Madhushree Gupta, New Delhi V. ITO, New Delhi

ITA 941/DEL/2011

• Counselvise Citation: 94120114 RSA 2011
• Duration Of Justice: 7 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-10-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Next Hearing Date: 10-10-2011
• Assessment Year: 2002-2003
• Appeal Filed On: 18-02-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R S NEGI
• Assessee Lawyers: SANJEEV MEHRA
• Section: 143(3); 234B; 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E DELHI BEFORE SHRI RAJPAL YADAV AND SHRI K.G. BANSAL ITA NO. 941(DEL)/2011 ASSESSMENT YEAR: 2002-03 MADHUSHREE GUPTA, INCOME- TAX OFFICER, D-65, EAST OF KAILASH, VS. WARD 14( 1), NEW DELHI. NEW DELHI-65. PAN: AAFPG2311K (APPELLANT) (RESPON DENT) APPELLANT BY : SHRI SANJEEV MEHRA, C.A. RESPONDENT BY: SH RI R.S. NEGI, SR. DR DATE OF HEARING : 10.10.2011 DATE OF PRONOUNCEMENT: 14 .10.2011. ORDER PER K.G. BANSAL : AM IN THIS CASE, THE ASSESSEE HAS TAKEN UP THREE GRO UNDS, WHICH DEAL WITH THE VALIDITY OF THE NOTICE ISSUED U/S 148, AND THE CHARGING OF INTEREST U/S 234B OF THE INCOME-TAX ACT, 1961. IN REGARD TO THE VALIDITY OF NOTICE U/S 148, IT IS MENTIONED THAT THE LD. CIT(APPEALS) ERRED IN HOLDING THAT NO APPEAL WAS FILED BY THE ASSESSEE FOR ASSESSMENT YEAR 2001-02. 2. IN REGARD TO THE FIRST MENTIONED DISPUTE, THE LD. AR EXPLAINED THAT IN THE PROCEEDINGS FOR ASSESSMENT YEAR 2001-02, BE ING THE IMMEDIATELY PRECEDING YEAR, THE ASSESSEE HAD CLAIMED LOSS OF ABOUT RS. 83.00 LAKH. ITA NO. 941(DEL)/2011 2 THIS RETURN WAS ACCEPTED U/S 143(1). SUBSEQUENTLY , THE ASSESSMENT WAS MADE U/S 143(3) ON 20.2.2004, IN WHICH THE INCOM E WAS ASSESSED AT NIL. THIS ORDER WAS SUBJECT MATTER OF APPEAL AND THE C IT(APPEALS) PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. THE PROCEEDING S FOR THIS YEAR WERE ALSO COMPLETED U/S 143(1) AND THE LOSS CLAIMED I N THE RETURN FOR ASSESSMENT YEAR 2001-02 WAS ALLOWED. HOWEVER, ON ACCOUNT OF ASSESSMENT MADE U/S 143(3) FOR ASSESSMENT YEAR 2 001-02, ASSESSING THE INCOME AT NIL, THE INSTANT ASSESSMENT HAS BEEN MA DE U/S 147 IN DECEMBER, 2009. IN THIS ASSESSMENT, THE BENEFIT OF BROUGH T FORWARD LOSS FROM ASSESSMENT YEAR 2001-02 HAS NOT BEEN ALLOWED. THE LD. CIT(APPEALS) HAS UPHELD THE ACTION OF THE AO BY MENTIONING THAT T HE AO HAS FURNISHED A CATEGORICAL FINDING THAT NO APPEAL HAS BEEN FILED AGAINST THE ORDER FOR ASSESSMENT YEAR 2001-02. THERE IS AN ERROR IN T HIS PART OF THE ORDER OF THE LD. CIT(A). THE ASSESSEE HAD FILED THE APPEAL FOR THAT YEAR, WHICH HAD BEEN DECIDED BY THE LD. CIT(A) ON 08.02.2011. THE LD. CIT(A) HAD PARTLY ALLOWED THE RELIEF. THEREFORE, THE ASSESS EE IS ENTITLED TO THE DEDUCTION OF BROUGHT FORWARD LOSS. COMING TO TH E SECOND MENTIONED ISSUE, IT IS EXPLAINED THAT WHEN THE RETURN OF INCOME WAS FILED, THERE WAS NO LIABILITY TO PAY ADVANCE-TAX. THEREFORE, INTERES T U/S 234B IS NOT ITA NO. 941(DEL)/2011 3 CHARGEABLE. IN REGARD TO REOPENING THE ASSESSMEN T, IT IS SUBMITTED THAT NO VALID REASON HAS BEEN RECORDED BY THE AO. 3. ON THE OTHER HAND, THE LD. SR. DR SUBMITTED THAT THE ASSESSEE HAD CLAIMED EXCESSIVE DEDUCTION OR ALLOWANCE ON ACCOU NT OF BROUGHT FORWARD LOSS FROM ASSESSMENT YEAR 2001-02. THEREFORE, THE INCOME HAD ESCAPED ASSESSMENT IN VIEW OF THE PROVISION CONTAINED IN CLAUSE (B) OF THE EXPLANATION-2 OF SECTION 147. THEREFORE, THE NOTICE U/S 148 HAD BEEN ISSUED BY THE AO VALIDLY. WHILE HE HAD NO OBJE CTION FOR THE GRANT OF BROUGHT FORWARD LOSS FROM ASSESSMENT YEAR 2001 -02 AS DETERMINED AS PER THE ORDER OF THE LD. CIT(A) FOR ASSESSMENT Y EAR 2001-02, IT HAS BEEN VEHEMENTLY ARGUED THAT INTEREST U/S 234B IS CHA RGEABLE AS IT IS COMPENSATORY IN NATURE. IN THIS VERY CONNECTION, T HE DECISION OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF SRI VIJAY KU MAR SAGOO (HUF) VS. ACIT, (2011) 201 TAXMAN 366 WAS ALSO DISCUSSED. 4. WE HAVE CONSIDERED THE FACTS OF THE CASE AND SUBMISSIONS MADE BEFORE US. IN SO FAR AS VALIDITY OF NOTICE U/S 148 IS CONCERNED, IT IS CLEAR FROM THE FACTS NARRATED ABOVE THAT THE ASSESSEE CLAIMED EXCESS DEDUCTION OF BROUGHT FORWARD LOSS FROM ASSESSMENT YEAR 2 001-02. THEREFORE, THE ITA NO. 941(DEL)/2011 4 INCOME HAD ESCAPED ASSESSMENT BY DINT OF THE PROV ISION REFERRED TO ABOVE. ACCORDINGLY, IT IS HELD THAT THERE IS NO INFIRMITY IN THE ISSUANCE OF NOTICE U/S 148. 4.1 COMING TO THE DETERMINATION OF QUANTUM, IT I S AXIOMATIC THAT THE LOSS DETERMINED AS PER ORDER OF THE LD. CIT(APPE ALS), WHICH IS THE ORDER HOLDING FIELDING AT THE MOMENT, HAS TO BE ALLOW ED. THIS WILL BE EQUALLY TRUE FOR COMPUTING THE ASSESSED TAX AS DEFINE D UNDER EXPLANATION-1 TO SECTION 234B. AS MENTIONED EARLIER, THE ISSUE H AS BEEN DISCUSSED IN THE CASE OF SRI VIJAY KUMAR SAGOO (SUPRA), IN WHICH IT HAS BEEN HELD THAT WHERE ASSESSMENT IS FRAMED FOR THE FIRST TIME U/S 147, IT HAS TO BE ASCERTAINED WHETHER THERE HAD BEEN PRIOR DETER MINATION OF TAX U/S 143(1) OR SECTION 143(3). IF THERE HAS BEEN S UCH DETERMINATION, THE INTEREST IS CHARGEABLE FROM THE DATE ON WHICH SU CH DETERMINATION WAS MADE UP TO THE DATE OF MAKING ASSESSMENT U/S 147 . IN THIS CASE, THERE HAD BEEN DETERMINATION OF TAX U/S 143(1), HOWEVER, THE DATE OF PROCESSING OF THE RETURN HAS NOT BEEN FURNISHED BY THE LD. AR. THIS MAY BE ASCERTAINED BY THE AO FROM THE RECORD. FOLLOWING THE DECIS ION, IT IS HELD THAT INTEREST U/S 234B IS LEVIABLE FROM THE DATE NEXT FOLLOWING T HE DATE OF ASCERTAINMENT OF TAX U/S 143(1) TO THE DATE OF MAKING ASSESS MENT U/S 147. IN SO FAR ITA NO. 941(DEL)/2011 5 AS THE SUBMISSION THAT INTEREST IS NOT CHARGEA BLE AT ALL IS CONCERNED, WE A RE NOT IN AGREEMENT WITH THE LD. COUNSEL FOR TH E REASON THAT INTEREST IS ONLY COMPENSATORY IN NATURE. ACCORDINGLY, THE REL EVANT GROUND IS PARTLY ALLOWED. 5. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED. SD/- SD/- (RAJPAL YADAV) (K.G.BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER SP SATIA COPY OF THE ORDER FORWARDED TO:- MADHUSHREE GUPTA, NEW DELHI. ITO, WARD 14(1), NEW DELHI. CIT(A) CIT THE DR, ITAT, NEW DELHI. ASSISTANT REGISTRAR.