M.Pranuthi, Salem v. ACIT, Salem

IN THE INCOME TAX APPELLATE TRIBUNAL BENCH A CHENNAI (BEFORE SHRI HARI OM MARATHA JUDICIAL MEMBER AND SHRI ABRAHAM P. GEORGE ACCOUNTANT MEMBER) .. I.T.A. NOS. 976 977 978 979 980 981 982 983 & 984/MDS/10 ASSESSMENT YEARS : 1995-96 1996-97 1997-98 1999 -2000 2000- 01 2002-03 2003-04 2004-05 & 2005-06 THE ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE I NO.3 GANDHI ROAD SALEM 636 007. (APPELLANT) V. M. PRANUTHI C/O SHRI R.P. SARATHY 21 GANDHI ROAD SALEM 636 007. PAN : AGMPP9169P (RESPONDENT) C.O. NOS. 52 53 54 55 56 57 58 59 & 60/MDS/1 0 (IN I.T.A. NOS. 976 977 978 979 980 981 982 983 & 984/MDS/10) ASSESSMENT YEARS : 1995-96 1996-97 1997-98 1999 -2000 2000- 01 2002-03 2003-04 2004-05 & 2005-06 M. PRANUTHI C/O SHRI R.P. SARATHY 21 GANDHI ROAD SALEM 636 007. (CROSS OBJECTOR) V. THE ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE I NO.3 GANDHI ROAD SALEM 636 007. (RESPONDENT) REVENUE BY : SHRI SHAJI P. JACOB ASSESSEE BY : SHRI S. SR IDHAR O R D E R PER BENCH : THESE ARE APPEALS OF THE REVENUE AND CROSS OBJECTI ONS OF THE ASSESSEE FOR THE RESPECTIVE ASSESSMENT YEARS DIREC TED AGAINST THE I.T.A. NOS. 976 TO 984/MDS/10 C.O. NOS. 52 TO 60/MDS/10 2 COMMON ORDER DATED 26.3.2010 OF COMMISSIONER OF INC OME TAX (APPEALS) SALEM. ISSUE RAISED BY BOTH THE REVENUE AS WELL AS ASSESSEE IS REGARDING INTEREST UNDER SECTION 244A O F THE INCOME-TAX ACT 1961 (HEREINAFTER CALLED AS THE ACT) ON TAXE S PAID UNDER SECTION 140A OF THE ACT. 2. GRIEVANCE OF THE REVENUE IS THAT INTEREST UNDER SECTION 244A OF THE ACT COULD BE GIVEN ONLY ON ADVANCE TAX AND O N TDS/TCS AND NOT ON SELF-ASSESSMENT TAX AND THEREFORE THE ORDER OF THE CIT(APPEALS) DIRECTING GRANT OF SUCH INTEREST WAS N OT IN ACCORDANCE WITH LAW. ACCORDING TO REVENUE THE CIT(APPEALS) R ELIED ON THE DECISION OF HON'BLE APEX COURT IN THE CASE OF MODI INDUSTRIES LTD. V. CIT (1995) 216 ITR 759 (SC) WHERE THE ISSUES RELATE D TO INTERPRETATION OF SECTIONS 214 AND 244 AND NOT SECT ION 244A OF THE ACT. 3. ON THE OTHER HAND ASSESSEE IN HIS CROSS OBJECTI ONS IS AGGRIEVED THAT CIT(APPEALS) DIRECTED THE ASSESSING OFFICER TO COMPUTE INTEREST PAYABLE TO THE ASSESSEE ONLY FROM THE DATE OF PROCESSING UNDER SECTION 143(1) OF THE ACT WHEREAS AS PER THE I.T.A. NOS. 976 TO 984/MDS/10 C.O. NOS. 52 TO 60/MDS/10 3 ASSESSEE IT SHOULD HAVE BEEN FROM 1 ST APRIL OF THE IMPUGNED ASSESSMENT YEARS. 4. SHORT FACTS APROPOS ARE THAT BASED ON THE DECISI ON GIVEN BY THIS TRIBUNAL IN APPEALS FOR ASSESSMENT YEARS 1995-96 TO 1999-2000 AND BY CIT(APPEALS) FOR ASSESSMENT YEARS 2000-01 TO 200 5-06 THE A.O. HAD PASSED ORDERS GIVING EFFECT FOR THE RESPECTIVE ASSESSMENT YEARS. HOWEVER WHILE CALCULATING INTEREST PAYABLE TO THE ASSESSEE ON REFUNDS A.O. DID NOT GRANT ANY INTEREST ON TAXES P AID UNDER SECTION 140A IN SUCH GIVING EFFECT ORDERS. ASSESSEE FILED RECTIFICATION APPLICATION FOR ALL THE YEARS CONCERNED WHICH WAS R EJECTED ON 30.04.2007 FOR A REASON THAT SELF-ASSESSMENT TAX CO ULD NOT BE CONSIDERED FOR GRANTING INTEREST UNDER SECTION 244A OF THE ACT. 5. APPEALS WERE FILED BY THE ASSESSEE AGAINST THE R EFUSAL OF THE A.O. TO GRANT INTEREST UNDER SECTION 244A OF THE A CT ON TAXES PAID UNDER SECTION 140A OF THE ACT. SUBMISSION OF THE A SSESSEE WAS THAT PRE-ASSESSMENT TAX WOULD INCLUDE SUCH SELF-ASSESSME NT TAX ALSO AND BASED ON THE DECISION OF HON'BLE APEX COURT IN THE CASE OF MODI INDUSTRIES LTD. (SUPRA) WHICH WAS FOLLOWED BY JURIS DICTIONAL HIGH COURT IN THE CASE OF CIT V. ASHOK LEYLAND LTD. REPORTED I N 252 ITR 542 THE I.T.A. NOS. 976 TO 984/MDS/10 C.O. NOS. 52 TO 60/MDS/10 4 REJECTION OF ITS PETITION UNDER SECTION 154 OF THE ACT FOR GRANT OF SUCH INTEREST WAS NOT JUSTIFIED. LD. CIT(APPEALS) WAS A PPRECIATIVE OF THIS CONTENTION. ACCORDING TO HIM OMISSION TO FOLLOW T HE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT EVEN WHEN SUCH DE CISION WAS AVAILABLE AT THE TIME OF PROCESSING THE ORDER WAS A RECTIFIABLE MISTAKE UNDER SECTION 154 OF THE ACT. HOWEVER AS PER THE CIT(APPEALS) ASSESSEE COULD NOT BE GIVEN SUCH INTEREST WITH EFFE CT FROM 1 ST APRIL OF THE RESPECTIVE ASSESSMENT YEARS BUT ONLY FROM THE D ATE OF PROCESSING OF THE RESPECTIVE RETURNS UNDER SECTION 143(1) OF T HE ACT. 6. NOW BEFORE US THE LEARNED D.R. STRONGLY ASSAILI NG THE ORDER OF CIT(APPEALS) SUBMITTED THAT SELF-ASSESSMENT TAX CO ULD NOT BE CONSIDERED FOR GRANT OF INTEREST UNDER SECTION 244A OF THE ACT AND IN ANY CASE SUCH AN ISSUE WAS A DEBATABLE ONE AND NOT AMENABLE TO A RECTIFICATORY PROCEEDINGS UNDER SECTION 154 OF THE ACT. 7. PER CONTRA THE LEARNED A.R. SUBMITTED THAT ASSE SSEE WAS ELIGIBLE FOR INTEREST UNDER SECTION 244A OF THE ACT ON REFUNDS DUE TO IT ARISING FROM SELF-ASSESSMENT TAX PAID UNDER SECTION 140A OF THE ACT. FURTHER ACCORDING TO HIM THE CIT(APPEALS) OUGHT H AVE GRANTED SUCH INTEREST FROM 1 ST APRIL OF RESPECTIVE ASSESSMENT YEARS. IN OTHER I.T.A. NOS. 976 TO 984/MDS/10 C.O. NOS. 52 TO 60/MDS/10 5 WORDS HE SUPPORTED THE ORDER OF CIT(APPEALS) WITH REGARD TO GRANT OF INTEREST UNDER SECTION 244A OF THE ACT BUT NEVERTH ELESS POINTED OUT THAT SUCH INTEREST WAS TO BE GIVEN FROM 1 ST APRIL OF RESPECTIVE ASSESSMENT YEARS. 8. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL C ONTENTIONS. IN OUR OPINION WHEN THE A.O. WAS PASSING THE ORDERS G IVING EFFECT TO THE DECISIONS OF APPELLATE AUTHORITIES HE WAS OBLIGED TO CONSIDER ALL PRE- ASSESSMENT TAXES FOR THE PURPOSE OF CALCULATION OF REFUNDS AS WELL AS INTEREST. DECISION OF HON'BLE APEX COURT IN THE CA SE OF MODI INDUSTRIES LTD. (SUPRA) IS CLEAR IN THAT ALL PRE-AS SESSMENT TAXES HAD TO BE CONSIDERED FOR GRANT OF INTEREST. FURTHER HON' BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT V. CHOLAMANDALAM INVE STMENT AND FINANCE CO. LTD. (2007) 294 ITR 438 (MAD) HAS CLEAR LY HELD THAT AN ASSESSEE WAS ENTITLED FOR INTEREST UNDER SECTION 24 4A ON REFUNDS OF TAX PAID UNDER SECTION 140A ALSO. WHILE TAKING THI S VIEW THEIR LORDSHIP HAS FOLLOWED EARLIER DECISION IN THE CASE OF ASHOK LEYLAND LTD. (SUPRA) WHEREIN IN RELATION TO OVERPAYMENT OF SELF-ASSESSMENT TAX UNDER SUR TAX ACT INTEREST UNDER SECTION 18 OF THE SAID ACT READ WITH SECTION 244(1)(A) OF INCOME-TAX ACT WAS HELD A S PAYABLE. THUS ON THE DATE WHEN THE A.O. WAS CONSIDERING THE RECTI FICATION I.T.A. NOS. 976 TO 984/MDS/10 C.O. NOS. 52 TO 60/MDS/10 6 APPLICATION WITHOUT DOUBT THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF ASHOK LEYLAND LTD. (SUPRA) WAS ALREADY AVAILABLE. NOT CONSIDERING THE DECISION OF JURISDI CTIONAL HIGH COURT IS DEFINITELY A MISTAKE WHICH IS RECTIFIABLE UNDER SEC TION 154 OF THE ACT. THEREFORE WE DO NOT FIND ANY ERROR IN THE ORDER OF THE CIT(APPEALS) IN DIRECTING THE A.O. TO GRANT INTEREST TO THE ASSESSE E ON REFUNDS ARISING OUT OF TAXES PAID UNDER SECTION 140A OF THE ACT. V IS--VIS DATE FROM WHICH SUCH INTEREST HAS TO BE CALCULATED IN THE CAS E OF CHOLAMANDALAM INVESTMENT AND FINANCE CO. LTD. (SUPR A) DECIDED BY THE HON'BLE JURISDICTIONAL HIGH COURT AS WELL A S IN THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF CIT V. SUTL EZ INDUSTRIES LTD. (2010) 325 ITR 331 (DEL) IT WAS HELD THAT AN ASSES SEE WAS ENTITLED FOR INTEREST UNDER SECTION 244A ON REFUND ARISING O UT OF SELF- ASSESSMENT TAX PAID UNDER SECTION 140A FROM THE DA TE OF PAYMENT OF SUCH AMOUNT UPTO THE DATE ON WHICH REFUND IS GRA NTED TO AN ASSESSEE. THEREFORE WE ARE OF THE OPINION THAT AS SESSEE OUGHT HAVE BEEN GRANTED INTEREST FROM THE DATE OF PAYMENT OF THE TAX AND NOT FROM THE DATE OF PROCESSING THE RETURN UNDER SE CTION 143(1) OF THE ACT NOR FROM THE 1 ST DAY OF APRIL OF RELEVANT ASSESSMENT YEARS. WE THEREFORE DIRECT THE A.O. THAT ASSESSEE BE GRANTED INTEREST FROM THE I.T.A. NOS. 976 TO 984/MDS/10 C.O. NOS. 52 TO 60/MDS/10 7 DATE OF PAYMENT OF SELF-ASSESSMENT TAX TILL THE DAT E ON WHICH REFUND AMOUNT WAS GRANTED. 9. IN THE RESULT ALL THE APPEALS OF THE REVENUE ST AND DISMISSED WHEREAS CROSS OBJECTIONS OF THE ASSESSEE STAND PART LY ALLOWED. THE ORDER WAS PRONOUNCED IN THE COURT ON 15 TH FEBRUARY 2011. SD/- SD/- (HARI OM MARATHA) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI DATED THE 15 TH MARCH 2011. KRI. COPY TO: (1) APPELLANT (2) RESPONDENT (3) CIT(A) SALEM (4) CIT SALEM (5) D.R. (6) GUARD FILE