ACIT, Trivandrum v. M/s SBT, Trivandrum

ITA 394/COCH/2009 | 1989-1990
Pronouncement Date: 29-03-2012

Appeal Details

RSA Number 39421914 RSA 2009
Assessee PAN AAGCS9120G
Bench Cochin
Appeal Number ITA 394/COCH/2009
Duration Of Justice 2 year(s) 8 month(s) 27 day(s)
Appellant ACIT, Trivandrum
Respondent M/s SBT, Trivandrum
Appeal Type Income Tax Appeal
Pronouncement Date 29-03-2012
Appeal Filed By Department
Bench Allotted DB
Tribunal Order Date 29-03-2012
Date Of Final Hearing 08-03-2012
Next Hearing Date 08-03-2012
Assessment Year 1989-1990
Appeal Filed On 02-07-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH COCHIN BEFORE S/SHRI N.R.S.GANESAN JM AND B.R.BASKAR AN AM I.T.A. NOS. 394 & 395/COCH/2009 ASSESSMENT YEARS : 1989-90 & 1990-91 THE ASSISTANT COMMISSIONER OF INCOME-TAX CIRCLE-1(1) TRIVANDRUM. M/S. STATE BANK OF TRAVANCORE HEAD OFFICE POOJAPPURA TRIVANDRUM. [PAN:AAGCS 9120G] (REVENUE -APPELLANT) (ASSESSEE - RESPONDENT) REVENUE BY SHRI T.J.VINCENT SR. DR ASSESSEE BY SHRI C.NARESH CA DATE OF HEARING 08/03/2012 DATE OF PRONOUNCEMENT 29/03/2012 O R D E R PER B.R.BASKARAN ACCOUNTANT MEMBER: BOTH THE APPEALS FILED AT THE INSTANCE OF THE REVE NUE ARE DIRECTED AGAINST THE ORDERS PASSED BY CIT(A)-I TRIVANDRUM AND THEY RELA TE TO THE ASSESSMENT YEARS 1989-90 AND 1990-91. BOTH THE APPEALS WERE HEARD TOGETHER AND HENCE THEY ARE DISPOSED OF BY THIS COMMON ORDER ONE BY ONE FOR THE SAKE OF CONV ENIENCE. 2. WE SHALL FIRST TAKE UP THE APPEAL RELATING TO TH E ASSESSMENT YEAR 1989-90. THE ONLY ISSUE URGED IN THIS APPEAL RELATES TO THE DECI SION OF LD. CIT(A) IN CANCELLING THE INTEREST CHARGED U/S. 234B(3) OF THE ACT. 3. THE FACTS RELATING TO THE SAME ARE STATED IN BRI EF. THE ASSESSMENT FOR THE ASSESSMENT YEAR 1989-90 WAS COMPLETED IN THE HANDS OF THE ASSESSEE U/S. 143(3) OF THE ITA NOS. 394 & 395 /COCH/ 2009 2 ACT ON 18-12-1991 WHICH WAS REVISED ON 24-09-1993 BY DETERMINING THE TOTAL INCOME AT RS. 24.92 CRORES. SUBSEQUENTLY THE ASSESSMENT WAS RE-OPENED U/S. 147 OF THE ACT AND THE REASSESSMENT WAS COMPLETED ON 31-05-1999 BY DETERMI NING THE TOTAL INCOME AT RS. 26.70 CRORES. THEREAFTER THE ASSESSING OFFICER PASSED A RECTIFICATION ORDER ON 17-3-2006 WHERE IN HE CHARGING INTEREST U/S. 234B(3) OF THE A CT. ACCORDING TO THE ASSESSEE IT IS NOT LIABLE TO PAY ANY INTEREST U/S 234B OF THE ACT AS T HERE IS NO SHORTAGE IN PAYMENT OF ADVANCE TAX AS PRESCRIBED UNDER THAT SECTION. HENC E IT FILED AN APPEAL BEFORE THE LD. CIT(A) CHALLENGING THE SAID LEVY ON THE GROUND THAT THE TAX DEDUCTED AT SOURCE AND ADVANCE TAX PAID BY IT HAS EXCEEDED THE TAX DETERMI NED AS PAYABLE BY THE ASSESSING OFFICER. THE LD. CIT(A) ALLOWED THE APPEAL OF THE ASSESSEE. HENCE THE REVENUE IS IN APPEAL BEFORE US CHALLENGING THE SAID DECISION OF T HE LD. CIT(A). 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND CAREFULL Y PERUSED THE RECORD. INTEREST U/S 234B IS CHARGED WHEN THE ASSESSEE WHO IS LIABLE TO PAY ADVANCE TAX U/S 208 HAS FAILED TO PAY THE ADVANCE TAX OR THE ADVANCE TAX PAID BY SUCH ASSESSEE U/S 210 IS LESS THAN 90% OF THE ASSESSED TAX. IN THE INSTANT CASE THE ASSES SEE HAS GIVEN THE DETAILS OF ASSESSED TAX AND ADVANCE TAX IN A TABULAR FORM IN ITS WRITTEN SU BMISSION AND THE SAME IS EXTRACTED BELOW FOR THE SAKE OF CONVENIENCE. AS PER ORDER DATED 18.12.1991 (RS.) AS PER ORDER DATED 31.05.1999 (RS.) TOTAL TAX DETERMINED AS PAYABLE BY AO 13 08 67 653 14 02 25 389 LESS TAX DEDUCTED AT SOURCE 10 62 58 897 10 6 3 57 663 ASSESSED TAX 2 46 08 756 3 38 67 726 LESS: ADVANCE TAX 3 50 00 000 3 50 00 000 (-) 1 03 91 244 (-) 11 32 274 ON PERUSAL OF THE DETAILS EXTRACTED ABOVE WE NOTIC E THAT THE ADVANCE TAX PAID BY THE ASSESSEE IS MORE THAN THE ASSESSED TAX DETERMINED B Y THE ASSESSING OFFICER BOTH IN THE ORIGINAL ASSESSMENT ORDER AND THE RE-ASSESSMENT ORD ER. AS STATED EARLIER THE QUESTION OF CHARGING OF INTEREST IN THE INSTANT CASE WOULD ARIS E ONLY IF THE ADVANCE TAX PAID BY THE ITA NOS. 394 & 395 /COCH/ 2009 3 ASSESSEE IS LESS THAN THE 90% OF THE ASSESSED TAX WHICH IS NOT THE CASE HERE. HENCE IN OUR VIEW THE QUESTION OF CHARGING ANY INTEREST EIT HER U/S 234B(1) OR 234B(3) DOES NOT ARISE IN THE FACTS AND CIRCUMSTANCES OF THE INSTANT CASE. HENCE WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER PASSED BY LD CIT(A) AND ACCORDINGLY UPHOLD THE SAME. 5. NOW WE SHALL TAKE UP THE APPEAL FOR THE ASSE SSMENT YEAR 1990-91. IN THIS APPEAL THE REVENUE HAS CHALLENGED THE DECISION OF THE LD. CIT( A) IN DIRECTING THE ASSESSING OFFICER TO ALLOW INTEREST U/S. 244A OF THE ACT FOR THE PERI OD OF TIME TAKEN BY THE ASSESSEE TO CURE THE DEFECTS IN TDS CERTIFICATE. 6. THE FACTS RELATING TO THE SAID ISSUE ARE STAT ED IN BRIEF. IT APPEARS THAT THERE WERE DEFECTS IN SOME OF THE TDS CERTIFICATES FILED BY TH E ASSESSEE. IT TOOK SOME TIME FOR THE ASSESSEE TO GET THE DEFECTS RECTIFIED. WHILE GIVEN EFFECT TO THE ORDER OF THE ITAT THE ASSESSING OFFICER RECOMPUTED THE INTEREST PAYABLE T O THE ASSESSEE U/S 244A OF THE ACT. WHILE DOING SO HE DID NOT GRANT INTEREST U/S. 244A OF THE ACT FOR THE PERIOD OF DELAY IN SUBMITTING THE CORRECTED TDS CERTIFICATES. THE ASS ESSEE CHALLENGED THE SAID DECISION OF THE AO AND SUCCEEDED IN THE APPEAL FILED BEFORE THE LD. CIT(A). HENCE THE REVENUE IS IN APPEAL BEFORE US. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND CARE FULLY PERUSED THE RECORD. WE NOTICE THAT THE LD. CIT(A) HAS DEALT WITH THIS ISSUE IN DE TAIL AND FOR THE SAKE OF CONVENIENCE WE EXTRACT BELOW THE RELEVANT PORTIONS FROM THE ORDER OF LD CIT(A). IN THE FIRST GROUND OF APPEAL THE AR STATED THAT T HE ASSESSING OFFICER HAS GRANTED INTEREST AT RS. 3 30 01 032/- INSTEAD OF RS . 8 03 08 681/-. THIS HAS RESULTED IN THE DIFFERENCE OF RS. 4 73 07 649/- ON ACCOUNT OF INTEREST ORIGINALLY GRANTED BEING WITHDRAWN FOR THE PERIOD OF TIME TAKE N FOR CURING THE DEFECTS IN TDS CERTIFICATES. THE AR SUBMITTED THAT THE INT EREST GRANTED ORIGINALLY IN THE ORDER DATED 4/1/2002 WAS WITHDRAWN IN THE ORDER DATED 31/03/2005 WHILE GIVING EFFECT TO THE ORDER OF ITAT. THE WITHDRAWAL IS MADE BY THE AC IT ON THE GROUND THAT ITA NOS. 394 & 395 /COCH/ 2009 4 A) THE APPELLANT IS NOT ENTITLED TO INTEREST ON IN TEREST INSPITE OF SPECIFIC DIRECTION BY CIT(A); TO THE CONTRARY IN THE ORDER I N I.T.A. NO. 191-T/2000- 2001 DATED 28/11/2001 WHICH WAS ALSO GIVEN EFFECT T O ORIGINALLY BY THE ASSESSING OFFICER. B) THE APPELLANT IS NOT ENTITLED FOR INTEREST TO T HE PERIOD OF TIME TAKEN FOR CURING THE DEFECTS IN TDS CERTIFICATE. THE AR ALSO SUBMITTED THAT THE ASSESSING OFFICER BY A SUBSEQUENT ORDER DATED 23/08/2007 BASED ON THE ORDER OF ITAT HAD GRA NTED INTEREST ON THE INTEREST DUE TO THE APPELLANT HOWEVER THE INTERE ST WITHDRAWN FOR THE PERIOD OF TIME TAKEN TO CURE THE DEFECTS WAS NOT ALLOWED. THE AR FURTHER SUBMITTED THAT THE ASSESSING OFFICER IN THE GUISE OF GIVING E FFECT TO THE ORDER OF THE ITAT HAD WITHDRAWN THE INTEREST ALREADY GRANTED WITHOUT ANY JURISDICTION. TO THE EXTENT THE ASSESSING OFFICERS ORDER GIVES EFFECT TO THE EXPRESS DIRECTIONS OF THE CIT(A) THE ORDER IS MERGED WITH CIT(A) ORDER. HE SUBMITTED THAT THE ISSUES NOT COVERED BY CIT(A)S ORDER CANNOT BE DEAL T WITH WHILE GIVING EFFECT TO THE ORDER OF THE CIT(A) AND TO THAT EXTENT THE SAID ORDER IS BEYOND THE SCOPE OF STATUTE. THE AR FURTHER CONTENDED THAT EV EN IF THE GIVING EFFECT TO THE ORDER IS CONSIDERED AS A RECTIFICATION ORDER T HE DENYING OF INTEREST U/S. 244A(2) IS BEYOND THE SCOPE OF PROCEEDINGS UNDER SE CTION 154 FOR THE REASON THAT IT IS A SUBJECTIVE DECISION ON WHICH TWO VIEWS ARE POSSIBLE. THE RELIANCE WAS PLACED ON THE DECISION IN THE CASE OF ARTIST TR EE (P) LIMITED VS. ITO (2005) 93 ITD 603 (MUM.). WITHOUT PREJUDICE TO THE ABOVE CONTENTION THE AR SUBMITTED THAT INTEREST IS ONLY A COMPENSATION F OR MONEY ALREADY LYING WITH THE GOVERNMENT AND SINCE THE AMOUNT IN RESPECT OF THESE TDS CERTIFICATES WERE ALREADY DEPOSITED MUCH BEFORE THE END OF THE PREVIOUS YEAR AND SINCE THE INTEREST IS GRANTED FROM 1 ST DAY OF APRIL OF THE ASSESSMENT YEAR NO DENIAL OF THE INTEREST SHOULD HAVE BEEN MADE IN THE ORDER. IT WAS ALSO SUBMITTED THAT A. MERELY BECAUSE THERE WAS A DELAY IN FURNISHING T HE ORIGINAL CERTIFICATES THE SAID DELAY COULD NOT BE TREATED AS A DELAY IN RESPECT OF PROCEEDINGS RESULTING IN THE REFUND. RELIANCE WAS PLACED ON I) ETERNIT EVEREST LIMTED VS. DCIT (20 07) 12 SOT 40 (MUM.) II) KOMAF FINANCIAL SERVICES LIMITED VS. DCIT (IT APOPEAL NUMBER 409(MUM) 2000 DATED 29/11/2001. B. ONCE THE CREDIT FOR TDS IS GIVEN THE LOGICAL CO NSEQUENCES IS DETERMINATION OF INTEREST ON THE TAX CREDIT. RELIANCE IS PLACED ON DCIT VS. PROGRESSIVE CONSTRUCTION SEENIAH & CO. (2003) (85 I TD 277) ITA NOS. 394 & 395 /COCH/ 2009 5 THE AR ALSO PLACED RELIANCE ON THE DECISION OF PUNJ AB & HARYANA HIGH COURT IN THE CASE OF CIT VS. PUNJAB STATE CO-OPERAT IVE BANK IN I.T.A. NO. 674 OF 2008 DATED 16/12/2008 WHEREIN IT WAS HELD TH AT INTEREST CANNOT BE DENIED ON THE GROUND OF DELAY ON PART OF THE ASSESS EE TO CURE THE DEFECTS IN TDS CERTIFICATES SINCE THE TDS WERE DEPOSITED IN TH E GOVERNMENT ACCOUNT AND THE INTEREST IS DUE ON SUCH REFUNDS. A COPY OF THE SAID ORDER WAS ALSO SUBMITTED. I HAVE CONSIDERED THE SUBMISSIONS OF THE AR AND GON E THROUGH THE FACTS OF THE CASE. I AGREE WITH THE CONTENTION OF THE AR THAT WHILE GIVING EFFECT TO THE ORDERS OF THE ITAT THE ASSESSING OFFICER HAS TO FO LLOW THE DIRECTIONS GIVEN IN THE SAID ORDER AND CANNOT BRING IN AN ISSUE WHICH W AS NEVER A SUBJECT MATTER OF APPEAL BEFORE THE APPELLATE AUTHORITIES. FURTHE R I THINK THAT THE INTEREST CANNOT BE DENIED FOR THE TIME TAKEN BY THE APPELLAN T TO CURE THE DEFECTS IN THE TDS CERTIFICATES FOR THE REASON THAT THE AMOUNT IS ALREADY LYING WITH THE GOVERNMENT. THE VARIOUS DECISIONS RELIED ON BY THE AR SQUARELY COVER THE ISSUE IN APPEAL. IN VIEW OF THIS I DIRECT THE ASSE SSING OFFICER TO ALLOW INTEREST FOR THE PERIOD OF TIME TAKEN BY THE APPELLANT TO CU RE THE DEFECTS IN TDS CERTIFICARTES. 8. WE HAVE HEARD THE RIVAL CONTENTIONS ON THIS ISSUE. THE LD COUNSEL FOR THE ASSESSEE PLACED FURTHER RELIANCE ON THE DECISION BY THE HON BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. LARSEN AND TOUBRO LTD. 330 ITR 340 (BOM.) AND THE DECISION OF HONBLE PUNJAB & HARYANA HIGH COURT AT CHANDIGARH IN THE CASE OF C IT-I CHANDIGARH VS. M/S. PUNJAB STATE CO-OPERATIVE BANK REPORTED IN 2009-TIOL-21-HC -P&H-IT DATED DECEMBER 16 2008 AND CONTENDED THAT THERE IS NO NECESSITY TO IN TERFERE WITH THE DECISION OF THE FIRST APPELLATE AUTHORITY. ON THE CONTRARY THE LD D.R M ERELY SUPPORTED THE ORDER OF THE AO. 9. WE HAVE CAREFULLY GONE THROUGH THE CASE LAW RELIED UPON THE ASSESSEE AND FIND THAT THE DECISION TAKEN BY THE LD. CIT(A) IS IN CONFORMI TY WITH THE SAID CASE LAW. THE LD CIT(A) HAS BROUGHT OUT THE LEGAL POSITION IN THIS R EGARD VERY CLEARLY IN HER ORDER WHICH IS EXTRACTED ABOVE. IN THESE CIRCUMSTANCES WE DO FIN D ANY REASON TO INTERFERE WITH THE ORDER PASSED BY THE LD. CIT(A). ITA NOS. 394 & 395 /COCH/ 2009 6 10. IN THE RESULT BOTH THE APPEALS OF THE REV ENUE ARE DISMISSED. PRONOUNCED ACCOR DINGLY ON 29 -03-2012 SD/- SD/- (N.R.S.GANESAN) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: KOCHI DATED: 29TH MARCH 2012 GJ COPY TO: 1. M/S. STATE BANK OF TRAVANCORE HEAD OFFICE (F&I SECTION) POOJAPPURA TRIVANDRUM- 695 012. 2. THE ASSISTANT COMMISSIONER OF INCOME-TAX CIRCLE 1(1) TRIVANDRUM.. 3. THE COMMISSIONER OF INCOME-TAX (APPEALS)-I TRIV ANDRUM. 4. THE COMMISSIONER OF INCOME-TAX TRIVANDRUM 5. D.R. I.T.A.T. COCHIN BENCH COCHIN. 6. GUARD FILE . BY ORDER (ASSISTANT REGISTRAR) I.T.A.T COCHIN