Shri Hirenbhai Karsanbhai Patel, Ahmedabad V. The ACIT, Circle-5, Ahmedabad

ITSSA 462/AHD/2013

• Counselvise Citation: [2017] 122 COUNSELVISE.COM (IT) 3163 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 3 month(s) 28 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 20-04-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 13-04-2017
• Assessment Year: misc
• Appeal Filed On: 23-12-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH BEFORE: SHR I RAJPAL YADAV , JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER HIRENBHAI KA R SANBHAI PATEL, NIRMA HOUSE, AHRAM ROAD, AHMEDABAD PAN: AGGPP2907H (APPELLANT) VS THE ACIT, CIRCLE - 5, AHMEDABAD (RESPONDENT) REVENUE BY : S H RI K. MADHUSUDAN , SR. D . R. A SSESSEE BY: S H RI HIMANSHU SHAH , A.R. DATE OF HEARING : 13 - 04 - 2 017 DATE OF PRONOUNCEMENT : 20 - 04 - 2 017 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - THIS AS SESSEE S AP PEAL FOR BLOCK PERIOD 01 - 4 - 1995 TO 27 - 09 - 2001 , ARI SES FROM ORDER OF THE CIT(A) - XI, AHMEDABAD DATED 11 - 11 - 2013 IN APPEAL NO. CIT(A) - XI/183 / ACIT.CIR - 5/12 - 13 , IN PROCEEDINGS UNDER SECT ION 154 OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . I T (SS) A NO . 462 / A HD/20 13 BLOC K PERIOD 01 - 4 - 1995 TO 27 - 09 - 2001 I.T. (SS) A NO. 462 /AHD/20 13 A.Y. BLOCK PERIOD PAGE NO HIRENBHAI KARSANBHAI PATEL VS. ACIT 2 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: - 1) IN LAW AND IN FACTS AND CIRCUMSTANCES OF THE APPELLANT'S CASE, THE LEARNED CIT(A) HAS GROSSLY ERRED IN POINTS OF LAW AND FACTS. 2) IN LAW AND IN FACTS AND CIRCUMSTANCES OF THE APPELLANT'S CASE, THE LEARNED CIT(A) HAS GROSSLY ERRED IN REJECTING APPELLANT'S CONTENTION THAT COMPENSATION RS.32,490 SHOULD BE GIVEN FOR ISSUING DELAYED REFUND. 3. BRIEF FACTS OF THE CASE ON THE ISSUE IN GROUND OF APPEAL IS THAT THE ASSESSING OFFICER HAD GRANTED REFUND ON THE APPLICATION OF THE ASSESSEE VIDE ORDER U/S. 154 OF THE ACT MADE ON 1 6 - 0 4 - 2012. THE ASSESSEE FILED APPEAL BEFORE THE LD. CIT(A) THAT THE ASSESSING OFFICER HAD NOT GRANTED ADDITIONAL COMPENSATION OF RS. 3 2 , 49 0 / - ON THE INTEREST RECEIVABLE U/S. 244 A OF THE ACT . THE LD. CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE BY STATING THAT DECISION OF THE HON BLE APEX COURT IN THE CASE OF SANDVIK ASIA 280 ITR 643 HAD BEEN OVERRULED BY THE DECISION OF THE APEX COURT IN THE CASE OF CIT VS. GUJARAT FLOURO CHEMIC ALS. THE FINDINGS OF THE LD. CIT(A) IS REPRODUCED AS UNDER: - 3.1 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE. APPELLANT HAS RELIED ON VARIOUS DECISIONS IN WHICH INTEREST ON DELAY IN PAYMENT OF INTEREST U/S.244A HAVE BEEN ALLOWED TO THE ASSESSEE. AP PELLANT HAS ALSO INVITED ATTENTION TO THE ORDERS OF MY PREDECESSOR LD. CIT(A) IN THE CASE OF NIRMA LTD. IN WHICH THE A.O. HAS BEEN DIRECTED TO GRANT INTEREST. THESE DIRECTIONS WERE MAINLY GIVEN IN VIEW OF DECISION OF HON'BLE SUPREME COURT IN THE CASE OF SA NDVIK ASIA 280 ITR 643. THE HON'BLE SUPREME COURT HAS RECENTLY DELIVERED A CONTRARY DECISION IN THE CASE OF CIT VS GUJARAT FLOURO CHEMICALS IN SLP (CIVIL) NO. 11406/2008. THE SUPREME COURT HAS HELD THAT IN THE I.T. (SS) A NO. 462 /AHD/20 13 A.Y. BLOCK PERIOD PAGE NO HIRENBHAI KARSANBHAI PATEL VS. ACIT 3 SANDVIK ASIA CASE THE INTEREST PAYMENT WAS WRO NGLY WITHHELD FOR A LONG PERIOD OF 17 YEARS. THEREFORE, THE INTEREST FOR DELAY IN PAYMENT OF THE AMOUNT LAWFULLY DUE TO ASSESSEE WAS ORDERED. NOW IN THE ABOVE DECISION THE HON'BLE SUPREME COURT HAS OBSERVED THAT SECTION 214 OF THE I.T. ACT DOES NOT PROVIDE FOR PAYMENT OF COMPENSATION BY THE REVENUE TO THE ASSESSEE IN WHOSE FAVOUR REFUND ORDER HAS BEEN PASSED. IT WAS FURTHER OBSERVED BY THE HON'BLE SUPREME COURT THAT IN SANDVIK ASIA CASE INTEREST WAS ORDERED ON THE BASIS OF EQUITY AND ALSO ON THE BASIS OF AR TICLE 265 OF CONSTITUTION. HON'BLE SUPREME COURT HAS FURTHER HELD AS UNDER : - 'WE HAVE SERIOUS DOUBTS ABOUT THE CORRECTNESS OF THE JUDGEMENT IN SANDVIK ASIA [SUPRA]. IN OUR VIEW, THE JUDGMENT OF THIS COURT IN THE CASE OF MODI INDUSTRIES LIMITED VS. COMMISS IONER OF INCOME TAX, 1995 (6) S.C.C. 396 CORRECTLY HOLDS THAT ADVANCE TAX OR TDS LOSES ITS IDENTITY AS SOON AS IT IS ADJUSTED AGAINST THE LIABILITY CREATED BY THE ASSESSMENT ORDER AN D BECOMES TAX PAID PURSUANT TO THE ASSESSMENT ORDER. IF ADVANCE TAX OR TDS LOSES ITS IDENTITY AND BECOMES TAX PAID ON THE PASSING OF THE ASSESSMENT ORDER, THEN, IS THE ASSESSEE NOT ENTITLED TO INTEREST UNDER THE RELEVANT PROVISIONS OF THE ACT?' IT WAS ALSO HELD - 'WE SAY NO MORE. WITH RESPECT, WE ARE OF THE VIEW THAT SANDVIK AS IA (SUPRA) HAS NOT BEEN CORRECTLY DECIDED. IN THE CIRCUMSTANCES, WE DIRECT THE REGISTRY TO PLACE THIS MATTER BEFORE HON'BLE THE CHIEF JUSTICE ON THE ADMINISTRATIVE SIDE FO R APPROPRIATE ORDERS. THE REGISTRY IS ALSO DIRECTED TO PLACE SIMILAR MATTERS, WHICH ARE PENDING IN THIS COURT, ALONG WITH THIS PETITION.' 3.2 IN VIEW OF THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF GUJARAT FLOURO CHEMICALS (SUPRA), I AM OF THE OPINION THAT THE DELAY IN GRANT OF INTEREST U/S.244A WAS NOT INORDINATE AND CANNOT BE SAID TO HAVE CAUSED IRREPARABLE DAMAGE TO THE APPELLANT. THIS IS NOT A CASE WHERE THE INTEREST WAS WRONGLY HELD BY THE REVENUE FOR AN INORDINATE PERIOD. IN VIEW OF THE ABOVE DISCUSSION, I AM OF THE OPINION THAT THE GROUND OF APPEAL RAISED B Y THE APPELLANT AGAINST NON - GRANTING OF INTEREST ON INTEREST RECEIVABLE U/S.244A DESERVES TO BE DISMISSED. I.T. (SS) A NO. 462 /AHD/20 13 A.Y. BLOCK PERIOD PAGE NO HIRENBHAI KARSANBHAI PATEL VS. ACIT 4 4 . WE HAVE HEARD THE RIVAL CONTENTIONS. AFTER CONSIDERING THE DECISION OF THE HON BLE SUPREME COURT IN THE CASE OF GUJARAT FLOURO CHEMICALS AS EL ABORATED IN THE FINDINGS OF THE LD. CIT(A) WE FIND THAT LD.CIT(A) WAS JUSTIFIED IN HIS DECISION AS IN THE ABOVE CASE THE HON BLE SUPREME COURT HAS DECIDED THAT SECTION 214 OF THE ACT DOES NOT PROVIDE FOR PAYMENT OF COMPENSATION BY THE REVENUE , THEREFORE W E DO NOT FIND ANY REASON TO INTERFERE IN THE FINDINGS OF THE LD. CIT(A). 5 . AS A RESULT, THE APPEAL OF THE ASSESSEEE IS DISMISSED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 20 - 04 - 201 7 SD/ - SD/ - ( RAJPAL YADAV ) ( AMARJIT SINGH ) JUDIC IAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 20 /04 /2017 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,