Pure Diets India Ltd New Delhi v. Acit New Delhi

In The Income Tax Appellate Tribunal Delhi Benches F New Delhi Before Shri G D Agrawal President And Smt Beena A Pillai Judicial Member Ita No 5070 Del 201 6 A Y 20 13 14 Pure Diets India Ltd 4 E Uppal Plaza M 6 Jasola Dist Centre New Delhi 110 025 Pan Aadcp 8352 Q Vs Acit Circle 20 1 New Delhi Appellant Respondent Appellant By Sh Rajesh Malhotra F Ca Respondent By Shri Atiq Ahmad Sr D R Date Of Hearing 20 12 2017 Date Of Pronouncement 28 12 2017 Order Per Beena A Pillai Judicial Member The Present Appeal Has Been Filed By Assessee Against Order Dated 14 07 16 Passed By Ld Cit A 7 New Delhi For Assessment Year 2013 14 On The Following Grounds Of Appeal 1 The Ld Cit A Has Erred In Law Facts By Not Considering A Detailed Interpretation Of Section 234 A As Given In The Judgment In Case Of Dr Prannoy Roy Given By Delhi H C 2002 121 Taxman 314 Delhi Upheld By Apex Court Vide 2009 179 Taxman 53 Sc In View Of Rule Of Beneficial Construction Rule Of Purposive Construction Etc Ita 5070 Del 2016 Assessment Year 2013 14 Pure Diets India Ltd Page 2 Of 9 The Main Crux Of The Above Judgment Is To Interpret Treat The Interest U S 234 A As Compensatory In Nature Not To Penalize Or Punishing For Delayed Submission Of Return As No One Can Read A Penal Provision In Section 234 A Of The I T Act Further In Roshanlal Kapoor V Assistant Commissioner Of Income Tax 2008 26 Sot 26 Chennai Uro Smc Itat Chennai B Ench B Smc The Honble Bench Has Given The Relief Placing Reliance On Above Judgment Even In Case The Tax U S 140 A Has Been Deposited After The Due Date Of Filing Of Itr 2 Charging Of Interest U S 234 A By The Assessing Officer Beyond The Date Of Deposit Of Self Assessment Tax And Confirmation Of The Same By The Cit A Is Contrary To Facts Law And Is Against The Principles Of Natural Justice And Therefore The Interest Charged Beyond The Date Of Deposit Of Self Asstt Tax Amounting To Rs 20 96 404 Is Liable To Be Deleted 3 Charging Of Interest U S 234 B O F Rs 3 35 424 By The Ld A O Treating Interest Charged U S 234 A Of Rs 20 96 404 As Assessed Tax And Computing Interest U S 234 B On Such Assessed Tax And Confirmation Of The Same By Cit A Is Contrary To Fats And Laws And Therefore Is Liable To Be Deleted The Appellate Craves For Any Addition Modification Deletion Of Grounds Of Appeal If Find Necessary During The Course Of Appeal 2 Brief Facts Of The Case Are As Under Assessee Is I N Receipt Of Intimation Under Section 143 1 Dated 19 04 15 Wherein Interest Under Section 234 A B Has Been Computed At Rs 20 96 404 And Rs 3 35 424 R Espectively Vis Vis Rs 1 90 580 And Rs 17 15 238 C Omputed By Assessee In The Return Filed On 29 11 2014 Ld Ar Submitted That Assessee Was Required To File Its Return For The Year Under Consideration By 30 11 13 Whereas The Return Was Filed On 29 11 14 That Is After Ita 5070 Del 2016 Assessment Year 2013 14 Pure Diets India Ltd Page 3 Of 9 12 Months From The Due Date He Submi Tted That The Self Assessment Tax For The Year Under Consideration As Per The Return Of Income Was Deposited On 30 12 13 Along With Interest Under Section 234 A At Rs 1 90 580 Computing Delay Of One Month Ld A R Submitted That Though The Returned Income W As Accepted By Ld Ao V Ide Order Dated 19 04 2015 Ld Ao Enhanced Interest Under Section 234 A At Rs 22 86 984 And Computed Interest U S 234 B At Rs 20 50 662 2 1 Ld Ar Attempted To Propose Before This Tribunal That Interest Levied Unde R Section 234 A Is Not To Penalise For Delay In Filing Of Return But Is Compensatory In Nature To Compensate The Revenue For Having Not Paid The Self Assessment Tax 2 2 In Respect Of The Interest Lev Ied Under Section 234 B Ld Ar Submitted That Assessing Officer Treated The Interest Computed Under Section 234 A As Assessed Tax For The Purposes Of Section 23 4 B And Charged Rs 3 35 424 As Additional In Terest Under Section 23 4 B He Has Summarised The Entire Addition Made By Assessin G Officer As Under I U S 234 A Additional Interest For 11 Months Rs 1 90 580 P M Rs 20 96 404 00 Ii U S 234 B Additional Interest Rs 20964 Pm From 1 1 2014 To 30 4 2015 16 Months Considering Above Enhancement Of Interest U S 234 A As Assessed Tax For The Purpose Of S 234 B Rs 3 35 424 00 Total Of Demand Raised As Per Intimation U S 143 1 Rs 24 31 828 00 Ita 5070 Del 2016 Assessment Year 2013 14 Pure Diets India Ltd Page 4 Of 9 The Ld Ar Placed Reliance Upon The Following Decision S In Support Of His Submissions Hon Ble Supreme Court In The Case Of Cit Versus Pranoy Roy Supra Roshan Lal Kapoor Versus Acit Reported In 2007 108 Ttj 740 Chennai Cbdt Circular No 549 Dated 31 10 89 2 3 On The Contrary Ld Dr Placed Reliance Upon The Or Der Passed By Authorities Below And Relevant Provisions Of The Act 3 We Have Perused The Submissions Advanced By Both The Sides In The Light Of The Decisions Relied Upon By Ld Ar A Nd The Records Placed Before Us And Relevant Section Applicable To Assessee For The Relevant Period 3 1 Ld Ar Primarily Placed Relian Ce Upon The Decision Of Hon Ble Supreme Court In The Case Of Cit V S Pranoy Roy Supra And Cbdt Circular No 549 Dated 31 10 89 3 2 The 1 St Issue Relates To Enhancement Of Interest Under Section 234 A Of The Act 3 3 The Contention Of Ld Ar Wa S That Assessee Is Not Liable To Pay Interest As It Has Paid The Assessment Tax Though Belatedly By 1 Month Before The Filing Of Return Which Included Interest U S 234 A At 1 Of Taxable Income Which Has Been Computed By Taking Into Consideration 1 Month Delay Only On The Other Hand Ld D R Contends That Interest Under Section 234 A Is Charge Able For Default Ita 5070 Del 2016 Assessment Year 2013 14 Pure Diets India Ltd Page 5 Of 9 In Filing Of Original Retu Rn On Due Date Which Does Not Stop With The Payment Of Self Assessment Tax 3 4 Relevant Provisions Applicable To The Facts Before Us Are As Under I Section 234 A Interest Payable For Default In Furnishing The Return Of Income W Here The Return Of Income For Any Assessment Year Is Furnished After The Due Date Or Is Not Furnished Assessee Shall Be Liable To Pay Simple Interest At The Rate Of One Per Cent For Every Month Or Part Of A Month For The Period Commencing On The Date Imm Ediately Following The Due Date Upto The Date Of Furnishing The Return In Cases Where Return Is Furnished After The Due Date Or Upto The End Of The Assessment Year In Cases Where No Return Is Furnished On The Amount Of Shortfall In Total Income Tax Pay Able By The Assessee 3 5 On Perusal Of The Order Dated 19 04 15 It Is Observed That D Ue Date Of Filing The Original Return Was 30 11 13 Whereas Assessee Filed The Return On 29 11 14 Thereby Causing A Delay Of 12 Months By Applying Section 234 A In Our Considered Opinion Assessee Is Liable To Pay Interest Under Section 234 A For The Period Commencing On The Date Immediately Following The Due Date Upto The Date Of Furnishing The Return In The Present Case Return Is Furnished After The Due Date At One Percent Per Month Ita 5070 Del 2016 Assessment Year 2013 14 Pure Diets India Ltd Page 6 Of 9 3 6 We Have Carefully Perused The Decision Of Hon Ble Supreme Court In The Case Of Cit V S Pranoy Roy Supra In The Light Of The Provisions Under Section 234 A Of The A Ct In Our Opinion Hon Ble Supreme Court Decided In The Said Case That Where The Return Was Filed Late But Due Tax Has Been Paid Before The Due Date Of Filing Of Return Interest Under Section 234 A Would Not Be Leviable As Tax Due Had Already Been Paid Which Was Not Less Than Tax Payable On Returned Income Which Was Accepted Subsequently Cbdt Came Out With A Circular No 2 2015 Dated 10 02 15 Following Decision Of Hon Ble Supreme Court Wherein It Has Been Intimated That No Interest Under Section 234 A Was Chargeable On The Amount Of Self Assessment Tax Paid Befo Re The Due Date Of Filing Of Return Of Income 3 7 In The Present Facts Of The Case Admittedly Self Assessment Tax Has Been Paid With A Delay Of One Month After The Due Date Of Filing Of Return In Our Considered Opinion Non Fulfillment Of Preconditi On Culls Out Assessee S Case From The Protection Granted By The Hon Ble Supreme Court In The Case Of Cit Vs Pranoy Roy Supra And Cbdt Circular No 2 2015 In Our Considered Opinion The Ratio Of Hon Ble Supreme Court Does Not Come To The Rescue Of Asse Ssee At All 3 8 We Therefore Confirm The Interest Computed By Ld Ao Under Section 234 A 4 The 2 Nd Issue Is In Respect Of Levy Of Interest Under Section 234 B Ita 5070 Del 2016 Assessment Year 2013 14 Pure Diets India Ltd Page 7 Of 9 Relevant Legal Provisions Applicable To The Facts Of Present Case Ii Section 234 B Interest Payable For Default In Payment Of Advance Tax An Assessee Who Is Liable To Pay Advance Tax Has Failed To Pay Such Tax Or Where The Advance Tax Paid By Such Assessee Is Less Than Ninety Per Cent Of The Assessed Tax The Assessee Shall Be Liable To Pay Simple Interest At The Rate Of One Per Cent For Every Month Or Part Of A Month For Period From The Date On Which The Payment Of Advance Tax Became Due On The Amount Of Shortfall In The Amount Of Advance Tax Paid 4 1 In Our Opinion Section 234 B Is Ap Plicable Where Assessee Fail To Deposit Advance Tax Or The Advance Ta X Deposited Is Less Than 90 Of The Taxable Income In The Present Case A Ssessee Admittedly Has Not Deposited Advance Tax For Any Of The Three Quarters 4 2 Therefore In Our Considere D Opinion Assessee Is Liable To Interest Under Section 234 B At 1 For Every Month Starting From 1 St Day Of Financial Year Relevant To The Assessment Year Fro M 01 04 13 To 29 11 14 4 3 On Perusal Of Order Dated 19 4 2015 We Observe That Ld Ao Computed Interest U S 234 B At Rs 3 35 424 4 4 We Therefore Do Not Find Any Infirmity In The Order Of Ld Cit A And Confirm The Same Accordingly The Grounds Raised By Assessee Stand Dismissed Ita 5070 Del 2016 Assessment Year 2013 14 Pure Diets India Ltd Page 8 Of 9 5 In The Result Appeal Filed By Assessee Stands Dismissed Order Pronounced In The Open Court On 28 12 2017 Sd Sd G D Agrawal Beena A Pillai President Judicial Member Dated 28 Th December 2017 Mv Copy Of The Order Forwarded To 1 Appellant 2 Respondent 3 Cit 4 Cit A 5 Dr 6 Guard File By Order Asst Registrar Itat Delhi Benches New Delhi Ita 5070 Del 2016 Assessment Year 2013 14 Pure Diets India Ltd Page 9 Of 9 S No Details Date Initials Designation 1 Draft Dictated On Dragon Sr Ps Ps 2 Draft Placed Before Author Sr Ps Ps 3 Draft Proposed Placed Before The Second Member Jm Am 4 Draft Discussed Approved By Second Member Am Am 5 Approved Draft Comes To The Sr Ps Ps Sr Ps Ps 6 Kept For Pronouncement Sr Ps Ps 7 File Sent To Bench Clerk Sr Ps Ps 8 Date On Which The File Goes To Head Clerk 9 Date On Which File Goes To A R 10 Date Of Dispatch Of Order