THE I.T.O.-6(2)(4), MUMBAI v. M/S. KHANDELWAL LABORATORIES P.LTD., MUMBAI

ITA 3721/MUM/2009 | 2006-2007
Pronouncement Date: 30-04-2010 | Result: Allowed

Appeal Details

RSA Number 372119914 RSA 2009
Assessee PAN AAACK4225E
Bench Mumbai
Appeal Number ITA 3721/MUM/2009
Duration Of Justice 10 month(s) 21 day(s)
Appellant THE I.T.O.-6(2)(4), MUMBAI
Respondent M/S. KHANDELWAL LABORATORIES P.LTD., MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 30-04-2010
Appeal Filed By Department
Order Result Allowed
Bench Allotted A
Tribunal Order Date 30-04-2010
Assessment Year 2006-2007
Appeal Filed On 09-06-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A MUMBAI. BEFORE SHRI R.V. EASWAR SENIOR VICE-PRESIDENT AND SHRI J. SUDHAKAR REDDY ACCOUNTANT MEMBER. I.T.A. NO. 3 721/MUM/2009. ASSESSMENT YEARS : 2006-07. THE INCOME TAX OFFICER M/S KHANDE LWAL LABORATORIES P. LTD. 6(2)(4) MUMBAI. VS. 79/87 DATTARAM N. LAD PATH KALACHOWKI MUMBAI 400 033. PAN AAACK4225E APPELLANT RESPONDENT APPELLANT BY : SHRI MANVENDRA GOYAL RESPONDENT BY : SHRI VIJAY MEHTA. O R D E R PER J. SUDHAKAR REDDY A.M. THIS IS AN APPEAL FILED BY THE REVENUE DIRECTED A GAINST THE ORDER OF THE CIT(APPEALS)-VI MUMBAI DATED 26-03-20 09 FOR THE ASSESSMENT YEAR 2006-07 ON THE FOLLOWING GROUNDS : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE LD. CIT(A) ERRED IN DIRECTING THE ASSESSING OFFICER TO ACCEPT THE REVISED WORKING OF FRINGE BENEFIT SUBMITTED BY THE ASSESSEE COMPANY DURING THE COURSE OF ASSESSMENT PROCEEDINGS WITHOUT APPRECIATING THE FACT THAT THE EXEMPTIONS COULD HAV E BEEN CLAIMED BY THE ASSESSEE BY FILING REVISED RETURN OF FRINGE BENEFITS. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE LD. CIT(A) FAILED TO APPRECIATE THAT THE ASSESSED V ALUE OF FRINGE BENEFITS CANNOT BE LE THAN RETURNED VALUE OF FRINGE BENEFITS. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE LD. CIT(A) FAILED TO APPRECIATE THAT THE JUDGMENT I N THE CASE OF 2 M/S GOETZE INDIA LTD. VS. CIT 284 ITR 323 (SC) IS S QUARELY APPLICABLE IN THIS CASE. 4. THE APPELLANT PRAYS THAT THE ORDER OF LD. CIT(A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE ASSESSING OFFI CER BE RESTORED. 5. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GR OUND OR ADD A NEW GROUND WHICH MAY BE NECESSARY. 2. FACTS IN BRIEF: THE ASSESSEE IS A COMPANY AND IS ENGAGED IN THE B USINESS OF MANUFACTURING AND MARKETING OF ETHICAL PHARMACEUTIC AL FORMULATION. THE RETURN OF FRINGE BENEFIT TAX (FBT) WAS FILED DEC LARING VALUE OF FBT AT RS.1 25 69 110 AND PAID TAXES ACCORDINGLY. DURING T HE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE COMPANY FILED A REVISED WORKING FOR THE VALUE OF FRINGE BENEFIT TAX AT RS.62 31 042/-. THE ASSESSEE FILED THE REVISED WORKING AFTER TAKING INTO CONSIDERATION VA RIOUS EXEMPTIONS. THE AO ON THE GROUND THAT THE ASSESSEE WAS REQUIRED TO FILE REVISED RETURN FOR CLAIMING ANY EXEMPTION FOR THE VALUE OF FRINGE BENE FIT TAX REJECTED THE REVISED COMPUTATION OF THE ASSESSEE. ON APPEAL THE FIRST APPELLATE AUTHORITY APPLIED THE DECISION OF THE JURISDICTIONA L HIGH COURT IN THE CASE OF BALMUKUND ACHARYA (PROP. LAXMI GENERAL SUPPLY CO MPANY) VS. DCIT AS WELL AS CBDT CIRCULAR NO. 14(XL-35) DATED 1 1-04-1955 AND DIRECTED THE AO TO ACCEPT THE REVISED WORKINGS SUBM ITTED BY THE ASSESSEE. AGGRIEVED THE REVENUE IS IN APPEAL. 3. WE HAVE HEARD MR. MANVENDRA GOYAL LEARNED DR A ND MR. VIJAY MEHTA LEARNED COUNSEL FOR THE ASSESSEE. 4. THE JURISDICTIONAL HIGH COURT IN I.T. APPEAL NO . 217 OF 2001 IN THE CASE OF MR. BALKUMUND ACHARYA )PROP. LA XMI GENERAL SUPPLY COMPANY) VS. DCIT VIDE JUDGMENT DATED 19 TH DEC. 2008 AT PARA 31 32 33 ON PAGES 18 & 19 HELD AS FOLLOW : 3 31. HAVING SAID SO WE MUST OBSERVE THAT THE APEX COURT AND THE VARIOUS HIGH COURTS HAVE RULED THAT THE AUTHORITIES UNDER THE ACT ARE UNDER AN OBLIGATION TO ACT IN ACCORDANCE WITH L AW. TAX CAN BE COLLECTED ONLY AS PROVIDED UNDER THE ACT. IF ANY AS SESSEE UNDER A MISTAKE MISCONCEPTIONS OR ON NOT BEING PROPERLY IN STRUCTED IS OVER ASSESSED THE AUTHORITIES UNDER THE ACT ARE REQUIRE D TO ASSIST HIM AND ENSURE THAT ONLY LEGITIMATE TAXES DUE ARE COLLE CTED (SEE S.R. KOSTI V CIT (GUJ) (2005) 276 ITR 165 C.P.A. YOOSUF V. I.T.O. (1970) 77 ITR 237 CIT V. BHARAT GENERAL REINSURANC E CO. LTD (1971) 81 ITR 303 CIT VS. ARCHANA R. DHANWATE (198 2) 136 ITR 355 (BOM). 32. IF PARTICULAR LEVY IS NOT PERMITTED UNDER THE A CT TAX CANNOT BE LEVIED APPLYING THE DOCTRINE OF ESTOPPEL. (SEE DY. COMMISSIONER OF SALES TAX VS.SREENI PRINTERS (1987) 67 SCC 279. 33. THIS COURT IN THE CASE OF NIRMALA L. MEHTA V. A . BALASUBRAMANIAM C.I.T. (2004) 269 ITR 1 HAS HELD T HAT THERE CANNOT BE ANY ESTOPPEL AGAINST THE STATUTE. ARTICLE 265 OF THE CONSTITUTION OF INDIA IN UNMISTAKABLE TERMS PROVIDE S THAT NO TAX SHALL BE LEVIED OR COLLECTED EXCEPT BY AUTHORITY OF LAW. ACQUIESCENCE CANNOT TAKE AWAY FROM A PARTY THE RELI EF THAT HE IS ENTITLED TO WHERE THE TAX IS LEVIED OR COLLECTED WI THOUT AUTHORITY OF LAW. IN THE CASE ON HAND IT WAS OBLIGATORY ON THE PART OF THE ASSESSING OFFICER TO APPLY HIS MIND TO THE FACTS DI SCLOSED IN THE RETURN AND ASSESS THE ASSESSEE KEEPING IN MIND THE LAW HOLDING THE FIELD. WE ARE OF THE CONSIDERED OPINION THAT THE CIT(APPEA LS) WAS RIGHT IN HOLDING THAT THE AO WILL NOT BE JUSTIFIED IF THE IN CORRECT INCOME OFFERED BY THE ASSESSEE IS ASSESSED AND THE ASSESSEE IS MAD E TO PAY TAX ON INCOME WHICH IS NOT CHARGEABLE TO TAX UNDER THE PROVISIONS OF THE ACT. 5. WHILE WE UPHOLD THIS FINDING OF THE FIRST APPEL LATE AUTHORITY WE FIND THAT THE REVENUE AUTHORITIES HAVE NOT VERIF IED THE REVISED COMPUTATION AND THE EXEMPTIONS CLAIMED BY THE ASSES SEE FROM THE VALUE OF FRINGE BENEFITS DECLARED IN THE RETURN. THUS WE DEEM IT APPROPRIATE TO 4 SET ASIDE THE MATTER TO THE FILE OF THE AO WITH A D IRECTION THAT THE REVISED COMPUTATION BE VERIFIED AND DISPOSE OF THE CASE IN ACCORDANCE WITH LAW. 6. IN THE RESULT THE APPEAL OF THE REVENUE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS 30 TH DAY OF APRIL 2010. SD/- SD/- (R.V. EASWAR) (J. SUDHAKAR REDDY) SENIOR VICE-PRESIDENT. ACCOUNTANT MEMBER. MUMBAI DATED : 30 TH APRIL 2010. WAKODE COPY FORWARDED TO : 1. APPELLANT. 2. RESPONDENT 3. C.I.T. 4. CIT(A) 5. DR A-BENCH. (TRUE COPY) BY ORDER ASSTT. REGISTRAR ITAT MUMBAI BENCHES MUMBAI.