREST U/S 234B AND 234C CANNOT BE LEVIED FOR NONDEPOSIT OF ADVANCE TAX ON MAT FOR THE YEAR UNDE R CONSIDERATION. HENCE, WE DELETE THE LEVY OF INTERES T U/S 234B AND 234C IN THIS CASE. 6. FROM THE ABOVE, IT IS EVIDENT THAT THE COORDINATE BENCH OF THE TRIBUNAL HAD HELD THAT THE ASSESSEE WAS NOT LIABLE TO PAY ADVANCE TAX IN THE CASE OF MAT COMPUTED UNDER SECTION 115JB OF T HE ACT FOR THE PERIOD PRIOR TO THE JUDGMENT OF THE HONBLE SUPREME COURT IN ROLTA INDIA LTD. (SUPRA). ADMITTEDLY, THE ASSESSMENT YEAR IN DISPUTE IN CASE OF ASSESSEE IS PRIOR TO RENDERING OF THE SAID DECIS ION OF THE HONBLE SUPREME COURT. ACCORDINGLY, RESPECTFULLY FOLLOWING THE PRECEDENT FROM 5 M/S. VHCPL ADCC PINGLAI INFRASTRUCTURE PVT. LTD. THE DECISION AS AFORESAID, WE SET ASIDE THE IMPUGNE D ORDER PASSED BY THE LEARNED CIT(A) BY ALLOWING THE GROUND RAISED BY THE ASSESSEE. 7. IN THE RESULT, ASSESSEES APPEAL STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 09.05.2018 SD / - RAM LAL NEGI JUDICIAL MEMBER SD/ - SHAMIM YAHYA ACCOUNTANT MEMBER NAGPUR, DATED: 09.05.2018 COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE; (2) THE REVENUE; (3) THE CIT(A); (4) THE CIT, NAGPUR CITY CONCERNED; (5) THE DR, ITAT, NAGPUR; (6) GUARD FILE. TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY (SR. P.S./P.S.) ITAT, NAGPUR