COMMSNR OF INCOME TAX VIJAYAWADA V. M/S.SREE RAYALASEEMA ALKALIES AND A.C.LTD

ITTA/63/2001

AI Insights

This case involves an appeal by the Revenue under Section 260-A of the Income Tax Act, 1961 against a company engaged in manufacturing and related activities. The dispute centered on the levy of interest under Sections 234-B and 234-C of the Act concerning amounts referable to Section 115-J of the Act for the assessment year 1990-91. The Tribunal had previously allowed the respondent's appeal, following a Coordinate Bench's decision in a similar case. The Department challenged this decision, citing a Supreme Court judgment that interest was leviable. The respondent contested the appeal's admissibility, arguing it was filed beyond the prescribed period of limitation. The court, after considering the merits and the procedural aspects, decided to allow the appeal, setting aside the Tribunal's order but exempting the respondent from paying interest for the period during which the appeal was pending.

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 718868 (HC-HYDERABAD)
• Appeal Type: Others
• Pronouncement Date: 01-07-2014
• Assessment Year: misc
• Other Referred Cases: Dy. CIT vs Rubamin Private Limited, Joint Commissioner of Income Tax vs. Rolta India Ltd.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Keywords: Advance tax; Book Profits; Income Tax; Interest Levy; Limitation Period
• Section: 234 B; 234 C; 115-JB; 115-JA; 260-A; 115-J

Judgement Text

"THE HON’BLE SRI JUSTICE L.NARASIMHA REDDY AND THE HON’BLE SRI JUSTICE CHALLA KODANDA RAM I.T.T.A.No.63 of 2001 JUDGMENT: (Per LNR,J) This appeal is filed by the Revenue under Section 260-A of the Income Tax Act, 1961 (for short ‘the Act’). The respondent is a company undertaking manufacturing and other related activities. For the assessment year 1990-91, the assessing officer levied interest under Sections 234-B and 234-C of the Act against the amounts referable to Section 115-J of the Act. The appeal preferred by the respondent before the Commissioner was dismissed. Thereupon, it approached the Hyderabad Bench of the Income Tax Appellate Tribunal. Following the order passed by a Coordinate Bench in Dy. CIT vs Rubamin Private Limited[1], the Tribunal allowed the appeal through order, dated 11.05.2000. Hence, this appeal by the Department. Learned counsel for the appellant submits that whatever may have been the uncertainty that prevailed at the relevant point of time, in view of the judgment of the Hon’ble Supreme Court in Joint Commissioner of Income Tax vs. Rolta India Ltd.[2], the interest becomes leviable. Learned counsel for the respondent, on the other hand, submits that the appeal was filed beyond the prescribed period of limitation and thereby, it is liable to be rejected. He submits that the Tribunal allowed the appeal on 11.05.2000, the Department received the certified copy on 16.06.2000 and still the appeal was presented only on 24.01.2001. He submits that the appeal is barred by limitation as prescribed under 260-A of the Act. On merits, he submits that the Tribunal has followed the law that was prevailing as on the date of order and no exception can be taken to it. The question of limitation needs to be dealt with first. It is a matter of record that the appeal preferred by the respondent was allowed by the Tribunal on 11.05.2000. The certified copy, applied for by the appellant was made ready on 19.05.2000. There is a stamp of the Department itself, on the original order with the date 16.06.2000. However, similar stamp with the date of 28.09.2000 is placed on the same order. The only difference is that the second stamp contains an initial, whereas the first one does not. Normally, the endorsement as to the receipt of the certified copy is made by the concerned Court or Tribunal or authority. There does not appear to be such a practice for the Tribunal. The date furnished by the recipient of the certified copy becomes relevant, for all practical purposes. In the instant case, there are two stamps, reflecting the date of receipt i.e.16.06.2000 and 28.09.2000. If the first date is taken into account, the appeal becomes barred by limitation. Obviously by taking into account the second date, the appeal was presented and the Registry of this Court numbered it. At one stage, this Court summoned the relevant registers from the Income Tax Department. The ambiguity still remains. It is fairly well settled that on the expiry of limitation for filing an appeal, valuable rights accrue to the opposite party. That becomes a relevant factor to be taken into account, while examining the application for condonation of delay. An appeal, which is filed after expiry of limitation and numbered by mistake, does not become nullity. At the most, the corrective steps of requiring the appellant to file an application under Section 5 of the Limitation Act can be taken. Registry went by the version presented by the appellant. We cannot totally ignore the objection raised by the respondent on the question of limitation. We are of the view that instead of returning the appeal nearly 13 years after it was numbered and requiring the appellant to file an application to condone the delay, it would be better if the appeal is disposed of on merits by treating the delay as having been condoned, subject to the condition that in the vent of the respondent being exposed to the obligation to pay any amount, it shall be relieved of the necessity to pay interest for the period during which this appeal was pending. Coming to the merits of the matter, the controversy is about the levy of interest on the advance tax payable on the book profits referable to Sections 115-JA and 115- JB of the Act. The assessing authority as well as the appellate authority took the view that the respondent is under obligation to pay that amount. The Tribunal however took into account an order passed by the Coordinate Bench in Rubamin’s case (1 supra). In the recent past, the Hon’ble Supreme Court dealt with that issue comprehensively in Rolta India Ltd.’s case (2 supra). Their lordships took the view that the interest is payable. Therefore, the appeal deserves to be allowed. Hence, the appeal is allowed, setting aside the order passed by the Tribunal and upholding the order of the assessing authority as affirmed by the appellate Commissioner. It is however directed that the respondent shall not be under obligation to pay interest on the amount from the date of the order of the Tribunal viz., 11.05.2000. The miscellaneous petition filed in this appeal shall also stand disposed of. There shall be no order as to costs. ____________________ L.NARASIMHA REDDY, J ______________________ CHALLA KODANDA RAM, J Date: 01.07.2014 JSU THE HON’BLE SRI JUSTICE L.NARASIMHA REDDY AND THE HON’BLE SRI JUSTICE CHALLA KODANDA RAM I.T.T.A.No.63 of 2001 Date: 01.07.2014 JSU [1] 104 Taxman 83 [2] (2011) 330 ITR 470 (SC) "