ACIT, New Delhi V. Shri Akhil Jain, Delhi

ITSSA 26/DEL/2013

• Counselvise Citation: [2015] 122 COUNSELVISE.COM (IT) 0808 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 7 month(s) 3 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 12-06-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 10-06-2015
• Assessment Year: misc
• Appeal Filed On: 08-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANURADHA MISHRA
• Keywords: Block assessment
• Section: 234B; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH A : NEW DELHI) BEFORE SHRI N.K. SAINI, ACCOUNTANT MEMBER AND SHRI GEORGE GEORGE K, JUDICIAL MEMBER IT(SS)A NO.26/DEL./2013 (BLOCK PERIOD : 1996-97 TO 2002-03) ACIT, CIRCLE 39 (1), VS. SHRI AKHIL JAIN, NEW DELHI. 4561, DEPUTY GANJ, SADAR BAZAR, DELHI 110 006. (PAN : AAAPJ1985H) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SUNIL MATHUR, AR REVENUE BY : SMT. ANURADHA MISHRA, CIT DR DATE OF HEARING : 10.06.2015 DATE OF PRONOUNCEMENT : 12.06.2015 O R D E R PER GEORGE GEORGE K. : THIS APPEAL, AT THE INSTANCE OF THE REVENUE, IS DIR ECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX-II, NEW DEL HI DATED 19.07.2013, PERTAINING TO THE BLOCK PERIOD 1996-97 TO 05.02.200 2. 2. THE SOLITARY EFFECTIVE GROUND RAISED READS AS UN DER :- THE LD. CIT (APPEAL) HAS ERRED IN DELETING THE CHA RGING OF INTEREST U/S 234B OF THE INCOME-TAX ACT, 1961 IG NORING THE FACT THAT THE HONBLE SETTLEMENT COMMISSION WHI LE PASSING ORDER U/S 245D (4) HAD ORDERED THAT THE INT EREST CHARGEABLE U/S 234B WILL BE CHARGED UPTO THE DATE O F ORDER U/S 245D (1). IT(SS)A NO.26/DEL./2013 2 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE AS FOL LOWS. FOR THE BLOCK PERIOD 1996-97 TO 05.02.2002, THE SE TTLEMENT COMMISSION PASSED AN ORDER DATED 31.03.2011 U/S 245 D (4). THE ASSESSING OFFICER PASSED AN ORDER U/S 158BC / 245D (4) ON 04.05.2011 DETERMINING INCOME AT RS.8,21,000/- AND RAISED A DE MAND OF RS.60,548/-. THE DEMAND RAISED WAS DULY PAID BY THE ASSESSEE. SUBSEQUENTLY, A NOTICE U/S 154 WAS ISSUED TO THE ASSESSEE PROPOSING TO CHA RGE INTEREST U/S 234B OF THE ACT. IN RESPONSE TO THE NOTICE U/S 154, THE AS SESSEE FILED ITS REPLY DATED 09.01.2013. IT WAS SUBMITTED THAT THERE WAS NO MIS TAKE APPARENT FROM THE RECORD WITHIN THE MEANING OF SECTION 154 OF THE ACT AND ALSO CONTENDED THAT INTEREST U/S 234B IS NOT CHARGEABLE IN RESPECT OF INCOME DETERMINED IN THE BLOCK ASSESSMENT. THE ASSESSING OFFICERS ATTE NTION WAS SPECIFICALLY DRAWN TO THE PROVISIONS OF SECTION 158BF OF THE ACT. 4. THE ASSESSING OFFICER, HOWEVER, REJECTED THE CON TENTIONS RAISED BY THE ASSESSEE AND PASSED AN ORDER U/S 154/158BC/245D (4) OF THE ACT (ORDER DATED 24.02.2013) RAISING A DEMAND U/S 234B OF THE ACT AMOUNTING TO RS.7,88,252/-. THE ASSESSING OFFICER HAD CHARGED T HE INTEREST RELYING ON THE JUDGMENT OF HONBLE APEX COURT IN THE CASE OF C IT VS. HINDUSTAN BULK CARRIERS AND SECTION 234B (4) OF THE ACT. 5. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL TO T HE FIRST APPELLATE AUTHORITY. THE CIT (A) HELD THAT INTEREST U/S 234B OF THE ACT CANNOT BE IT(SS)A NO.26/DEL./2013 3 LEVIED IN BLOCK ASSESSMENT BY PLACING REFERENCE ON THE PROVISIONS OF SECTION 158BF OF THE ACT. THE RELEVANT FINDING OF THE CIT (A) READS AS FOLLOWS : 5.1. IT IS A FACT THAT THE ASSESSMENT IN THIS CASE WAS PASSED U/S 158BC, WHICH LAYS DOWN SPECIAL PROCEDURE FOR BL OCK ASSESSMENT OF SEARCH CASES IN CHAPTER XIVB OF THE I NCOME- TAX ACT. SECTION 158BF, ALSO A PART OF CHAPTER XIVB , LAYS DOWN THAT 'NO INTEREST' UNDER THE PROVISIONS OF SEC TION 234A, 234B OR 234C OR PENALTY U/S 271(1)(C), 271A, 271B, 'SHALL BE LEVIED OR IMPOSED UPON THE ASSESSEE IN RE SPECT OF THE UNDISCLOSED INCOME DETERMINED IN THE BLOCK ASSESSMENT'. THE LEVY OF INTEREST AND PENALTY IN CA SES ASSESSED UNDER CHAPTER XIVB ARE STRICTLY GUIDED BY THE PROVISIONS OF SECTION 158BFA. UNDER THESE CIRCUMSTA NCES THE AO COULD NOT HAVE IMPOSED INTEREST U/S 234B IN THE CASE AT HAND. 5.2. THE REFERENCE BY THE AO TO THE CASE OF HINDUS TAN BULK CARRIERS (SUPRA) IS MISPLACED SINCE IN THAT CA SE BLOCK ASSESSMENT WAS NOT INVOLVED. IN ANY CASE THIS DECIS ION WAS DISAPPROVED BY A FIVE MEMBER BENCH IN THE CASE OF B RIJ LAL V CIT 194 TAXMAN 566 (SC). IN BRIJ LAL (SUPRA) SECT ION 234A, 234B AND 234C WERE HELD TO BE APPLICABLE TO PROCEEDING OF SETTLEMENT COMMISSION UPTO THE STAGE OF 245D(1) AND NOT BEYOND THAT. BUT IN THIS CASE ALSO THE MATTER DID NOT REFER TO BLOCK ASSESSMENT UNDER CHAP TER XIVB. 5.3. THE REFERENCE BY THE AO TO 234B(4) IN SUPPOR T OF THE LEVY OF INTEREST U/S 234B IN THE INSTANT CASE, IS A LSO MISPLACED. THE PROVISIONS OF SECTION 234B(4), HAVE TO BE READ HARMONIOUSLY WITH SECTION 158BF, SUCH THAT ORD ERS OF THE SETTLEMENT COMMISSION U/S 245D(4) REFERRED IN S ECTION 234B(4) WOULD NECESSARILY EXCLUDE ORDERS RELATING T O BLOCK ASSESSMENT FALLING UNDER CHAPTER XIVB OF THE INCOME TAX ACT. 5.4. IN VIEW OF THE DISCUSSION ABOVE THE GROUNDS 2, 3 AND 4 OF THE APPEAL ARE ALLOWED. IT(SS)A NO.26/DEL./2013 4 6. THE REVENUE, BEING AGGRIEVED, IS IN APPEAL BEFOR E US. 7. THE LD. DR SUBMITTED THAT THE SETTLEMENT COMMISS ION HAS SPECIFICALLY DIRECTED TO LEVY INTEREST U/S 234B OF THE ACT UP TO THE DATE OF ORDER PASSED U/S 245D(1) OF THE ACT, THEREFORE, THE CIT (A) WAS NOT JUSTIFIED IN DELETING THE LEVY OF INTEREST U/S 234B OF THE ACT. 8. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE INCOME-TAX AUTHORITIES AND RELIED ON THE FINDINGS OF THE CIT (A). 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IN THE INSTANT CASE, THE ASSESSMENT WAS CO MPLETED UNDER CHAPTER XIV-B OF THE ACT U/S 158BC/245D (4) OF THE ACT. BY VIRTUE OF THE SPECIAL PROVISIONS OF SECTION 158BF OF THE ACT, NO INTEREST U/S 234B OF THE ACT IS CHARGEABLE ON THE AMOUNT OF UNDISCLOSED INCOME. TH E PROVISIONS OF SECTION 158BF FOR READY REFERENCE IS REPRODUCED BEL OW : NO INTEREST UNDER THE PROVISIONS OF SECTION 234A, 234B OR 234C OR PENALTY UNDER THE PROVISIONS OF CLAUSE (C) OF SUB- SECTION (1) OF SECTION 271 OR SECTION 271A OR SECTI ON 271B SHALL BE LEVIED OR IMPOSED UPON THE ASSESSEE IN RES PECT OF THE UNDISCLOSED INCOME DETERMINED IN THE BLOCK ASSESSMENTS. WHEN CHARGING OF INTEREST U/S 234B OF THE ACT IS NO T PERMISSIBLE IN THE CASES OF BLOCK ASSESSMENT UNDER CHAPTER XIV-B OF TH E ACT, BY VIRTUE OF SECTION 158BF, THE ASSESSING OFFICER HAD WRONGLY CH ARGED INTEREST U/S 234B OF THE ACT. THE NON-LEVY OF INTEREST U/S 234B OF THE ACT, IN THE ORIGINAL ORDER OF THE ASSESSING OFFICER DATED 04.05 .2011, CANNOT BE STATED IT(SS)A NO.26/DEL./2013 5 TO BE A MISTAKE APPARENT ON RECORD WARRANTING RECTI FICATION U/S 154 OF THE ACT. THEREFORE, THE CIT (A) IS JUSTIFIED IN QUASH ING THE ORDER PASSED BY THE ASSESSING OFFICER U/S 154 OF THE ACT. IT IS OR DERED ACCORDINGLY. 10. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THIS 12 TH DAY OF JUNE, 2015. SD/- SD/- (N.K. SAINI) (GEORGE GEORGE K) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 12 TH DAY OF JUNE, 2015 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-II, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.