DCIT, Circle - 3, Kolkata, Kolkata v. M/s. The Peerless General Finance & Investment Co. Ltd., Kolkata

ITA 367/KOL/2010 | 2000-2001
Pronouncement Date: 09-04-2010

Appeal Details

RSA Number 36723514 RSA 2010
Assessee PAN AABCT3043L
Bench Kolkata
Appeal Number ITA 367/KOL/2010
Duration Of Justice 1 month(s) 22 day(s)
Appellant DCIT, Circle - 3, Kolkata, Kolkata
Respondent M/s. The Peerless General Finance & Investment Co. Ltd., Kolkata
Appeal Type Income Tax Appeal
Pronouncement Date 09-04-2010
Appeal Filed By Department
Bench Allotted A
Tribunal Order Date 09-04-2010
Assessment Year 2000-2001
Appeal Filed On 17-02-2010
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL : A BENC H : KOLKATA [ BEFORE SHRI B.R.MITTAL HONBLE J.M. & SHRI C. D. RAO HONBLE A.M .] I.T.A.NO. 367 (KOL) OF 2010 : ASSESSMENT YEA R 2000-01 DCIT. CIRCLE-3 KOL. -VS- THE PEERLESS GENERAL FINANCE & INVESTMENT CO. LTD. [APPELLANT] (PAN: AABCT 3043L) [RESPONDENT] APPELLANT BY : SHRI K.K.TRIPATHI RESPONDENT BY : SHRI S.K.TULSIYAN O R D E R O R D E R O R D E R O R D E R PER SHRI C.D.RAO A.M . THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORD ER OF THE C.I.T.(A)-I KOLKATA DATED 30.11.2009 FOR THE ASSESSMENT YEAR 2000-01. 2. AT THE OUTSET OF HEARING IT IS OBSERVED THAT TH E APPEAL FILED BY THE REVENUE IS DELAYED BY 04 DAYS FOR WHICH THE REVENUE HAS FILED AN APPLICATION DATED 17.02.10 FOR CONDONATION OF DELAY. THE LD. COUNSEL APPEARING ON BEHALF OF THE ASSESSEE DID NOT RAISE ANY OBJECTION AGAINST THE REQUEST OF THE LD. DR FOR CONDONATION OF DELAY. AFTER HEARING BOTH THE SIDES WE CONDONE THE DELAY AND PR OCEED TO HEAR THE APPEAL. 3. THE ONLY ISSUE RAISED BY THE REVENUE IN THIS APP EAL IS RELATING TO THE CANCELLATION OF THE ORDER PASSED BY THE AO UNDER SE CTION 154/251/143(3)/154 DATED 30.06.2008. 4. BRIEF FACTS OF THIS ISSUE ARE THAT THE AO PASSED AN ORDER UNDER SECTION 251/243(3)/154 OF THE I.T.ACT DATED 22.4.08 RELATIN G TO ASSESSMENT YEAR 2000-01 IN THE CASE OF THE ASSESSEE AFTER GIVING EFFECT TO THE OR DERS OF THE LD. CIT(A) IN APPEAL NO.160/CIT(A)/CIR-3/07-08 DATED 22.1.08. IN THIS OR DER HE ALLOWED INTEREST ON UNPAID INTEREST AND DETERMINED A SUM OF RS.1 30 28 223/- A S NET REFUND PAYABLE TO THE ASSESSEE. THEREAFTER HE ISSUED A NOTICE UNDER SECTI ON 154 OF THE ACT DATED 30.6.08 DIRECTING THE ASSESSEE TO SHOW CAUSE AS TO WHY HIS EARLIER ORDER DATED 22.4.08 REFERRED TO ABOVE SHOULD NOT BE RECTIFIED ON ACCOUNT OF A MI STAKE IN CALCULATION OF INTEREST 2 UNDER SECTION 244A OF THE I.T. ACT. THIS NOTICE UND ER SECTION 154 DID NOT INDICATE THE EXACT NATURE OF THE ALLEGED MISTAKE. ON ENQUIRY IT WAS FOUND THAT THE SAID ALLEGED MISTAKE WAS IN RESPECT OF GRANT OF INTEREST ON UNPA ID INTEREST ALREADY ALLOWED BY HIM IN HIS ORDER DATED 22.4.08 REFERRED TO ABOVE. IN RE PLY TO THE SAID SHOW CAUSE NOTICE THE ASSESSEE SUBMITTED A LETTER DATED 30.6.08 IN WHICH IT WAS POINTED OUT THAT THE TRIBUNAL IN THE ASSESSEES OWN CASE FOR ASSESSMENT YEARS 200 0-01 AND 1987-88 DIRECTED THE AO TO GRANT INTEREST ON UNPAID INTEREST FOLLOWING THE HONBLE SUPREME COURTS DECISION IN THE CASE OF SANDVIK ASIA LTD. REPORTED IN 280 ITR 6 43. IT WAS FURTHER SUBMITTED IN THE LETTER THAT SINCE IN HIS ORDER DATED 22.4.08 HE GR ANTED INTEREST ON UNPAID INTEREST FOLLOWING SUCH TRIBUNAL ORDERS READ WITH THE HONBL E SUPREME COURT DECISION IN THE CASE OF SANDVIK ASIA LTD. THERE COULD NOT BE ANY M ISTAKE NOT TO SPEAK OF ANY APPARENT MISTAKE IN SUCH ORDER. IT WAS FURTHER POI NTED OUT THAT SECTION 154 OF THE I.T.ACT HAS NO APPLICATION IN THE ABSENCE OF ANY AP PARENT MISTAKE. THE AO WAS REQUESTED TO DROP THE RECTIFICATION PROCEEDING. HE HAS HOWEVER PASSED AN ORDER UNDER SECTION 154 OF THE I.T. ACT WITHDRAWING THE INTERES T ALREADY GRANTED BY HIM ON THE UNPAID INTEREST. 5. ON APPEAL THE LD. CIT(A) HAS CANCELLED THE ORDE R PASSED UNDER SECTION 154/251/143(3)/154 BY OBSERVING AS UNDER: 5. I HAVE CAREFULLY GONE THROUGH THE ORDERS OF THE A.O. DT. 30.6.08 WHICH IS UNDER APPEAL. I HAVE ALSO CONSIDERED THE S UBMISSIONS OF THE A.R. AS DISCUSSED ABOVE. SINCE THE A.O.S ORDER DT. 30.6.08 AGAINST WHICH THE PRESENT APPEAL HAS BEEN FILED WAS PASSED IN TERMS OF SEC. 154 OF THE I.T. ACT IT HAS TO BE EXAMINED NOT ON MERIT BUT PRIMARILY ON THE QUESTION WHETHER THERE WAS ANY APPARENT MISTAKE IN HIS EARLIER ORDERS. SINCE FOR THE SAME ASSTT. YEAR 2000-01 THE HONBLE TRIBUNAL C BENCH KOLKATA IN ITS ORDER IN ITA NO.585/K/06 DT. 28.2.07 DIRECTED THE A.O. TO GRANT INTEREST ON UNPAID INTEREST TO THE APPELLANT (COPY PLACED IN MY RECORD) THERE COULD BE NO APPARENT MISTAKE ON THIS ISSUE IN THE A.O.S EARLIER ORDER DT. 22.4.08 WHICH HE INTENDED TO RECT IFY. THE A.O.S ORDER DT. 30.6.08 IN WHICH HE HAS TRIED TO ESTABLISH THAT ON MERIT INTEREST ON UNPAID INTEREST CANNOT BE GRANTED U/S.244A OF THE I .T. ACT IS NOT VERY CONVINCING SPECIALLY IN VIEW OF THE HONBLE MP HIG H COURT DECISION IN THE CASE OF CIT VS. HEG LTD. (310-ITR-341) REFERRED TO ABOVE. CONSEQUENTLY THE ORDER OF THE LD. A.O. PASSED U/S. 154/251/143(3)/154 DT. 30.6.08 IS CANCELLED AND HIS EARLIER ORDER DT. 22.4.08 WHICH HE PROPOSED TO RECTIFY IS RESTORED. 3 6. AGGRIEVED BY THIS NOW THE REVENUS IS IN APPEAL BEFORE US. 7. AT THE TIME OF HEARING BEFORE US THE LD. DR AP PEARING ON BEHALF OF THE REVENUE ARGUED AS UNDER: (I) THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT (APPEALS) HAS ERRED IN CANCELING THE ORDER U/S.154 OF THE I.T. ACT 1961 DATED 30.06.2008 WITHOUT APPRECIATING THE CORRECT POSITIO N OF LAW THAT THE INTEREST U/S.244A IS FINALLY DETERMINED AS PER THE PROVISION S OF SUB-SECTION (3) OF THE SAID SECTION 244A ONLY AT THE TIME OF GIVING EFFECT TO THE ORDER OF CIT (APPEALS) U/S.251 OF THE I.T.ACT 1961 AND THAT THE MISTAKE OF INCORRECT COMPUTATION OF INTEREST U/S.244A IN THE ORDER U/S.2 51 DATED 22.04.2008 WAS A MISTAKE OF LAW APPARENT FROM RECORD LIABLE TO BE RE CTIFIED U/S.154 OF THE I.T.ACT 1961. (II) WITHOUT PREJUDICE TO ABOVE GROUND ON THE FACT S AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(APPEALS) HAS FAILED TO APPRECIATE THAT THE INTEREST GRANTED U/S.244A IN THE EARLIER PROCEE DINGS WAS TO BE INCREASED OR DECREASED IN VIEW OF THE PROVISION OF SECTION 244A( 3) OF THE I.T.ACT 1961 WHILE GIVING EFFECT TO THE ORDER OF CIT(APPEALS) AN D THEREFORE NO FURTHER INTEREST U/S.244A WAS TO BE GRANTED ON INTEREST COM PONENT EMBEDDED IN THE AMOUNT OF REFUND GRANTED EARLIER. (III) WITHOUT PREJUDICE TO ABOVE GROUNDS THE LD. C IT(APPEALS) HAS FAILED TO PROVE THAT THE WORKING OF THE AMOUNT OF REFUND AS W ELL AS THE INTEREST PAYABLE U/S. 244A IN THE ORDER U/S.154 OF THE I.T. ACT 196 1 DATED 30.06.2008 WAS NOT LEGALLY CORRECT AND THAT THE WORKING THEREOF IN THE EARLIER ORDER U/S.251 DATED 22.04.2008 WAS LEGALLY CORRECT BEFORE CANCELING THE RECTIFICATION ORDER U/S.154 OF THE I.T.ACT 1961 DATED 30.06.2008. (IV) THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE ORDER OF THE LD. CIT (APPEALS) CANCELING THE RECTIFICATION ORDER U/S.154 DATED 30.06.2008 IS PERVERSE AND CONTRARY TO LAW AND AS SUCH THE SAME OUGHT TO BE SET ASIDE AND THE ORDER OF THE AO TO BE RESTORED. 4 8. ON THE OTHER HAND THE LD. COUNSEL APPEARING ON BEHALF OF THE ASSESSEE HAS REITERATED THE SUBMISSIONS MADE BEFORE THE REVENUE AUTHORITIES AND FURTHER CONTENDED THAT THERE IS NO MATERIAL DIFFERENCE BETWEEN THE PR OVISIONS OF SECTION 244 AND 244A OF THE I.T. ACT AND INTEREST ON UNPAID INTEREST IS PAY ABLE ALSO IN TERMS OF SECTION 244A OF THE I.T. ACT FOLLOWING THE HONBLE SUPREME COURTS DECISION IN THE CASE OF NARENDRA DOSHI AND M/S. SANDVIK ASIA LTD. HE HAS FINALLY SUB MITTED THAT THE RECTIFICATION ORDER OF THE LD. A.O. WITHDRAWING INTEREST ON UNPAID INTE REST CANNOT THEREFORE BE UPHELD EITHER ON TECHNICAL GROUND OR ON MERIT. THEREFORE HE REQUESTED THAT THE ACTION OF THE LD. CIT(A) IS JUSTIFIABLE IN THE PRESENT FACTS AND CIRCUMSTANCES OF THE CASE. 9. AFTER HEARING THE RIVAL SUBMISSIONS AND ON CAREF UL PERUSAL OF THE MATERIALS AVAILABLE ON RECORD KEEPING IN VIEW OF THE FACT TH AT ALLOWING OF INTEREST UNDER SECTION 244A IS A DEBATABLE ISSUE AND THE SAME CANNOT BE RE CTIFIED BY APPLYING THE PROVISIONS OF SECTION 154 OF THE I.T. ACT. THEREFORE WE ARE O F THE VIEW THAT THERE IS NO INFIRMITY IN THE ORDERS OF THE LD. CIT(A) TO BE INTERFERED WI TH. HENCE WE CONFIRM THE ORDER OF THE LD. CIT(A) BY DISMISSING THE APPEAL OF THE REVE NUE. 10. IN THE RESULT THE REVENUES APPEAL IS DISMISS ED. ORDER IS PRONOUNCED IN THE COURT ON 09-04-2010. SD/- SD/- [B.R.MITTAL] [C.D.RAO] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 09-04-2010 COPY FORWARDED TO : 1. THE PEERLESS GENERAL FINANCE & INVESTMENT CO. LTD. 3 GOVT. PLACE (EAST) KOLKATA 69.. 2. DCIT. CIRCLE-3 KOLKATA 3.CIT(APPEAL) KOLKATA 4. CIT KOLKATA 5. D.R. ITAT KOLKATA. TRUE COPY BY OR DER DY. REGISTRAR ITAT KOLKATA MST