M/s The State Trading Corporation of India Ltd.,, New Delhi v. ACIT, New Delhi

ITA 4544/DEL/2013 | 2008-2009
Pronouncement Date: 28-11-2014 | Result: Allowed

Appeal Details

RSA Number 454420114 RSA 2013
Assessee PAN AAACT0102F
Bench Delhi
Appeal Number ITA 4544/DEL/2013
Duration Of Justice 1 year(s) 3 month(s) 27 day(s)
Appellant M/s The State Trading Corporation of India Ltd.,, New Delhi
Respondent ACIT, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 28-11-2014
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted H
Tribunal Order Date 28-11-2014
Date Of Final Hearing 27-11-2014
Next Hearing Date 27-11-2014
Assessment Year 2008-2009
Appeal Filed On 01-08-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH H NEW DELHI BEFORE SHRI SHAMIM YAHYA ACCOUNTANT MEMBER & SHRI C.M. GARG JUDICIAL MEMBER ITA NO. 4544/DEL/2013 ASSESSMENT YEARS: 2008-09 THE STATE TRADING CORPORATION OF INDIA LTD. VS. A CIT JAWAHAR VYAPAR BHAWAN CIRCLE 16(1) TOLSTOY MARG NEW DELHI. NEW DELHI. AAACT0102F (APPELLANT) (RESPONDENT) APPELLANT BY : SH. KAMAL JAITLY ADV. & S/SH. SUDHIR GUPTA ADV. & S.M. MANDER AR PARVEEN A GGARWAL ADV. RESPONDENT BY : SH. J.P. CHANDRAKAR SR. DR ORDER PER SHAMIM YAHYA A.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF LD. CIT(A) DATED 29/04/2013 AND PERTAINS TO A.Y. 2008-0 9. THE GROUNDS OF APPEAL READ AS UNDER: 1. THAT THE ORDER DATED 29.04.2013 PASSED BY THE LD. CIT(A)-19 IS BAD IN LAW AND WRONG ON FACTS. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW THE LD. CIT(A)-19 ERRED IN UPHOLDING THE ACTIO N OF AO IN NOT ALLOWING INTEREST U/S 244A OF THE ACT ON THE RE FUND OF RS. 348 48 730/- ALLOWED TO THE APPELLANT AS PER INTIMA TION U/S 143(1) DATED 14.03.2011. 2.1WITHOUT PREJUDICE THE IMPUGNED ORDER PASSED BY THE LD. CIT(A) IS PERVERSE IN AS MUCH AS THE SAME HAS BEEN PASSED COMPLETELY IGNORING THE BINDING JUDGMENT OF THE JURISDICTIONAL HIGH COURT OF DELHI IN THE CASE OF SUTLEJ INDUSTRIES LTD. (325 ITR 331) CITED BEFORE HIM. 3. THE APPELLANT IS ELIGIBLE TO INTEREST UPON THE A MOUNT OF INTEREST ADMISSIBLE U/S 244A ON THE REFUND OF RS. 348 78 790 WORKED OUT AS PER SECTION 154 DATED 14.03.2011 IN VIEW OF THE JUDGMENT OF THE APEX COURT (150 TAXMAN 591). ITA NO. 4544/D/2013 THE STATE TRADING CORPORATION OF INDIA LTD. 2 4. THE APPELLANT CRAVES LEAVE TO ADD DELETE AMEND MODIFY OR SUBSTITUTE ANY GROUND OF APPEAL AT ANY TIME BEFORE DISPOSAL OF APPEAL. 2. IN THIS CASE PURSUANT TO ORDER PASSED U/S 143(3) OF THE INCOME TAX ACT AS WELL AS INTIMATION U/S 143(1) THE ASSESSEE SUBMITTED AN APPLICATION U/S 154 OF THE I.T. ACT FOR RECTIFICATI ON OF MISTAKES FOR ASSESSMENT YEAR 2008-09. IN THE SAID LETTER/PETITI ON THE ASSESSEE LISTED THE MISTAKES AND CONCLUDED AS UNDER: YOU ARE REQUESTED TO KINDLY CARRY OUT THE ABOVE RE CTIFICATION U/S 154 OF THE ACT AT THE EARLIEST AND ALLOW THE REFUND TO THE ASSESSEE ALONG WITH A STATUTORY INTEREST ADMISSIBLE U/S 244A OF TH E ACT. 3. PURSUANT TO THE ABOVE APPLICATION ASSESSEE RECEI VED AN ORDER FROM THE AO. IN THE SAID ORDER THE AMOUNT REFUNDABLE WA S SHOWN AT RS. 3 48 48 733/-. 4. SINCE IN THE ABOVE ORDER PASSED U/S 154 OF THE I .T. ACT DID NOT ALLOW INTEREST U/S 244A FROM THE DATE OF PAYMENT TI LL THE DATE OF ACTUAL REFUND THE ASSESSEE FILED APPEAL BEFORE THE LD. CIT (A). THE ASSESSEES SUBMISSION IN THIS REGARD BEFORE THE LD. CIT(A) WAS AS UNDER: IN THE IMPUGNED ORDER U/S 154 DATED 14/03/2011 TH E AO HAS ALLOWED REFUND OF RS. 34848730/-. INTEREST U/S 244 A WAS NOT ALLOWED WITHOUT ASSIGNING ANY REASON. IT APPEARS THAT INTE REST WAS NOT ALLOWED AS THE REFUND AROSE OUT OF PAYMENT MADE BY WAY OF SELF ASSESSMENT TAX OF RS. 128377601/- ON 30/09/2008. IT IS SUBMITTED THAT INTEREST IS ADMISSIBLE TO THE APPELLANT EVEN ON THE REFUND OF RS. 34848730/- ARISING OUT OF SELF ASSESS MENT TAX FROM THE DATE OF ITS PAYMENT I.E. 30/09/2008 TILL THE DATE O F ACTUAL REFUND I.E. ON 18/03/2011. 5. CONSIDERING THE ABOVE LD. CIT(A) NOTED THE ABOVE MENTIONED CONCLUDING PARAGRAPH OF THE APPLICATION U/S 154. H E NOTED THAT NO FURTHER DETAILS OF INTEREST CLAIMED ARE GIVEN. HE ALSO NOT ED THAT THERE IS NO DISCUSSION REGARDING THE ASSESSEES CLAIM OF INTERE ST U/S 244A IN THE ORDER U/S 154. LD. CIT(A) ALSO NOTED THAT ASSESSEE HAS C LAIMED THAT INTEREST U/S 244A SHOULD BE ALLOWED ON THE PAYMENT OF SELF ASSES SMENT TAX. IN THIS ITA NO. 4544/D/2013 THE STATE TRADING CORPORATION OF INDIA LTD. 3 REGARD LD. CIT(A) FURTHER NOTED THAT ASSESSEE HAD R EFERRED TO SEVERAL JUDICIAL DECISIONS. LD. CIT(A) CONCLUDED AS UNDER: 3.3 THE PRESENT APPEAL IS AGAINST AN ORDER U/S 15 4 PASSED BY THE AO. THE QUESTION WHETHER INTEREST U/S 244A IS ALLO WABLE ON SELF ASSESSMENT TAX THE PERIOD FOR WHICH THIS INTEREST IS ALLOWABLE AND WHETHER INTEREST ON THIS INTEREST U/S 244A IS TO BE ALLOWED HAS BEEN THE SUBJECT OF SEVERAL JUDICIAL DECISIONS. THESE I SSUES HAVE EVOKED CONSIDERABLE DEBATE AND HAVE BEEN INTERPRETED DIFFE RENTLY IN SEVERAL JUDICIAL DECISIONS BY THE HONBLE ITAT AND THE HON BLE HIGH COURTS. THESE ARE DEBATABLE ISSUES WHICH ARE BEYOND THE SCO PE OF SECTION 154. IN VIEW OF THESE FACTS THE APPELLANTS CLAIM THAT INTEREST U/S 244A ON SELF ASSESSMENT TAX AND INTEREST ON THIS I NTEREST SHOULD BE ALLOWED IN THE ORDER U/S 154 IN RESPONSE TO HIS APP LICATION IS NOT ACCEPTABLE. 6. LD. CIT(A) ALSO NOTED THAT ABOVE VIEW WAS SUPPOR TED BY THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CAS E OF CIT VS. MMTC LIMITED 246 ITR 725. 7. AGAINST THE ABOVE ORDER ASSESSEE IS IN APPEAL BE FORE US. 8. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE R ECORDS. LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT ASSESSEE WAS ENTITLED TO INTEREST U/S 244A OF THE ACT ON THE REFUND OF RS. 3 48 48 73 0/-. HE FURTHER SUBMITTED THAT CIT(A) HAS TOTALLY ERRED IN IGNORING THE BINDING JUDGMENT OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS . SUTLEJ INDUSTRIES LIMITED 325 ITR 321. LD. COUNSEL OF THE ASSESSEE FURTHER REFERRED TO THE DECISION OF ITAT MUMBAI BENCH IN ITA NO. 3701/MUM./ 2012 IN THE CASE OF DCIT VS. M/S JSW STEEL LTD. VIDE ORDER DATED 26/06/ 2013. LD. COUNSEL FURTHER SUBMITTED THAT THE DECISION OF HONBLE DELH I HIGH COURT IN THE CASE OF CIT VS. MMTC LTD. (SUPRA) RELIED UPON BY THE LD. CIT(A) IS NOT APPLICABLE ON THE FACTS OF THE CASE. LD. COUNSEL S UBMITTED THAT IN THE SAID CASE AFTER GRANTING THE INTEREST U/S 244A IN THE AS SESSMENT ORDER THE AO HAD SOUGHT TO WITHDRAW THE SAME BY PASSING ORDER U/ S 154. HENCE LD. COUNSEL SUBMITTED THAT THE SAID CASE LAW IS NOT APP LICABLE ON THE FACTS OF THE CASE. LD. COUNSEL FURTHER SUBMITTED THAT AT TH E TIME OF THE ABOVE SAID ITA NO. 4544/D/2013 THE STATE TRADING CORPORATION OF INDIA LTD. 4 JUDGMENT OF DELHI HIGH COURT THE ISSUE AS TO ALLOWA BILITY OF INTEREST U/S 244A ON THE SELF ASSESSMENT TAX HAD NOT EVOLVED. H E PLEADED THAT LATER ON THE HONBLE JURISDICTIONAL HIGH COURT HAD CONSID ERED THIS ISSUE IN THE CASE OF CIT VS. SUTLEJ INDUSTRIES 325 ITR 331. LD. COUNSEL SUBMITTED THAT THIS DECISION WAS VERY MUCH AVAILABLE BEFORE THE LD . CIT(A) WHO DID NOT CONSIDER THIS DECISION. 9. PER CONTRA LD. DEPARTMENTAL REPRESENTATIVE SUBMI TTED THAT THE ORDER U/S 154 HAS BEEN GENERATED BY THE SYSTEM AND PROVISO TO SECTION 244(1)(A) PROVIDES THAT NO INTEREST SHALL BE PAYABL E IF THE AMOUNT OF REFUND IS LESS THAN 10% OF THE TAX AS DETERMINED. LD. DR SUBMITTED THAT IN THIS CASE SINCE THE AMOUNT OF REFUND IS LESS THAN 10% OF THE TAX AS DETERMINED THE SYSTEM DID NOT PROVIDE FOR INTEREST U/S 244A. TO THIS ARGUMENT LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT SECTION 244A (1)(A) IS NOT AT ALL APPLICABLE ON THE FACTS OF THE CASE. HE SUBMITTED THAT THE MATTER PERTAINED TO INTEREST U/S 244A OUT OF SELF ASSESSME NT TAX PAID HENCE SECTION 244A(1)(B) WOULD BE APPLICABLE AND HENCE TH E ABOVE SAID PROVISO REFERRED BY THE LD. DR WOULD NOT BE APPLICABLE. WH EN THIS WAS POINTED OUT LD. DR SUBMITTED THAT IN THE FACTS OF THE PRESENT C ASE IT IS NOT CLEAR WHETHER ADVANCE TAX IS EMBEDDED IN THE REFUND AMOUN T. HENCE INTEREST U/S 244A IS NOT APPLICABLE. 10. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS AN D PERUSED THE RECORDS. WE FIND THAT IT IS TRITE LAW THAT ASSESSE E SHOULD BE GRANTED THE INTEREST DUE TO IT WHICH IS LAWFULLY ENTITLED. IN THE PRESENT CASE ASSESSEE IS CLAIMING INTEREST U/S 244A ON THE SELF ASSESSMENT T AX AMOUNT PAID BY IT. WE FIND THAT ON IDENTICAL ISSUE OF PAYMENT OF INTER EST ON REFUND U/S 244A THE HONBLE JURISDICTIONAL HIGH COURT IN CIT VS. SU TLEJ INDUSTRIES LTD. 325 ITR 331 (DEL.) HAS EXPOUNDED AS UNDER: WHERE AN ASSESSEE OUT OF ABUNDANT CAUTION PAYS SE LF ASSESSMENT WHILST STAKING A CLAIM IN THE RETURN WH ICH CLAIM IS ACCEPTED RESULTING IN REFUND OF SELF-ASSESSMENT TA X THE ASSESSEE ITA NO. 4544/D/2013 THE STATE TRADING CORPORATION OF INDIA LTD. 5 SHOULD BE EQUALLY ENTITLED TO INTEREST THEREON. SE C. 244A WAS INSERTED IN THE STATUTE AS A MEASURE OF RATIONALIZA TION TO ENSURE THAT THE ASSESSEE IS DULY COMPENSATED BY THE GOVERN MENT BY WAY OF PAYMENT OF INTEREST FOR MONIES LEGITIMATELY BELO NGING TO THE ASSESSEE AND WRONGFULLY RETAINED BY THE GOVERNMENT WITHOUT ANY GAPS. THEREFORE WHERE THE SELF ASSESSMENT TAX PAID BY THE ASSESSEE U/S 140A IS REFUNDED THE ASSESSEE SHOULD BE ON PRINCIPLE ENTITLED TO INTEREST THEREON SINCE THE SE LF ASSESSMENT TAX FALLS WITHIN THE EXPRESSION REFUND OF ANY AMOUNT . THE COMPUTATION OF INTEREST ON SELF ASSESSMENT TAX HAS TO BE IN TERMS OF S. 244A(1)(B) I.E. FROM THE DATE OF PAYMENT OF SUCH AMOUNT UP TO THE DATE ON WHICH REFUND IS ACTUALLY GRANTED. E VEN OTHERWISE IT IS TRITE LAW THAT WHEREVER THE ASSESSEE IS ENTIT LED TO REFUND THERE IS STATUTORY LIABILITY ON THE REVENUE TO PAY THE INTEREST ON SUCH REFUND ON GENERAL PRINCIPLES TO PAY THE INTERE ST ON SUMS WRONGFULLY RETAINED CIT VS. CHOLAMANDALAM INVESTM ENT & FINANCE CO. LTD. (2007) 211 CTR (MAD.) 384 : (2007) 294 ITR 438 (MAD.) CONCURRED WITH; SANDVIK ASIA LTD. VS. CI T (2006) 200 CTR (SC) 505 (2006) 280 ITR 643 (SC) FOLLOWED. 11. WE FURTHER NOTE THAT MUMBAI BENCH OF THE ITAT I N THE CASE OF JSW STEEL LTD. (SUPRA) HAS REFERRED TO SEVERAL CASE LAW S INCLUDING THE ABOVE DECISION IN THE CASE OF SUTLEJ INDUSTRIES AND HAS H ELD THAT WE FIND THAT THE ISSUE OF GRANTING OF INTEREST U/S 244A ON SELF ASSE SSMENT TAX IN TERMS OF SECTION 140A IS NOW COVERED BY VARIOUS DECISIONS HA S REFERRED TO BY THE LD. COUNSEL. IN VIEW OF THE AFORESAID DECISIONS AN D DISCUSSIONS WE FIND THAT IT CANNOT BE SAID THAT THERE WAS ANY DEBATE ON THE ELIGIBILITY OF THE ASSESEE OF INTEREST U/S 244A ON THE AMOUNT OF REFUN D WHICH WAS CLAIMED TO BE OUT OF SELF ASSESSMENT TAX PAID. WE AGREE WI TH THE LD. COUNSEL OF THE ASSESSEE THAT THE DECISION OF HONBLE DELHI HIG H COURT IN THE CASE OF MMTC LTD. (SUPRA) RELIED UPON BY THE LD. CIT(A) HAD COME & MUCH BEFORE THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT I N THE CASE OF SUTLEJ INDUSTRIES (SUPRA). WE ALSO AGREE THAT THE FACTS I N THE CASE OF MMTC LTD. WERE DIFFERENT IN AS MUCH AS IN THAT CASE AFTER ALL OWING INTEREST U/S 244A THE AO HAD SOUGHT TO WITHDRAW THE SAME U/S 154 OF T HE I.T. ACT. IT WAS IN THAT VIEW OF THE MATTER THAT THE HONBLE HIGH COURT HAD HELD THAT AOS ACTION U/S 154 WAS NOT JUSTIFIED. ITA NO. 4544/D/2013 THE STATE TRADING CORPORATION OF INDIA LTD. 6 12. WE FURTHER NOTE THAT IT IS NOT THE CASE OF THE AO THAT THE ISSUE IN DEBATABLE HENCE HE IS NOT CONSIDERING THE SAME. TH E AO HAS SIMPLY NOT SAID ANYTHING ON THE ISSUE OF INTEREST U/S 244A. H ENCE ASSESSEE IS RIGHTLY AGGRIEVED AND HAS FILED APPEAL BEFORE THE LD. CIT(A ). 13. IN THE BACKGROUND OF THE AFORESAID DISCUSSIONS AND PRECEDENTS WE ARE OF THE CONSIDERED OPINION THAT LD. CIT(A) HAS E RRED IN NOT ADJUDICATING THE ISSUE RAISED BEFORE HIM WITH REGARD TO THE MERI TS OF CLAIM OF INTEREST U/S 244A ON THE REFUND RECEIVED. LD. CIT(A) HAS NO T GOT INTO THE MERITS OF THE CLAIM AND HAS SIMPLY SAID THAT THE MATTER WAS D EBATABLE AND HENCE THE APPEAL WAS NOT ENTERTAINED. AS HELD BY US ABOV E THE ASSESSEES CLAIM OF INTEREST U/S 244A REQUIRED TO BE ADJUDICAT ED AS PER THE FACTS OF THE CASE AND AS PER LAW. HENCE WE REMIT THIS ISSUE TO THE FILE OF LD. CIT(A). LD. CIT(A) IS DIRECTED TO CONSIDER THE ISS UE OF ASSESSEES CLAIM OF INTEREST U/S 244A ON THE MERITS OF THE CASE. NEEDL ESS TO ADD ASSESSEE SHOULD BE GRANTED ADEQUATE OPPORTUNITY OF BEING HEA RD. 14. IN THE RESULT THIS APPEAL BY THE ASSESSEE STAN DS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 28/11/2014 SD/- SD/- (C.M. GARG) (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 28/11/2014 *KAVITA COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ITAT TRUE COPY BY ORDER ASSISTANT REGISTRAR