ADITYA BIRLA NUVO LTD ( FORMELRY INDIAN RAYON AND INDUSTRIES LTD, MUMBAI V. DCIT RG 3(2), MUMBAI

ITA 992/MUM/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 3199 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 4 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 30-04-2015
• Assessment Year: 1994-1995
• Appeal Filed On: 05-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: MANISH V SHAH
• Section: 143(3); 244A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES A, MUMBAI BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER & SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ITA NO.992/MUM/2013 ASSESSMENT YEAR : 1994-95 ADITYA BIRLA NUVO LTD, (FORMERLY INDIAN RAYON & INDUSTRIES LTD.) A4 ADITYA BIRLA CENTRE, S K AHIRE MARG, WORLI MUMBAI 400 030 PAN AAACI1747H VS. DCIT RG 3(2), MUMBAI (APPELLANT) RESPONDENT) APPELLANT BY : SHRI MANISH V SHAH RESPONDENT BY : SHRI AARSI PRASAD DATE OF HEARING : 07 .0 6 .201 6 DATE OF PRONOUNCEMENT : 15 .0 6 . 201 6 O R D E R PER MAHAVIR SINGH, JUDICIAL MEMBER THIS APPEAL BY ASSESSEE IS ARISING OUT OF ORDER OF CIT(A) 24, MUMBAI, IN APPEAL NO.CIT(A)-LTU/ADDL.CIT RG.3(2)/176/11-12 DAT ED 19.12.2012. ASSESSMENT WAS FRAMED BY ACIT CEN CIR 5, MUMBAI, FOR A.Y. 1994 -95 VIDE HIS ORDER DATED 26.03.1997 U/S. 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). 2. THE ONLY ISSUE IN THIS APPEAL OF THE ASSESSEE IS AGAINST CHARGING OF INTEREST ON INTEREST WITHDRAWN U/S. 244 OF THE ACT. FOR THI S THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: ITA NO.992/MUM/2013 SHRI ADITYA BIRLA NUVO LTD. 2 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED DY. COMMISSIONER OF INCOME TAX 3(2) (HE REINAFTER REFERRED AS AO) HAS ERRED IN CHARGING INTEREST OF R S.2,30,153 ON INTEREST WITHDRAWN OF RS.5,02,110 ON SELF ASSESSMEN T TAX PAID BY THE APPELLANT AND LEARNED CIT(A) HAS ERRED IN CO NFIRMING THE ORDER OF THE LEARNED AO. THE LEARNED AO BE DIRECTE D TO WITHDRAW THE DEMAND OF RS.2,30,153/- AND TO REDUCE THE TOTAL DEMAND ACCORDINGLY. 3. AT THE OUTSET THE LEARNED COUNSEL FOR THE ASSESS EE STATED THAT THE AO HAS CHARGED INTEREST AMOUNTING TO RS.2,30,153 U/S. 234D OF THE ACT ON INTEREST WITHDRAWN U/S. 244A OF THE ACT. ACCORDING TO THE L EARNED COUNSEL THE RELEVANT ASSESSMENT YEAR INVOLVED IS 1994-95 AND ASSESSMENT WAS COMPLETED U/S. 143(3) OF THE ACT ON 26.03.1997. THIS ASSESSMENT WAS CHALLENG ED AND FINALLY THE TRIBUNAL DECIDED THE ISSUE AND THE AO WHILE GIVING APPEAL EF FECT TO THE TRIBUNAL ORDER DATED 26.10.2009, COMPUTED THE WITHDRAWAL OF INTEREST U/S . 244A OF THE ACT AT RS.5,02,110/- ON WHICH INTEREST WAS CHARGED AT RS.2 ,30,153/-. THE LEARNED COUNSEL FOR THE ASSESSEE, IN VIEW OF THE ABOVE FACTS, STATE D THAT APPLICABILITY OF THE PROVISIONS OF SECTION 234D OF THE ACT HAVE BEEN HEL D TO BE PROSPECTIVE AND NOT RETROSPECTIVE W.E.F. 01.06.2003 ONLY. THE LEARNED C OUNSEL EXPLAINED THAT THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE ENERG Y LTD. (2013) 358 ITR 371 (SC) HAS HELD THAT THE PROVISIONS OF SECTION 234D OF THE ACT WILL APPLY TO THE PENDING ASSESSMENTS, WHICH ARE PENDING AS ON 01.06.2003. T HE LEARNED COUNSEL FURTHER STATED THAT IN THE PRESENT CASE THE ASSESSMENT WAS COMPLETED ON 26.03.1997 AND NOTHING WAS PENDING. ON QUERY FROM THE BENCH, THE LEARNED SENIOR DR TOOK US THROUGH THE ORDER OF THE AO, COMPUTATION PART, WHER EIN THE AO GIVING APPEAL EFFECT TO THE ITAT ORDER DATED 26.10.2009 HAS COMPUTED THE INTEREST AND CREATED A DEMAND OF RS.2,30,153/-. HE REFERRED TO THE FOLLOW ING: ITA NO.992/MUM/2013 SHRI ADITYA BIRLA NUVO LTD. 3 244A AS PER ITN & 150A DATED 19.02.09 = 2,84,84,686 LESS: ON 14,34,678 1) 30.11.94 TO 30.02.97 @ 1% = 502110 (35M) INTEREST ON 5,02,110/- 2) 01.08.02 TO 07.09.03 @ 6.67% = 46886 (14M) 3) 01.10.03 TO 26.10.09 @ 5% = 183267 (73M) TOTAL = 732263 IN VIEW OF THE ABOVE CALCULATION IT WAS EXPLAINED T HAT THE INTEREST ON INTEREST WAS AMOUNTING TO RS. 2,30,153/-. THE LEARNED SENIOR DR STATED THAT THERE IS NO CHARG ING OF INTEREST U/S. 234D AND, HENCE, APPEAL ITSELF IS NOT MAINTAINABLE. ON FURTH ER QUERY, LEARNED COUNSEL FOR THE ASSESSEE EXPLAINED THAT THIS INTEREST CHARGED BY RE VENUE IS ON WITHDRAWAL OF INTEREST U/S. 244A OF THE ACT AMOUNTING TO RS.5,02,110/-, ON WHICH INTEREST U/S. 234D WAS COMPUTED. HE FURTHER ARGUED THAT IF THIS IS NOT IN TEREST U/S. 234D, IN THAT EVENTUALITY NO INTEREST CAN BE CHARGED ON INTEREST AND THIS LEVY ITSELF IS ILLEGAL AND WITHOUT ANY PROVISION. ACCORDING TO HIM, THIS SHOU LD BE DELETED. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND HAVE GON E THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT THE AO WHI LE GIVING APPEAL EFFECT TO THE ORDER OF THE TRIBUNAL DATED 26.10.2009 HAS CHARGED INTEREST AMOUNTING TO RS.2,30,153 ON WITHDRAWAL OF INTEREST U/S. 244A OF THE ACT AMOUNTING TO RS.5,02,110/- . THE AO HAS NOT CHARGED THIS INTERES T UNDER ANY OF THE PROVISIONS AS IS APPARENT. IN CASE, THIS IS INTEREST US/. 234D, SINCE ASSESSMENT WAS FRAMED ON ITA NO.992/MUM/2013 SHRI ADITYA BIRLA NUVO LTD. 4 26.03.1997 U/S. 143(3) OF THE ACT FOR THE RELEVANT A.Y. 1994-95, INTEREST U/S. 234D CANNOT BE CHARGED IN VIEW OF THE DECISION OF HONBL E SUPREME COURT IN THE CASE OF RELIANCE ENERGY LTD. (SUPRA), WHEREIN THIS PROVISIO N IS HELD TO BE PROSPECTIVE AND WILL APPLY ONLY TO PENDING ASSESSMENT, PENDING AS O N 01.06.2003. IN THIS CASE ASSESSMENT WAS COMPLETED PRIOR TO THIS DATE. HOWEV ER, IF THIS IS INTEREST ON INTEREST, EVEN THEN THIS LEVY IS WITHOUT ANY PROVIS IONS OF LAW AND CANNOT BE CHARGED. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES, WE DE LETED THE CHARGING OF INTEREST AND ALLOW THE APPEAL OF THE ASSESSEE. 5. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 1 5 TH JUNE 2016. SD/- SD/- (RAMIT KOCHAR) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED :15 TH JUNE, 2016. SA COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE C I T(A), MUMBAI. 4. THE C I T 5. THE DR, A BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, MUMBAI