The Assistant Commissioner of Income Tax, Circle-2, RAJKOT-GUJARAT V. Shri Noorudin Nazarally Patel, RAJKOT-GUJARAT

ITSSA 26/RJT/2011

• Counselvise Citation: [2012] 121 COUNSELVISE.COM (IT) 8046 (ITAT-RAJKOT)
• Duration Of Justice: 5 month(s) 18 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 25-05-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 07-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MK SINGH
• Assessee Lawyers: J C RANPURA
• Keywords: Opportunity of being heard

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBULAL; RAJKOT BENCH, RAJKOT. . .. . . .. . , , , , . .. . . .. . , , , , $ $ $ $ BEFORE SHRI T. K. SHARMA, JM AND SHRI D. K. SRIVAST AVA, AM ITSS NO. 26 /RJT/2011. / ASSESSMENT YEARS BLOCK PERIOD 01-04-1991 TO 31-03-2000 & UP-TO 20-06-2000. ASSTT. CIT, CIRCLE-2, RAJKOT. ( */ APPELLANT) VS. SHRI NOORUDIN NAZARALLY PATEL, AROMA, 3, MARUTINAGAR, AERODROME ROAD, RAJKOT. PAN: ADDPP9771F. +,*/ RESPONDENT ITSS NO. 27 /RJT/2011. / ASSESSMENT YEARS BLOCK PERIOD 01-04-1991 TO 31-03-2000 & UP-TO 20-06-2000. ASSTT. CIT, CIRCLE-2, RAJKOT. ( */ APPELLANT) VS. SHRI SABBIR NAZARALLY PATEL, AROMA, 3, MARUTINAGAR, AERODROME ROAD, RAJKOT. PAN: ACIPP9610P. +,*/ RESPONDENT ITA NO. 28 /RJT/2011. / ASSESSMENT YEARS BLOCK PERIOD 01-04-1991 TO 31-03-2000 & UP-TO 20-06-2000. ASSTT. CIT, CIRCLE-2, RAJKOT. ( */ APPELLANT) VS. SHRI ASGARALLY NAZARALLY PATEL, AROMA, 3, MARUTINAGAR, AERODROME ROAD, RAJKOT. PAN: ACIPP9611N +,*/ RESPONDENT ITSS NO. 29 /RJT/2011. / ASSESSMENT YEARS BLOCK PERIOD 01-04-1991 TO 31-03-2000 & UP-TO 20-06-2000. ASSTT. CIT, CIRCLE-2, RAJKOT. ( */ APPELLANT) VS. SHRI MOHSIN NAZARALLY PATEL, AROMA, 3, MARUTINAGAR, AERODROME ROAD, RAJKOT. PAN: ADKPP0358D. +,*/ RESPONDENT ITA 26 TO 29/RJT/2011. 2 - / REVENUE BY SHRI. M. K. SINGH, D.R. /- / ASSESSEE BY SHRI J. C. RANPURA, C.A. - / DATE OF HEARING 21-05-2012 - / DATE OF PRONOUNCEMENT 25 - 05-2012 / / / / ORDER . .. . . . . . , , , , / T. K. SHARMA, J. M. THESE FOUR APPEALS BY THE REVENUE ARE AGAINST THE SEPARATE ORDERS OF LD. CIT( A)-III, RAJKOT ALL DATED 29-09- 2011 FOR THE BLOCK PERIOD 01-04-1991 TO 31-03-200 0 & UP-TO 20-06-2000. ALL THESE APPEALS INVOLVED ONE COMMON ISSUE, THEREFORE, THESE ARE DECIDED BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. THE GROU NDS RAISED IN THESE APPEALS ARE AS UNDER:- SHRI NOORUDIN NAZARALLY PATEL: (I). THE LD. CIT(A)-III, RAJKOT HAS ERRED IN LAW AND ON FACTS IN DIRECTING THE AO TO CALCULATE THE INTEREST U/S.245D(2C) WITH REFERENCE TO DELAYED PAYMENT OF ADDITIONAL AMOUNT OF TAX CALCULA TED AS DIFFERENCE BETWEEN THE TAX ON RS.26,29,964/- AND T AX ON RETURNED INCOME OF RS.10,00,000/- WHICH AMOUNTS TO TAX ON R S.16,19,964/- DUE TO UNIFORM RATE OF TAXATION FOR ALL INCOMES IN CASE OF BLOCK A.Y. (II) ON THE FACTS OF THE CASE, THE LD. CIT(A)-III, RAJKOT OUGHT TO HAVE UPHELD HELD THE ORDER OF THE ASSESSING OFFICER. (III) IT IS, THEREFORE, PRAYED THAT THE ORDER OF TH E CIT(A)-III, RAJKOT MAY KINDLY BE SET ASIDE AND THAT OF THE ASSESSING OFFIC ER MAY KINDLY BE RESTORED BACK TO THE ABOVE EXTENT. SHRI SABBIR NAZARALLY PATEL: (I). THE LD. CIT(A)-III, RAJKOT HAS ERRED IN LAW AND ON FACTS IN DIRECTING THE AO TO CALCULATE THE INTEREST U/S.245D(2C) WITH REFERENCE TO DELAYED PAYMENT OF ADDITIONAL AMOUNT OF TAX CALCULA TED AS DIFFERENCE BETWEEN THE TAX ON RS.64,08,708/- AND T AX ON RETURNED INCOME OF RS.10,00,000/- WHICH AMOUNTS TO TAX ON R S.54,08,708/- DUE TO UNIFORM RATE OF TAXATION FOR ALL INCOMES IN CASE OF BLOCK A.Y. (III) ON THE FACTS OF THE CASE, THE LD. CIT(A)-III, RAJKOT OUGHT TO HAVE UPHELD HELD THE ORDER OF THE ASSESSING OFFICER. ITA 26 TO 29/RJT/2011. 3 (III) IT IS, THEREFORE, PRAYED THAT THE ORDER OF TH E CIT(A)-III, RAJKOT MAY KINDLY BE SET ASIDE AND THAT OF THE ASSESSING OFFIC ER MAY KINDLY BE RESTORED BACK TO THE ABOVE EXTENT. SHRI ASGARALLY NAZARALLY PATEL: (I). THE LD. CIT(A)-III, RAJKOT HAS ERRED IN LAW AND ON FACTS IN DIRECTING THE AO TO CALCULATE THE INTEREST U/S.245D(2C) WITH REFERENCE TO DELAYED PAYMENT OF ADDITIONAL AMOUNT OF TAX CALCULA TED AS DIFFERENCE BETWEEN THE TAX ON RS.70,10,078/- AND T AX ON RETURNED INCOME OF RS.10,00,000/- WHICH AMOUNTS TO TAX ON R S.60,10,078/- DUE TO UNIFORM RATE OF TAXATION FOR ALL INCOMES IN CASE OF BLOCK A.Y. (IV) ON THE FACTS OF THE CASE, THE LD. CIT(A)-III, RAJKOT OUGHT TO HAVE UPHELD HELD THE ORDER OF THE ASSESSING OFFICER. (III) IT IS, THEREFORE, PRAYED THAT THE ORDER OF TH E CIT(A)-III, RAJKOT MAY KINDLY BE SET ASIDE AND THAT OF THE ASSESSING OFFIC ER MAY KINDLY BE RESTORED BACK TO THE ABOVE EXTENT. SHRI MOHSIN NAZARALLY PATEL: (I). THE LD. CIT(A)-III, RAJKOT HAS ERRED IN LAW AND ON FACTS IN DIRECTING THE AO TO CALCULATE THE INTEREST U/S.245D(2C) WITH REFERENCE TO DELAYED PAYMENT OF ADDITIONAL AMOUNT OF TAX CALCULA TED AS DIFFERENCE BETWEEN THE TAX ON RS.59,08,789/- AND T AX ON RETURNED INCOME OF RS.10,00,000/- WHICH AMOUNTS TO TAX ON R S.49,08,789/- DUE TO UNIFORM RATE OF TAXATION FOR ALL INCOMES IN CASE OF BLOCK A.Y. (V) ON THE FACTS OF THE CASE, THE LD. CIT(A)-III, R AJKOT OUGHT TO HAVE UPHELD HELD THE ORDER OF THE ASSESSING OFFICER. (III) IT IS, THEREFORE, PRAYED THAT THE ORDER OF TH E CIT(A)-III, RAJKOT MAY KINDLY BE SET ASIDE AND THAT OF THE ASSESSING OFFIC ER MAY KINDLY BE RESTORED BACK TO THE ABOVE EXTENT. 2. THE FACTUAL MATRIX OF ALL THE APPEALS IS IDENTIC AL. THEREFORE, WE WILL CONSIDER THE FACTS IN THE CASE OF SHRI NOORUDIN NAZ ARALLY PATEL. IN THIS CASE, THE ORDER GIVING EFFECT TO THE ORDER OF HONBLE SETTLEM ENT COMMISSIONS ORDER WAS PASSED ON 07-07-2007. RECALCULATION OF TAX AND INT EREST U/S.245D(2C) WAS LEVIED AS PER DIRECTION GIVEN IN SCS ORDER. THERE AFTER, ASSESSEE MADE RECTIFICATION APPLICATION FOR INTEREST LEVIED U/S.2 45(2C) STATING THAT SAID INTEREST IS LEVIABLE ONLY ON THE TAX ON THE ADDITIONAL INCOME W HICH REMAIN UNPAID ON ADMISSION OF THE SETTLEMENT APPLICATION. AS THE AO REJECTED APPLICATION, ITA 26 TO 29/RJT/2011. 4 ASSESSEE PREFERRED APPEAL WITH CIT(A)-IV, AHMEDABAD , WHICH WAS ALSO DISMISSED. ASSESSEE THEN FILED APPEAL BEFORE ITAT W HERE THE MATTER WAS RESTORED BACK TO THE AO TO BE DECIDED AFRESH. AO, THEN GAVE THE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE BEFORE PASSING THE ORDE R. THE ASSESSEE HAS STATED THAT THE INTEREST U/S.245D(2C) OF THE I. T. ACT IS LEVIABLE ONLY ON THE AX ON THE ADDITIONAL INCOME OFFERED BEFORE THE HONBLE SETTLE MENT COMMISSION. THE SAME REMAINED UNPAID AFTER THIRTY FIVE DAYS OF THE ORDER DTD. 22-05-2003 OF HONBLE SETTLEMENT COMMISION REGARDING ADMISSION OF THE SET TLEMENT APPLICATION. THE HONBLE SETTLEMENT COMMISSION, MUMBAI ADMITTED ASSE SSEES APPLICATION AND PASSED ORDER NO.10/C/068-072/2001-02/IT DATED 22-05 -2003 UNDER WHICH IT WAS HELD THAT:- IN ACCORDANCE WITH THE PROVISION OF SUB-SECTION (2 A) OF SECTION 245D OF THE ACT, THE APPLICANT SHALL, WITHIN 35 DAY S OF THE RECEIPT OF THE ORDER, PAY THE ADDITIONAL AMOUNT OF INCOME-TAX PAYA BLE ON THE INCOME DISCLOSED IN THE APPLICATION AND SHALL FURNISH PROO F OF SUCH PAYMENT TO THE OFFICER ASSESSING HIM WITHIN 15 DAYS OF MAKING THE AFORESAID PAYMENT. IF THE APPLICANT DO NOT PAY THE ADDITIONAL AMOUNT OF I NCOME-TAX AS ABOVE WITHIN THE TIME SPECIFIED IN SUB-SECTION (2A) OF SE CTION 245D OF THE ACT, THE AMOUNT OF INCOME-TAX REMAINING UNPAID TOGETHER WITH ANY INTEREST PAYABLE THEREON UNDER SUB-SECTION (2C) OF THE SECTION 245D OF THE ACT SHALL BE RECOVERED BY THE ASSESSING OFFICER IN ACCORDANCE WI TH THE PROVISION OF SECTION 245D(2D) OF THE ACT. 3. SINCE THE ASSESSEE HAD NOT PAID ADDITIONAL AMOUN T OF INCOME-TAX WITHIN TIME AS REQUIRED UNDER SUB-SECTION (2A) OF SECTION 245D OF THE INCOME-TAX ACT, 1961, THE ASSESSEE WAS REQUIRED TO PAY THE ENTIRE A MOUNT OF ADDITIONAL INCOME- TAX WITHIN 35 DAYS OF THE RECEIPT OF THE ORDER OF H ONBLE SETTLEMENT COMMISSION. THE HONBLE SETTLEMENT COMMISSION HAD PASSED THE OR DER IN THIS CASE ON 22-05- 2003. ACCORDING TO AO, THE ASSESSEE WAS LIABLE TO P AY THE INTEREST AS PER SUBSECTION (2C) OF SECTION 245D, ON THE ADDITIONAL INCOME-TAX PAYABLE BY THE ASSESSEE. ACCORDINGLY, THE AO CHARGED INTEREST U/S . 245D(2C) AT RS.5,83,507/- FOR THE PERIOD FROM 01-07-2003 TO THE DATE OF PAYME NT. 4. THE LD. CIT(A) VIDE ORDER NO. CIT(A)/III/RJT/008 5/10-11 DATED 29-09-2011 HAS IN HIS ORDER MENTIONED THAT THE ADDITIONAL AMO UNT OF INCOME-TAX HAS BEEN ITA 26 TO 29/RJT/2011. 5 DEFINED AS THE DIFFERENCE BETWEEN THE TAX ON AGGRE GATE OF INCOME DISCLOSED BY THE ASSESSEE IN THE APPLICATION BEFORE THE ITSC AND THE RETURNED INCOME AND THE TAX CALCULATED ON RETURNED INCOME. 5. AGGRIEVED WITH THE ORDER OF LD. CIT(A), THE REVE NUE IS IN APPEAL BEFORE THE TRIBUNAL. 6. AT THE TIME OF HEARING BEFORE US, ON BEHALF OF R EVENUE,SHRI M. K. SINGH, D.R. APPEARED AND CONTENDED THAT THE DECISION OF TH E LD. CIT(A) IS NOT ACCEPTABLE AS THE PROVISIONS CONTAINED U/S. 245D(6) MENTIONS ABOUT THE TERMS OF INTEREST CHARGEABLE IN THE SETTLEMENT ORDER AND SPE CIFIC ORDER IS REQUIRED TO BE PROVIDED BY HONBLE SETTLEMENT COMMISSION, IF INTER EST IS CHARGEABLE ON THE ADDITIONAL INCOME. IF NOTHING IS MENTIONED IN THE SETTLEMENT ORDER THEN THE INTEREST ON TOTAL INCOME IS REQUIRED TO BE CHARGED BY THE AO WHILE GIVING EFFECT TO THE ORDER OF HONBLE SETTLEMENT COMMISSION. CONSID ERING THE ABOVE FACTS OF THE CASE, AO HAS RIGHTLY CALCULATED INTEREST AT RS.5,83 ,507/-, ON THE TAX PAYABLE ON TOTAL INCOME, FOR THE PERIOD FROM 01-07-2003 TO THE DATE OF PAYMENT. THE LD. DR ACCORDINGLY PLEADED THAT THE ORDER OF LD. CIT(A) BE SET-ASIDE AND IT MAY BE HELD THAT THE AO HAS RIGHTLY CALCULATED THE INTEREST OF RS.5,83,507/- ON THE TAX PAYABLE FOR THE PERIOD FROM 01-07-2003 TO THE DATE OF PAYME NT. AS AGAINST THIS, SHRI J.C. RANPURA APPEARING ON BEHALF OF THE ASSESSEE VEHEMEN TLY SUPPORTED THE ORDER OF LD. CIT(A). 7. HAVING HEARD BOTH SIDES, WE HAVE CAREFULLY GONE THROUGH THE ORDER OF AUTHORITIES BELOW. IT IS PERTINENT TO NOTE THAT INT EREST U/S.245D(2C) OF THE I. T. ACT IS LEVIABLE ONLY ON THE TAX ON THE ADDITIONAL INCOM E OFFERED BEFORE THE HONBLE SETTLEMENT COMMISSION. THEREFORE, ONLY THAT AMOUNT REMAINED UNPAID AFTER 35 DAYS OF THE ORDER OF THE SETTLEMENT COMMISSION. TH E VIEW TAKEN BY THE LD. CIT(A) IN THE IMPUGNED ORDER IS AS PER THE PROVISIO NS CONTAINED IN SUB-SECTION (2A) OF SECTION 245D OF THE I. T. ACT, R.W.S.(2C) O F SECTION 245D OF THE I.T. ACT. WE THEREFORE, INCLINED TO UPHELD THE VIEW TAKEN BY LD. CIT(A) IN THIS REGARD. ITA 26 TO 29/RJT/2011. 6 8. THE FACT AND CONTROVERSY INVOLVED IN REMAINING T HREE APPEALS IS IDENTICAL. WE ARE THEREFORE, OF THE VIEW THAT IN RESPECT OF TH ESE THREE ASSESSEES, ONLY THE VIEW TAKEN BY LD. CIT(A) IS FAIR AND REASONABLE. W E THEREFORE, FOLLOWING OUR DECISION IN THE CASE OF SHRI NOORUDIN NAZARALLY PAT EL (SUPRA), DISMISS THE APPEAL OF THE REVENUE. 9. IN THE RESULT, ALL THE FOUR APPEALS OF REVENUE A RE DISMISSED. THIS ORDER IS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED HEREINABOVE. SD/- SD/- ( .. / D. K. SRIVASTAVA) ( .. / T. K. SHARMA) / ACCOUNTANT MEMBER /JUDICIAL MEMBER 3/ ORDER DATE 25-05-2012. /RAJKOT - -- - +4 +4 +4 [phone] / COPY OF ORDER FORWARDED TO:- 1. * / APPELLANT-. THE ASSTT. CIT., CIR.-2, RAJKOT. 2. +,* / RESPONDENT-SHRI NOORUDIN NAZARALLY PATEL, RAJKOT . 3. : / CONCERNED CIT-II, RAJKOT.. 4. :- / CIT (A)-III, RAJKOT.. 5. 4 +, , / DR, ITAT, RAJKOT 6. / GUARD FILE. / BY ORDER , ASSTT. REGISTRAR , INCOME TAX APPELLATE TRIBUNAL, RAJKOT.