M/s Kanyaka Parameswari Engg.Ltd.,, Hyderabad v. ACIT, Hyderabad

ITA 1096/HYD/2009 | 2000-2001
Pronouncement Date: 09-04-2010 | Result: Dismissed

Appeal Details

RSA Number 109622514 RSA 2009
Assessee PAN AAACK8360N
Bench Hyderabad
Appeal Number ITA 1096/HYD/2009
Duration Of Justice 5 month(s) 2 day(s)
Appellant M/s Kanyaka Parameswari Engg.Ltd.,, Hyderabad
Respondent ACIT, Hyderabad
Appeal Type Income Tax Appeal
Pronouncement Date 09-04-2010
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 09-04-2010
Date Of Final Hearing 31-01-2011
Next Hearing Date 31-01-2011
Assessment Year 2000-2001
Appeal Filed On 06-11-2009
Judgment Text
SX IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A HYDERABAD BEFORE SHRI G.C.GUPTA VICE-PRESIDENT AND SHRI AKBER BASHA ACCOUNTANT MEMBER ITA NO.1096/HYD/2009 : ASST. YEAR 2000- 01 M/S. KANYAKA PARAMESWARI ENGG. LTD. HYDERABAD. (PAN - AAACK8360N) VS ACIT CENTRAL CIRCLE-6 HYDERABAD. (APPELLANT) (RESPONDENT) APPELLANT BY : SRI C.P.RAMASWAMY RESPONDENT BY : SHRI. K.V.N. CHARYA O R D E R PER AKBER BASHA ACCOUNTANT MEMBER: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDE R OF THE CIT(A)-I HYDERABAD DATED 25-8-2009 AND IT RELAT ES TO THE ASSESSMENT YEAR 2000-01. 2. FOLLOWING ARE THE GROUNDS OF APPEAL TAKEN BY THE ASSESSEE IN THE PRESENT APPEAL- '1. THE ORDER OF THE LEARNED CIT(A) IS AGAINST LAW WEIGHT OF EVIDENCE AND PROBABILITIES OF THE CASE. 2. THE LEARNED CIT(A) GROSSLY ERRED IN IGNORING TH E BINDING DECISION OF THE APEX COURT THAT WHERE INTEREST WAS NOT LEVIA BLE TAKEN THE INTEREST LEVY CAN BE APPEALED AGAINST AND CONSEQUEN TLY THE CIT(A) ERRED IN DISMISSING THE APPEAL. 3. THE LEARNED CIT(A) FAILED TO APPLY THE BINDING DECI SION OF THE HON'BLE ITAT IN THE CASE OF DATAMATICS CORPORATION 299 ITR (AT) 286 MUMBAI WHICH IS ON ALL FOURS ON THE FACTS OF T HIS APPEAL. 2 4. FOR THE ABOVE GROUNDS AND SUCH OTHER GROUNDS THAT M AY BE URGED AT THE TIME OF HEARING THE ASSESSEE PRAYS THAT THE APPEAL BE ALLOWED.' 3. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE ASSESSEE COMPANY ENGAGED IN THE BUSINESS OF MANUFACTURE OF LPG CYLINDERS HAD FILED THEIR RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER CONSIDERATI ON ON 30-11- 2000 ADMITTING A TAXABLE INCOME OF RS.1 85 83 063. S UBSEQUENTLY A SEARCH UNDER S.132 OF THE ACT WAS CONDUCTED IN THE ASSESSEE'S CASE AND CERTAIN INCRIMINATING MATERIALS EVIDENCING UNDISCLOSED IN COME HAD BEEN FOUND AND SEIZED. BLOCK ASSESSMENT PROCEEDINGS FOR THE BL OCK PERIOD 1997-98 TO 2002-03 AND FOR THE PERIOD 1-4-2002 TO 9 -10-2002 WAS COMPLETED ON 17-3-2005 DETERMINING THE TOTAL UNDISCLO SED INCOME OF RS.7 29 51 000 AND IN THE SAID BLOCK ASSESSMENT AN ADDITIO N OF RS.1 67 48 192 WAS MADE TOWARDS DOUBLE ENTRY OF PURCHASE MADE BY THE ASSESSEE. APPARENTLY THE ASSESSEE COMPANY HAD MADE THE ENTRY OF THIS PURCHASE TWICE IN ITS BOOKS OF ACCOUNT ONCE IN THE MO NTH OF MARCH 2000 AND AGAIN IN THE MONTH OF APRIL 2000 RELEVANT TO THE FINANCIAL YEAR 1999-2000 AND 2000-01 RESPECTIVELY. DURING THE APPEL LATE PROCEEDINGS AGAINST THE BLOCK ASSESSMENT FILED BY THE ASSESSEE THE ASSESSE E CLAIMED THIS ADDITION SHOULD HAVE BEEN CONSIDERED IN THE REGULAR ASSESSMENT FOR THE ASSESSMENT YEAR 2000-01 AND NOT IN THE B LOCK ASSESSMENT. HOWEVER THE FIRST APPELLATE AUTHORITY DECIDE D THE GROUND AGAINST THE ASSESSEE. IN VIEW OF THE STAND TAKEN BY T HE ASSESSEE DURING THE APPELLATE PROCEEDINGS THE ASSESSING OFFICER RE OPENED THE ASSESSMENT UNDER SECTION 147 OF THE ACT ON THE GROUND THAT INCOME CHARGEABLE TO TAX TO THE TUNE OF RS.1 67 48 192 HAD E SCAPED ASSESSMENT IN THE ASSESSMENT YEAR 2000-01. IN RESPONSE TO TH E NOTICE UNDER SECTION 148 THE ASSESSEE COMPANY FILED ITS RETURN OF INCOME ADMITTING TAXABLE INCOME OF RS.3 53 01 260 WHICH INCLU DED THE AMOUNT OF RS.1 67 48 192 BEING THE DOUBLE ENTRY OF PURCHASE A ND THE ASSESSING OFFICER COMPLETED THE ASSESSMENT ON THE BASIS OF THE RETURN FILED BY THE 3 ASSESSEE AS MENTIONED IN THE ORDER OF THE CIT(A). WHILE COMPUTING THE TAX PAYABLE THE ASSESSING OFFICER LEVIED INTEREST UNDER SECTION 234B AND ALSO INTEREST UNDER SECTION 234D AND A NET DEMAND OF RS. 99 99 782 WAS RAISED. BEFORE THE FIRST APPELLATE AUTHORITY IT WAS CONTENDED THAT THE ASSESSING OFFICER ERRED IN LEVYING INTEREST UNDER SECTION 2 34B(3) FOR A SUM OF RS.28 76 679 WHEN THE ORIGINAL ASSESSMENT UNDER SECT ION 143(3) WAS COMPLETED WITHOUT ANY LEVY OF INTEREST UNDER SECTION 234B(1) AND THE SAME RESULTED IN A REFUND OF RS.17 20 717 AND THE ENTIRE LEVY OF INTEREST UNDER SECTION 234B(3) SHOULD THEREFORE BE DELE TED AND IT WAS FURTHER CONTENDED THAT THE ASSESSING OFFICER WAS NOT JUSTI FIED IN LEVYING INTEREST U/S 234D FOR A SUM OF RS.4 84 893 WHEN THE ENT IRE REFUND OF RS.17 20 717 WAS GRANTED FROM REGULAR ASSESSMENT ONLY AND IT IS NOT THE FIRST TIME AN ASSESSMENT MADE UNDER SECTION 147 FOR T HE IMPUGNED ASSESSMENT YEAR. AGGRIEVED AGAINST THE LEVY OF INTEREST U/S 234B AND 234D BY THE ASSESSING OFFICER THE ASSESSEE WENT IN APPEAL BEFORE THE LEARNED CIT (A). 4. THE CIT (A) AFTER CONSIDERING THE FACTS AND THE CIRCU MSTANCES OF THE CASE HE HELD THAT THE ASSESSEE IS LIABLE TO ADVANCE TA X AND CONSEQUENTLY THE LEVY OF INTEREST U/S 234B BY THE ASSESSI NG OFFICER IS VALID AND THE GROUND RAISED BY THE ASSESSEE IN THIS REGAR D WAS DISMISSED. THE OTHER GROUND RELATES TO LEVY OF INTEREST UNDER SECTION 234D OF THE ACT. THE CIT(A) HELD THAT THE LEVY OF I NTEREST UNDER SECTION 234D IS CONSEQUENTIAL TO THE LEVY OF INTEREST U/S 234B A ND THE TAX PAID ORIGINALLY BY THE ASSESSEE WAS REFUNDED AND IT IS BUT NA TURAL THAT THE ASSESSEE HAS TO PAY INTEREST U/S 234D OF THE ACT. IN VIEW OF THE ABOVE THIS GROUND OF THE ASSESSEE WAS ALSO DISMISSED BY THE CIT (A) 5. AGGRIEVED AGAINST THE ORDER OF THE CIT (A) THE A SSESSEE IS IN APPEAL BEFORE US. 4 6. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LEVY OF INTEREST UNDER S.234B OF THE ACT BY THE ASSESSING OFFICER IS NOT JUSTIFIED IN VIEW OF THE FACT THAT THE SAME WAS NOT LEVIED IN TH E ASSESSMENT ORDER UNDER S.143 [1] OF THE ACT OR IN THE ORIGINAL ASSESSMEN T MADE UNDER S.143[3] OF THE ACT AND HENCE IT IS NOT LIABLE FOR IN TEREST UNDER S.234B[3] OF THE ACT. THE FIRST APPELLATE AUTHORITY F AILED TO APPLY THE BINDING DECISION OF THE ITAT MUMBAI IN THE CASE OF DAT AMATICS CORPORATION REPORTED IN 299 ITR 286 [AT] AND IT IS SU BMITTED THAT WHERE INTEREST WAS NOT LEVIABLE THEN THE INTEREST LEVY CAN B E APPEALED AGAINST AND HENCE THE CIT [A] IS ERRED IN DISMISSING THE APPEAL OF THE ASSESSEE. 7. ON THE OTHER HAND THE LEARNED DR BY SUPPORTING THE ORDERS OF THE AUTHORITIES BELOW SUBMITTED THAT THE ASSESSEE NOT DISCLOSED THE CORRECT INCOME IN ITS RETURN. IT IS ADMITTED BY THE ASSESSEE THA T TAHERE WAS A DOUBLE ENTRY OF PURCHASE AMOUNTING TO RS.1 67 48 192 R ESULTING IN LOWER INCOME FORE THE ASSXESDSMENT YEAR UNDER CONSIDERATION. IT CANNOT BE SAID THAT THERE WAS NO DEFAULT ON THE PART OF THE ASSE SSEE IN PAYING TAHE CORRECT AMOUNT OF ADVANCAE TAX AT THE TIME OF FIL ING THE RETURNS. THE ASSESSEE SHOULD HAVE TAKEN DUE DILIGENCE AND CARE IN P AYING TAHE TAXES. IT IS NOT THE CASE OF THE ASSESSEE THAT THE LIABILI TY TO PAY TAX HAS RESULTED FOR REASONS BEYOND THE CONTROL OF THE ASSESSEE OR SUBSEQUENT DECISIONS OF THE HIGH COURTS OR SUPREME COURT OR SUBSEQUEN T AMENDMENT OF THE ACT ETC. IF THE STAND WAS ACCEPTED IT WOULD DEFEAT THE VERY PURPOSE OF ADVANCE TAX PROVISIONS AND LEVY OF TAX UNDER SECTION 234 OF THE ACT. HENCE THE LOWER AUTHORITIES ARE RIGHT IN L EVYING THE INTEREST UNDER SECTION 234B AND 234D OF THE ACT. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF THE PARTIE S AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS AN A DMITTED FACT THAT THE ASSESSEE HAD NOT DISCLOSED THE CORRECT INCOME WHILE FILING TH E RETURN OF INCOME ON ACCOUNT OF DOUBLE ENTRY OF PURCHASE AMOUNTING TO 5 RS.1 67 48 192 WERE FOUND ONLY DURING THE ASSESSMENT PR OCEEDINGS. IT IS ALSO NOT THE CASE OF THE ASSESSEE THAT THE LIABILITY TO PAY THE ADVANCE TAX RESULTED DUE TO THE SUBSEQUENT AMENDMENT OF THE ACT OR PRONOUNCEMENT OF THE DECISIONS BY THE HIGHER COURTS. IT IS DUTY OF THE TAX PAYER TO PAY THE ADVANCE TAX ON CORRECT ESTIMATED I NCOME. IN OUR CONSIDERED OPINION THE ASSESSEE WAS IN DEFAULT IN NOT PAY ING THE ADVANCE TAX ON THE CORRECT INCOME WHICH HAS BEEN DISCLOSED SUBSEQUENTLY IN THE REASSESSMENT PROCEEDINGS. WE DO NOT SE E ANY INFIRMITY IN THE ORDER OF THE FIRST APPELLATE AUTHOR ITY IN CONFIRMING THE LEVY OF INTEREST U/S 234B OF THE ACT WHICH IS MONETARY IN NATURE. THE CASE LAW RELIED ON BY THE LEARNED COUNSEL FOR THE ASSESSE E IS NOT APPLICABLE TO THE CASE ON HAND SINCE TAHERE IS NO BONAFID E MISTAKE ON THE PART OF THE ASSESSEE IN NOT PAYING THE TAX ON CORRECT INCOME. SINCE WE HELD THAT THE LEVY OF INTEREST U/S 234B IS CORRECT O R JUSTIFIED THE LEVY OF INTEREST U/S 234D IS CONSEQUENTIAL TO THE LEVY OF INT EREST U/S 234B OF THE ACT AND THEREFORE ON BOTH THE COUNTS THE ASSESSEE FAI LS. IN VIEW OF THE ABOVE WE CONFIRM THE ORDERS OF THE AUTHORITIES BE LOW. 9. IN THE RESULT ASSESSEE'S APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 9-04-2010. SD/- G.C.GUPTA SD/- AKBER BASHA VICE PRESIDENT ACCOUNTANT MEMBER. DT/- 9TH APRIL 2010 6 COPY FORWARDED TO: 1. C/O DR. C.P. RAMASWAMY ADVOCATE FLAT NO.303 G ITANJALI APARTMENTS PLOT NO.108 SRINAGAR COLONY HYDERABAD. 2 THE ACIT CENTRAL CIR-6 HYDERABAD. 3. 4. CIT (A)-I HYDERABAD. CIT AP HYDERABAD. 5. THE DEPARTMENTAL REPRESENTATIVE ITAT HYDERABAD. JMR