Dr.K.Premraj, CHENNAI v. ACIT, CHENNAI

CO 80/CHNY/2010 | 2003-2004
Pronouncement Date: 20-10-2010 | Result: Dismissed

Appeal Details

RSA Number 8021723 RSA 2010
Assessee PAN AFXPP5673G
Bench Chennai
Appeal Number CO 80/CHNY/2010
Duration Of Justice 1 month(s) 28 day(s)
Appellant Dr.K.Premraj, CHENNAI
Respondent ACIT, CHENNAI
Appeal Type Cross Objection
Pronouncement Date 20-10-2010
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 20-10-2010
Assessment Year 2003-2004
Appeal Filed On 23-08-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL BENCH C CHENNAI (BEFORE SHRI K.K. GUPTA ACCOUNTANT MEMBER AND SHRI HARI OM MARATHA JUDICIAL MEMBER) ..... I.T.A. NOS. 1277 1278 1279 1280 1281 1282 & 12 83/MDS/2010 ASSESSMENT YEARS : 2000-01 TO 2006-07 THE ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE I(2) CHENNAI - 600 034. (APPELLANT) V. DR. K. PREMRAJ NEW NO.15 OLD NO.8 3 RD MAIN ROAD R.A. PURAM CHENNAI - 600 028. PAN : AFXPP5673G (RESPONDENT) C.O. NOS. 77 78 79 80 81 82 & 83/MDS/2010 (IN I.T.A. NOS. 1277 1278 1279 1280 1281 1282 & 1283/MDS/2010) ASSESSMENT YEARS : 2000-01 TO 2006-07 DR. K. PREMRAJ NEW NO.15 OLD NO.8 3 RD MAIN ROAD R.A. PURAM CHENNAI - 600 028. (CROSS OBJECTOR) V. THE ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE I(2) CHENNAI - 600 034. (RESPONDENT) REVENUE BY: SHRI K.E.B. RENGARAJAN JUNIOR STAN DING COUNSEL ASSESSEE BY: SHRI B. RAMAKRIS HNAN O R D E R PER BENCH : THESE BUNCH OF APPEALS BY THE REVENUE AND CROSS OB JECTIONS BY THE ASSESSEE ARISE OUT OF A COMMON ORDER PASSED BY THE LEARNED I.T.A. NOS.1277 TO 1283/MDS/10 C.O. NOS.77 TO 83/MDS/10 2 COMMISSIONER OF INCOME TAX (APPEALS)-I CHENNAI-34 DATED 2 ND APRIL 2010. 2. ON AN APPEAL FILED BY THE ASSESSEE-APPELLANT BEF ORE HIM ON THE ORDERS OF THE ASSESSING OFFICER UNDER SECTION 1 53A READ WITH SECTION 143(3) OF THE INCOME-TAX ACT 1961 (HEREINA FTER REFERRED TO THE ACT) DEMANDING INTEREST UNDER SECTION 234A AN D 234B OF THE ACT THE LD. CIT(APPEALS) HAD CONSIDERED THE ASSESS EES CONTENTION OF BELATED FILING OF THE APPEALS IN VIEW OF THE ASSESS EES PETITION AGAINST RECTIFICATION OF MISTAKE UNDER SECTION 154 OF THE A CT ON THE ISSUE OF CHARGING OF INTEREST UNDER SECTION 234A AND 234B OF THE ACT. THE LD. CIT(APPEALS) ADMITTED THE BELATED APPEALS FILED BY THE ASSESSEE ON THE PRETEXT THAT THE CHARGING OF INTEREST WAS A MIS TAKE APPARENT FROM RECORD WAS A BONAFIDE IMPRESSION WHICH THE ASSESSI NG OFFICER BY WAY OF IMPUGNED ORDER HAD DISMISSED THE ASSESSEES PETITIONS. THE DELAY OF 562 DAYS WAS THEREFORE CONDONED BY THE LD . CIT(APPEALS). 3. THE ASSESSEE HAD AGITATED THE LEVY OF INTEREST U NDER SECTION 234A AND 234B OF THE ACT. THE LD. CIT(APPEALS) DEL ETED THE LEVY OF INTEREST UNDER SECTION 234B ON THE BASIS OF FACTS A ND CIRCUMSTANCES BROUGHT ON RECORD BY THE ASSESSING OFFICER BUT CONF IRMED THE LEVY OF INTEREST UNDER SECTION 234A OF THE ACT. NOW THE R EVENUE IS AGITATING THE DELETION OF CHARGING OF INTEREST UNDER SECTION 234B IN THESE I.T.A. NOS.1277 TO 1283/MDS/10 C.O. NOS.77 TO 83/MDS/10 3 APPEALS BEFORE US VIS--VIS THE ASSESSEE-RESPONDENT HAS CROSS OBJECTED THE LEVY OF INTEREST UNDER SECTION 234A. 4. THE BRIEF FACTS ARE THAT THE ASSESSEE IS AN OPHT HALMOLOGIST WHO WAS SUBJECTED TO SEARCH AND WAS ASSESSED UNDER SECT ION 153A OF THE ACT FOR THE IMPUGNED ASSESSMENT YEARS. WHEN THE AS SESSEE- APPELLANT HAD OFFERED ADDITIONAL INCOME WHICH IN TH E FORM OF FIXED DEPOSITS WERE HELD AND ENCASHED BY THE DEPARTMENT A MOUNTED TO ` 40 LAKHS. THE ASSESSEE INDICATED THAT THE LEVY OF INTEREST UNDER SECTION 234B OF THE ACT THE PERIOD COMMENCING FROM ONE YEAR FROM THE END OF THE ASSESSMENT YEAR TILL THE ISSUANCE OF NOTICE UNDER SECTION 148 OF THE ACT HAS TO BE EXCLUDED TO THE E XTENT THAT THE ENCASHMENT OF FIXED DEPOSITS ON 27 TH MARCH 2007 WAS AGAINST THE DEMAND RAISED AND IT SHOULD HAVE BEEN CONSIDERED AS TAX PAID AGAINST THE ASSESSED INCOME WAS TO BE CONSIDERED FO R LEVY OF INTEREST FOR THE REMAINING PERIOD. FOR THE LEVY OF INTEREST UNDER SECTION 234A OF THE ACT THE ASSESSEE SUBMITTED BEFORE THE LD. C IT(APPEALS) AND THE ASSESSING OFFICER THAT THE NOTICE CALLING FOR F ILING OF RETURN UNDER SECTION 153A HAD INDICATED 15 DAYS PERIOD FOR FILIN G OF RETURN AGAINST WHICH THE ASSESSEE HAD APPLIED FOR EXTENSION OF TIM E FOR FILING RETURN BY THREE MONTHS. THE ASSESSEE DID FILE HIS RETURNS WITHIN THE TIME OF EXTENSION SOUGHT BEFORE THE A.O. BUT IT WAS CONSID ERED BY THE LD. CIT(APPEALS) THAT THE REQUIREMENTS OF LEVY OF INTER EST UNDER SECTION I.T.A. NOS.1277 TO 1283/MDS/10 C.O. NOS.77 TO 83/MDS/10 4 234A(3) OF THE ACT WHICH PROVIDES THAT WHERE A RETU RN OF INCOME FOR ANY ASSESSMENT YEAR REQUIRED BY A NOTICE UNDER SECT ION 153A IS FURNISHED AFTER THE EXPIRY OF THE TIME ALLOWED UNDE R SUCH NOTICE INTEREST WOULD BE LEVIED FOR EVERY MONTH OR PART OF A MONTH COMPRISED IN THE PERIOD COMMENCING FROM THE DATE IMMEDIATELY FOLLOWING THE EXPIRY OF THE TIME ALLOWED UNDER SECTION 153A TILL THE DATE OF FURNISHING OF RETURN. THE LD. CIT(APPEALS) CONSIDE RED THAT AS NO EXTENSION WAS GRANTED BY THE ASSESSING OFFICER THE DUE DATE FOR FILING OF RETURN WAS THE SAME AS MENTIONED IN THE N OTICE UNDER SECTION 153A ON WHICH THE ASSESSEE WAS LIABLE TO PAY INTERE ST UNDER SECTION 234A FROM THE EXPIRY OF DATE MENTIONED IN THE NOTIC E UNDER SECTION 153A TILL THE DATE OF FILING OF RETURNS I.E. THREE MONTHS AS HAS BEEN POINTED OUT BY THE ASSESSEE. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AT LENGTH AN D PERUSED THE MATERIAL AVAILABLE ON RECORD. THE LEARNED D.R. HAS BASICALLY ARGUED THE CONTENTION OF THE REVENUE THAT AS INDICATED BY THE LD. CIT(APPEALS) AND ALSO THE DEPARTMENT IN PURSUANCE OF NOTICE UNDER SECTION 153A IT WAS INDICATED BY THE ASSESSEE BY W AY OF LETTER DATED 16 TH JANUARY 2006 WHEN THE FIXED DEPOSITS WERE ENCASHE D BY THE DEPARTMENT. THEREFORE BY NO STRETCH OF IMAGINATIO N COULD BE CONSIDERED AS PAYMENT OF ADVANCE TAX. WHEN THE PER IODS COVERED WERE NOT INDICATED ON THE ENCASHMENT OF SUCH DEPOSI TS IN FAVOUR OF I.T.A. NOS.1277 TO 1283/MDS/10 C.O. NOS.77 TO 83/MDS/10 5 THE DEPARTMENT HE POINTED OUT THAT THE PROCEDURE F OR ADJUSTING THE DEMAND ON THE BASIS OF ASSESSED INCOME HAS TO BE BR OUGHT ON RECORD WHICH PROCEDURE CANNOT BE LOST SIGHT OF IN T HE WAIVER OF CHARGING OF INTEREST UNDER SECTION 234B OF THE ACT. HE POINTED OUT THAT THE LD. CIT(APPEALS) CONSIDERED THE ASSESSEE-A PPELLANTS SUBMISSION BEFORE HIM IN THE CONTEXT OF ADJUSTMENT OF SEIZED CASH ITAT CHENNAI BENCH HAD HELD IN THE CASE OF DR. V.V . VARADARAJAN V. ACIT IN I.T.A. NOS. 866 TO 870/MDS/2009 WHEN NO SPE CIFIC ADJUSTMENT AGAINST DEMAND RAISED COULD BE MADE THE ADJUSTMENT BY THE DEPARTMENT AGAINST THE EXISTING LIABILITY OUGHT TO HAVE BEEN CONSIDERED WAS ON THE BASIS OF THE PROCEDURE LAID D OWN IN RAISING DEMAND FOR CHARGING OF INTEREST UNDER SECTION 234B OF THE ACT. HE ARGUED THAT THE LD. CIT(APPEALS) HAD ERRED IN DIREC TING THE A.O. TO RE- COMPUTE THE INTEREST UNDER SECTION 234B OF THE ACT AFTER ADJUSTING THE AMOUNT PAID BY THE ASSESSEE ON ENCASHMENT OF FIXED DEPOSITS FROM THE DATE OF ENCASHMENT BY THE INVESTIGATION WING WH EN NO SPECIFIC ADJUSTMENT HAD BEEN MADE WAS TO BE CONSIDERED BY TH E INCOME-TAX AUTHORITIES EVEN AFTER SPECIFIC LETTER FROM THE ASS ESSEE FOR ENCASHMENT THEREOF. HE POINTED OUT THAT THE DATE O F ENCASHMENT OF DRAFTS AND CHEQUES IN THE P.D. ACCOUNT CANNOT BE TR EATED AS TAX PAID OTHERWISE AS PROVIDED UNDER SECTION 234B OF THE AC T. HE THEREFORE INSISTED THAT ASSESSING OFFICER COULD NOT MAKE ANY ADJUSTMENT AS I.T.A. NOS.1277 TO 1283/MDS/10 C.O. NOS.77 TO 83/MDS/10 6 HELD BY THE LD. CIT(APPEALS) IN THE ABSENCE OF VALI D DEMAND FOR THE PARTICULAR ASSESSMENT YEAR FOR INCORPORATING THE LE VY OF INTEREST AS PER THE ASSESSED INCOME AND PRESCRIBED UNDER SECTION 15 3A READ WITH SECTION 143 OF THE ACT. 6. THE LEARNED COUNSEL FOR THE ASSESSEE IN REPLY T O THE REVENUES AGITATION SUBMITTED THAT CHARGING OF INTEREST UNDE R SECTION 234B OF THE ACT IS MANDATORY WHICH IS NOT DISPUTED BY THE A SSESSEE. IT WAS SUBMITTED BY THE ASSESSEE BEFORE THE LD. CIT(APPEAL S) THAT WHEN THE AMOUNTS SEIZED BY THE DEPARTMENT AND THE DEMAND WAS RAISED UNDER SECTION 153A OF THE ACT THE LAW CLEARLY PROVIDES T HAT THE AMOUNT SO SEIZED AND ADJUSTED AGAINST TAX LIABILITY HAS TO BE GIVEN CREDIT FOR THE LEVY OF INTEREST UNDER SECTION 234B OF THE ACT AND WHICH WAS CONSIDERED BY THE LD. CIT(APPEALS) IN ACCORDANCE WI TH THE PROVISIONS OF LAW. HE RELIED ON THE DECISION OF ITAT CHENNAI BENCH B IN THE CASE OF DR. V.V. VARADARAJAN (SUPRA) A COPY OF WHI CH WAS PLACED ON RECORD WHEREIN IT WAS CONSIDERED AT LENGTH THAT EV EN IF THE ASSESSEE HAS NOT MADE ANY SPECIFIC REQUISITION FOR ADJUSTMEN T OF LIABILITIES THE DEPARTMENT WAS FREE TO ADJUST THE SEIZED CASH AGAIN ST THE TAX LIABILITIES INCLUDING INTEREST AND PENALTY. ONCE T HE ADJUSTMENT IS MADE AGAINST THE ASSESSED TAX THE LEVY OF INTEREST HAS TO BE ON THE BASIS OF LAW THAT IS CLEARLY PROVIDED IN THE SAID SECTION W AS TO BE FOLLOWED IN VIEW OF THE FACT THAT THE PROCEDURAL DELAYS WOULD N OT MAR THE LEVY OF I.T.A. NOS.1277 TO 1283/MDS/10 C.O. NOS.77 TO 83/MDS/10 7 INTEREST UNDER THAT SECTION. WE BELIEVE THAT THE L D. JUNIOR STANDING COUNSEL HAS INDICATED THE INABILITY OF ADJUSTMENT O F SEIZED CASH ADJUSTED AGAINST LIABILITIES HAS TO BE IN A PROCEDU RE WHICH WOULD IN ANY CASE NOT INDICATE THAT THE AMOUNT HAD ACTUALLY ENTERED THE GOVERNMENT CORPUS ON A PARTICULAR DATE WHICH AMOUNT COULD NOT BE CONSIDERED HAVING BEEN ENJOYED BY THE ASSESSEE-APPE LLANT FOR LEVY OF INTEREST UNDER SECTION 234B OF THE ACT. THEREFORE ON THE SOLITARY ISSUE OF SECTION 234B WHICH THE LD. CIT(APPEALS) HA S DIRECTED THE ASSESSING OFFICER TO RE-COMPUTE ON THE BASIS OF SEI ZED ASSET ADJUSTED WAS IN THE LINE OF FIRST-CUM-FIRST BASIS TO BE ADJU STED BY THE ASSESSING OFFICER FOR LEVY OF INTEREST IN OUR VIEW WAS APPR OPRIATE. IN VIEW OF THIS THE APPEALS FILED BY THE REVENUE ARE BOUND TO BE DISMISSED ON THE FACTS AND CIRCUMSTANCES AS NARRATED ABOVE. 7. ON THE CROSS OBJECTIONS OF THE ASSESSEE-APPELLAN T WITH RESPECT TO THE LEVY OF INTEREST UNDER SECTION 234A WE ARE OF THE CONSIDERED VIEW THAT BEING A MANDATORY LEVY AND THE FACT THAT THE ASSESSEE DID NOT FILE THE RETURNS IN ACCORDANCE WITH THE NOTICE ISSUED BY THE ASSESSING OFFICER UNDER SECTION 153A OF THE ACT TH E ASSESSEE COULD NOT HAVE AGREED TO THE PROPOSITION THAT THE TIME SO UGHT FOR FILING OF RETURNS HAD BEEN EXCEEDED THE TIME GIVEN BY THE ASS ESSING OFFICER. THE ASSESSING OFFICER THEREFORE WAS JUSTIFIED FOR THE LEVY OF INTEREST UNDER SECTION 234A FOR THE PERIOD WHICH HE HAD NOT NOTIFIED. THE LD. I.T.A. NOS.1277 TO 1283/MDS/10 C.O. NOS.77 TO 83/MDS/10 8 CIT(APPEALS) IS THEREFORE JUSTIFIED IN HOLDING TH AT THE ACTION OF THE ASSESSING OFFICER IN LEVY OF INTEREST UNDER SECTION 234A OF THE ACT FOR THE ASSESSMENT YEARS 2000-01 TO 2006-07 WAS JUSTIFI ED AND IN ACCORDANCE WITH LAW. THE LEVY OF INTEREST UNDER SE CTION 234B RE- COMPUTATION IN NO WAY WAS AFFECTED THE COMPUTATION OF INTEREST UNDER SECTION 234A OF THE ACT IN VIEW OF THE FACT THAT TH E SAME IS CHARGEABLE ON THE BASIS OF ASSESSED INCOME. THE CROSS OBJECTI ONS FILED BY THE ASSESSEE ON THIS SCORE ARE THEREFORE BOUND TO BE D ISMISSED. 8. IN THE RESULT THE APPEALS FILED BY THE REVENUE ARE DISMISSED AND THE CROSS OBJECTIONS BY THE ASSESSEE ALSO STAND DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT AFTER CONCLUSION OF HEARING ON THE TWENTIETH DAY OF OCTOBER 2010. SD/- SD/- (HARI OM MARATHA) (K.K. GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI DATED THE 20 TH OCTOBER 2010. KRI. COPY FORWARDED TO: (1) ASSESSEE (2) ASSESSING OFFICER (3) CIT(A)-I CHENNAI-34 (4) CIT CENTRAL-I CHENNAI (5) D.R. (6) GUARD FILE