The catholic Syrian Bank Ltd, Trichur v. The ACIT, Trichur

ITA 324/COCH/2014 | 2002-2003
Pronouncement Date: 21-11-2014

Appeal Details

RSA Number 32421914 RSA 2014
Assessee PAN AABCT0024D
Bench Cochin
Appeal Number ITA 324/COCH/2014
Duration Of Justice 4 month(s) 17 day(s)
Appellant The catholic Syrian Bank Ltd, Trichur
Respondent The ACIT, Trichur
Appeal Type Income Tax Appeal
Pronouncement Date 21-11-2014
Appeal Filed By Assessee
Bench Allotted DB
Tribunal Order Date 21-11-2014
Date Of Final Hearing 13-11-2014
Next Hearing Date 13-11-2014
Assessment Year 2002-2003
Appeal Filed On 04-07-2014
Judgment Text
IN THE INCOME TAX APPELLATE TRI BUNAL COCHIN BENCH CO CHIN BEFORE S/SHRI N.R.S.GANESAN JM AND CHANDRA POOJ ARI AM I.T.A. NOS. 320-325 /COCH/2014 ASSESSMENT YEARS : 1998-99-2003-04 THE CATHOLIC SYRIAN BANK LTD. ST. MARYS COLLEGE ROAD THRISSUR-680 020. [PAN:AABCT 0024D] VS. 1.THE ASSISTANT COMMISSIONER OF INCOME-TAX CIRCLE-1(1) THRISSUR. 2. THE ASSISTANT COMMISSIONER OF INCOME-TAX CIRCLE-1 THRISSUR. 3. THE DEPUTY COMMISSIONER OF INCOME-TAX CIRCLE1 THRISSUR. (ASSESSEE-APPELLANT) (REVENUE-RESPONDENT) ASSESSEE BY SHRI C. NARESH CA REVENUE BY SHRI M. ANIL KUMAR CIT(DR) DATE OF HEARING 13/11/2014 DATE OF PRONOUNCEMENT 21/11/2014 O R D E R PER CHANDRA POOJARI ACCOUNTANT MEMBER: ALL THESE APPEALS FILED BY THE ASSESSEE ARE DIRECTE D AGAINST DIFFERENT ORDERS PASSED BY THE CIT(A)-V KOCHI FOR THE ASSES SMENT YEARS 1998-99 TO 2003-04. 2. SINCE THE ISSUES IN THESE APPEALS ARE IDENTICAL IN NATURE THESE WERE CLUBBED TOGETHER HEARD TOGETHER AND ARE BEING DISP OSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. I.T.A. NOS.320-325/COCH/2014 2 3. THE FIRST COMMON GROUND IN ALL THESE APPEALS IS WITH REGARD TO SHORT GRANTING OF INTEREST UNDER SECTION 244A OF THE ACT. IN THESE CASES THE ASSESSEES GRIEVANCE IS THAT THE ASSESSING OFFICER FAILED TO GIVE PROPORTIONATE INTEREST AS ENUMERATED UNDER SECTION 244A OF THE AC T AND THE ASSESSING OFFICER HAS WRONGLY FOUND THAT THE ASSESSEE HAS CLAIMED INT EREST ON INTEREST. ACCORDING TO THE ASSESSEE THE REFUND GIVEN BY THE DEPARTMENT IS TO BE FIRST ADJUSTED TOWARDS INTEREST DUE TO THE ASSESSEE ON REFUND AND THEREAFTER IT MAY BE ADJUSTED TOWARDS TAX DUE TO THE ASSESSEE AS REFUNDA BLE. ON THE OTHER HAND IN THIS CASE THE ASSESSING OFFICER FIRST ADJUSTED THE REFUND GIVEN BY THE DEPARTMENT TOWARDS TAX REFUND DUE TO THE ASSESSEE INSTEAD OF A DJUSTING THE SAME TOWARDS INTEREST DUE TO THE ASSESSEE. 4. ON THE OTHER HAND THE LD. DR SUBMITTED THAT THE ASSESSEES RELIANCE ON THE ORDER OF THE ITAT COCHIN BENCH IN ITS OWN CASE IN I.T.A. NO. 919/COCH/2007 DATED 30-06-2009 FOR THE ASSESSMENT YEAR 2008-09 R ELYING ON THE JUDGMENT OF THE SUPREME COURT IN THE CASE OF SANDVIK ASIA LTD. VS. CIT (280 ITR 643) IS NO LONGER APPLICABLE TO THE FACTS OF THESE APPEALS IN VIEW OF THE SUBSEQUENT JUDGMENT OF THE SUPREME COURT IN THE CASE OF CIT VS . GUJARAT FLOURO CHEMICALS LTD. (358 ITR 291) WHEREIN IT HAS BEEN HELD THAT TH E DECISION IN THE CASE OF SANDVIK ASIA LTD. DOES NOT LAY DOWN THE CORRECT LAW . HENCE IN VIEW OF THE ORDER DATED 04-07-2014 OF THE ITAT COCHIN BENCH IN THE C ASE OF DR. R.P. PATEL IN I.T.A. NOS.320-325/COCH/2014 3 I.T.A. NO. 114/COCH/2014 DATED 04-07-2014 WHEREIN T HE DECISIONS OF THE SUPREME COURT IN THE CASES OF SANDVIK ASIA LTD. AND GUJARAT FLUORO CHEMICALS THE ORDER OF THE LOWER AUTHORITIES MAY BE UPHELD AN D ALL THE APPEALS OF THE ASSESSEE MAY BE DISMISSED. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ECORD. WE FIND FORCE IN THE ARGUMENT OF THE LD. AR. WHEN ANY REFUND IS MADE TO THE ASSESSEE IT IS FIRST TO BE ADJUSTED TOWARDS INTEREST PAYABLE TO THE ASSE SSEE THEREAFTER THE BALANCE IS TO BE ADJUSTED TOWARDS TAX REFUNDABLE TO THE ASS ESSEE. BEING SO WE REMIT THE ENTIRE ISSUE BACK TO THE FILE OF THE ASSESSING OFFI CER TO RE-COMPUTE THE REFUNDABLE AMOUNT OF TAX AND INTEREST IN THE LIGHT OF THE DECI SION OF THE SUPREME COURT IN THE CASE OF CIT VS. GUJARAT FLUORO CHEMICALS (358 I TR 291) TO ENSURE THAT THE ASSESSEE SHALL NOT BE GRANTED INTEREST ON INTEREST. 6. THE FIRST GROUND IN I.T.A. NO. 324/COCH/2014 I S WITH REGARD TO GRANTING OF INTEREST UNDER SECTION 244A OF THE ACT ON SELF ASSE SSMENT TAX PAID UNDER SECTION 140AOF THE ACT. THIS ISSUE CAME UP FOR CONSIDERA TION BEFORE THIS TRIBUNAL IN I.T.A. NO. 880/COCH/2006 IN ASSESSEESOWN CASE VIDE ORDER DATED 28-07-2006 WHEREIN THE CLAIM OF THE ASSESSEE WAS ALLOWED BY OB SERVING AS UNDER: 5. WE HAVE HEAR THE LD. AUTHORISED REPRSENTATIVE S HRI JOSE POTTOKARAN FOR THE ASSESSEE AND THE LD. SR. DEPARTMENTAL REPRESENT ATIVE SHRI V. SREEKUMAR FOR THE REVENUE. IN THIS CASE THE FACTS ARE NOT D ISPUTED THAT THE ASSESSEE IS ELIGIBLE FOR REFUND OF RS.4 99 23 510/-. IT APPEAR S THAT THE CIT(A) WAS OF THE I.T.A. NOS.320-325/COCH/2014 4 OPINION THAT AS THE REFUND IS ARISING TO THE ASSESS EE BANK DUE TO EXCESS PAYMENT OF THE SELF ASSESSMENT TAX AND HENCE THE A SSESSING OFFICER DID NOT GRANT INTEREST U/S. 244A OF THE ACT TO THE ASSESSEE . 6. AN IDENTICAL ISSUE HAS COME UP FOR CONSIDERATIO N OF THE ITAT MUMBAI BENCH B IN THE CASE OF ADDL. CIT VS. GRINDWELL NO RTON LTD. (2006) 100 ITD 245 (MUM). IN THAT CASE ALSO THE RETURN OF INCOME FILED BY THE ASSESSEE WAS PROCESSED U/S. 143(1)(A) OF THE ACT AND NO INTEREST U/S. 244A WAS ALLOWED BY THE ASSESSING OFFICER. THE REFUND WAS ARISING DUE TO THE EXCESS PAYMENT OF SELF-ASSESSMENT TAX. AFTER EXAMINING THE LEGISLATI VE HISTORY OF SECTION 244A WHICH WAS BROUGHT ON THE STATUTE BOOK FROM THE ASSE SSMENT YEAR 1989-90 IN PLACE OF SECTIONS 214 243 AND 244 IT WAS HELD THA T THE ASSESSEE IS ENTITLED TO INTEREST U/S. 244A OF THE ACT ON THE EXCESS SELF -ASSESSMENT TAX PAID U/S. 140A OF THE ACT AND OBSERVED AS UNDER: IN SUB-SECTION (1) TO SECTION 244A WHERE REFUND OF ANY AMOUNT BECOMES DUE TO THE ASSESSEE IT IS STIPULATED THAT IN ADDIT ION TO THE REFUND THE ASSESSEE SHALL BE ENTITLED TO RECEIVE INTEREST ON T HE SAID REFUND UNDER CLAUSE (A) TO SUB-SECTION (1) OF SECTION 244A OF THE ACT INTEREST SHALL BE PAYABLE ON THE REFUND OF TAX DEDUCTED AT SOURCE OR ADVANCE TAX PAID BY THE ASSESSEE AND IN CLAUSE (B) TO SUB-SECTION (1) TO SECTION 244A T HE INTEREST SHALL BE PAID ON REFUND OF TAX OTHER THAN ADVANCE TAX OR TDS. THE EX PLANATION APPENDED TO CLAUSE (B) TO SECTION 244A CLARIFIES THE DATE OF PA YMENT OF TAX OR PENALTY. THE BINDING EFFECT OF THE CIRCULAR ON THE REVENUE H AS BEEN CLARIFIED BY THE HONBLE SUPREME COURT IN THE CASE OF NAVNITLAL C.JA VERI (SUPRA) AND IN THE CASE OF PAPER PRODUCTS LTD. (SUPRA). THE LIMITED Q UESTION FOR ADJUDICATION IS WHETHER THE EXPLANATION APPENDED TO CLAUSE (B) TO SE CTION 244A(1) LIMITS THE ALLOWABILITY OF INTEREST ON THE PAYMENTS MADE OTHER THAN TDS AND ADVANCE TAX. THEIR LORDSHIPS OF THE HONBLE SUPREME COURT I N THE CASE OF S.SUNDARAM PILLAI (SUPRA) HAVE CONSIDERED THE IMPACT OF THE EL ABORATELY DEALT WITH THE MATTER HOLDING THAT THE THE WORD AMBIGUITY WHICH M AY HAVE ARISEN IN THE STATUTORY PROVISIONS OF THE ACT AND HAVE ITSELF SHO WS IT IS MERELY MEANT TO EXPLAIN OR CLARIFY CERTAIN PROVISIONS. IN THE PRE SENT CASE THE ASSESSEE HAD CLAIMED THE INTEREST ON EXCESS PAYMENT OF SELF-ASSE SSMENT TAX U/S. 140A OF THE ACT. IN ACCORDANCE WITH THE PROVISIONS OF CLAU SE (B) TO SECTION 244A(1) OF THE ACT INTEREST IS PAYABLE ON SUCH PAYMENTS OF TA X. WE DO NOT AGREE WITH THE CONTENTION OF THE ASSESSING OFFICER WITH REGARD TO APPLICABILITY OF PROVISIONS OF EXPLANATION TO CLAUSE (B) TO SECTION 2 44A(1) OF THE ACT. THE PROVISIONS OF THE STATUTE ARE TO BE GIVEN ITS FULL EFFECT AND IN THE INSTANT CASE ONCE THE RETURN HAS BEEN PROCESSED U/S. 143(1)(A) A ND REFUND IS DETERMINED AS PAYABLE TO THE ASSESSEE. THE PROVISIONS OF THE ACT CLEARLY PROVIDE THAT IN ADDITION THE INTEREST IS PAYABLE ON SUCH SUMS WHIC H ARE HELD AND UTILIZED BY THE GOVERNMENT OVER AND ABOVE THE TAX DUES OF THE A SSESSEE UNDER THE PROVISIONS OF THE INCOME-TAX ACT. ACCORDINGLY IN ADDITION TO THE REFUND OF I.T.A. NOS.320-325/COCH/2014 5 THE MONEY THE ASSESSEE WAS ENTITLED TO RECEIVE INTE REST ON THE SAID EXCESS AMOUNT PAID BY HIM. WE FIND SUPPORT FROM THE DECIS ION OF THE MUMBAI BENCH IN THE CASE OF THE ASSESSEE ITSELF FOR ASSESSMENT Y EAR 1997-98 AND ALSO IN THE CASE OF NOVARTIS INDIA LTD. (BOTH CITED SUPRA) WHIC H IN TURN RELIED ON THE DECISION OF THE CALCUTTA BENCH IN THE CASE OF HOOGH LY MILLS CO. LTD. VS. DY. CIT (2000) 74 ITD 309 WHEREIN IT HAS BEEN HELD AS UNDER: THE MATTER MIGHT BE LOOKED INTO FROM ANOTHER ANGLE ALSO. THE INTREST WAS REQUIRED TO BE PAID BY THE GOVERNMENT TO THE ASSESS EE FOR HOLDING UTILIZING THE EXCESS MONEY PAID BY THE ASSESSEE OVER AND ABOV E ITS TAX DUES. IN THE INSTANT CASE THE ASSESSEE HAD PAID MUCH MORE SELF- ASSESSMENT TAX THAN WAS REQUIRED UNDER THE RELEVANT PROVISIONS OF LAW. ALTHOUGH THEREFORE THE PAYMENT HAD BEEN CLAIMED BY THE ASSESSEE AND ALSO C ONSIDERED BY THE DEPARTMENTAL AUTHORITIES TO BE SELF-ASSESSMENT TAX ACTUALLY THE SAME WAS NOT EXACTLY OF THE NATURE OF SELF-ASSESSMENT TAX. THE AMOUNT WHICH THE ASSESSEE WAS REQUIRED TO PAY IN ADDITION TO THE TAX DEDUCTED AT SOURCE TO MEET UP THE TAX LIABILITY ARISING OUT OF THE RETURN SHOULD ALONE BE CONSIDERED AS SELF-ASSESSMENT TAX. THE BALANCE AMOUNT OF TAX HAVING NO IMMEDIATE CONNECTION WITH THE RETURN OF INCOME WAS ENJOYED BY THE GOVERNMENT FOR A NUMBER OF MONTHS. IT WAS THEREFORE FAIR AND EQUI TABLE ON THE PART OF THE GOVERNMENT TO PAY INTEREST ON THE SAME TO THE ASSES SEE WHEN THIS EXCESS AMOUNT WAS REFUNDED TO THE ASSESSEE. 7. RESPECTFULLY FOLLOWING THE PRINCIPLES LAID DOWN IN THE CASE OF GRINDWELL NORTON LTD. (SUPRA) WE HOLD THAT THE ASS ESSEE IS ELIGIBLE FOR INTEREST U/S. 244A OF THE ACT ON THE AMOUNT OF RS.4 99 23 510/-. WE THEREFORE DIRECT THE ASSESSING OFFICER TO GRANT IN TEREST TO THE ASSESSEE U/S. 244A ON THE SAID AMOUNT AS PER THE PROVISIONS OF LA W. WE THEREFORE SET ASIDE THE ORDER OF THE CIT(APPEALS). 8. IN THE RESULT THE ASSESSEES APPEAL STANDS ALLO WED. 7. IN VIEW OF THE ABOVE ORDER OF THE TRIBUNAL WE A LLOW THE GROUND TAKEN BY THE ASSESSEE ON SIMILAR LINES. . 8. THE NEXT GROUND IN I.T.A. NO. 325/COCH/2014 IS W ITH REGARD TO LEVY OF INTEREST UNDER SECTION 234C OF THE ACT FOR THE PERI OD OF DEFAULT ONLY AND NOT FOR THE ENTIRE PERIOD OF THREE MONTHS. I.T.A. NOS.320-325/COCH/2014 6 9. THE LD. AR RELIED ON THE ORDER OF DECISION OF TH E MUMBAI BENCH IN THE CASE OF PANTHER INVESTRADE LTD. VS. DCIT (2007) 160 TAXMAN 203 (MUM.). 10. THE LD. DR RELIED ON THE ORDER OF THE LOWER AUT HORITIES. 11. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECORD. WE FIND THAT A SIMILAR ISSUE CAME UP FOR CONSIDERATION BY THE KOLK ATA BENCH OF THIS TRIBUNAL IN THE CASE OF VESUVIUS INDIA LTD. (2008) (116 TTJ 393 ) WHEREIN IT WAS HELD THAT INTEREST CHARGEABLE UNDER SECTION 234C IS FOR PERIO D OF DEFAULT SUBJECT TO MAXIMUM PERIOD OF THREE MONTHS AND NOT COMPULSORILY FOR A PERIOD OF THREE MONTHS IRRESPECTIVE OF PERIOD OF DEFAULT. ACCORDIN GLY WE REMIT THIS ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER TO RE-COMPUTE THE INTEREST UNDER SECTION 234C OF THE ACT IN THE LIGHT OF THE ABOVE DECISION CITED S UPRA . ACCORDINGLY THIS GROUND IN I.T.A. NO. 325/COCH/2014 IS ALLOWED FOR STATISTI CAL PURPOSES. 12. IN THE RESULT ALL THE APPEALS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 21-11-2014 SD/- SD/- (N.R.S.GANESAN) (CHANDRA POOJARI) JUDICIAL MEMBER ACC OUNTANT MEMBER PLACE: KOCHI DATED: 21ST NOVEMBER 2014 I.T.A. NOS.320-325/COCH/2014 7 GJ COPY TO: 1. THE CATHOLIC SYRIAN BANK LTD. ST. MARYS COLLEG E ROAD THRISSUR-680 020. 2. THE ASSISTANT COMMISSIONER OF INCOME-TAX CIRCLE -1(1) THRISSUR. 3. THE ASSISTANT COMMISSIONER OF INCOME-TAX CIRCLE -1 THRISSUR. 4.THE DEPUTY COMMISSIONER OF INCOME-TAX CIRCLE-1 T HRISSUR. 5. THE COMMISSIONER OF INCOME-TAX(APPEALS)-V KOCHI . 6. THE COMMISSIONER OF INCOME-TAX KOCHI. 7. D.R. I.T.A.T. COCHIN BENCH COCHIN. 8. GUARD FILE. BY ORDER (ASSISTANT REGISTRAR) I.T.A.T. COC HIN