DCIT, Circle - 4, Kolkata, Kolkata v. M/s. Karam Chand Thapar & Bros.(Coal Sales) Ltd., Kolkata

ITA 534/KOL/2010 | 1994-1995
Pronouncement Date: 30-04-2010

Appeal Details

RSA Number 53423514 RSA 2010
Assessee PAN AABCK1281H
Bench Kolkata
Appeal Number ITA 534/KOL/2010
Duration Of Justice 1 month(s) 15 day(s)
Appellant DCIT, Circle - 4, Kolkata, Kolkata
Respondent M/s. Karam Chand Thapar & Bros.(Coal Sales) Ltd., Kolkata
Appeal Type Income Tax Appeal
Pronouncement Date 30-04-2010
Appeal Filed By Department
Bench Allotted C
Tribunal Order Date 30-04-2010
Assessment Year 1994-1995
Appeal Filed On 15-03-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL BENCH - C KOLKATA ( ) BEFORE . . SHRI B.R.MITTAL JUDICIAL MEMBER. /AND . . SHRI C.D. RAO ACCOUNTANT MEMBER . / I.T.A.NO. 534/KOL/2010 / ASSESSMENT YEAR 1994 - 95 DCIT CIRCLE - 4 KOLKATA. - - - VERSUS - . M/S.KARAM CHAND THAPAR & BROS. (COAL SALES) LTD. 25 BRABOURNE ROAD KOLKATA 1. AABCK 1281 H ( / A PPELLANT ) ( / RESPONDENT ) / FOR THE APPELLANT : / S MT. JYOTI KUMARI DR / FOR THE RESPONDENT : / SHRI D.S.DAMLE AR / ORDER . . SHRI B.R.MITTAL JUDICIAL MEMBER. THE DEPARTMENT HAS FILED THIS APPEAL FOR THE ASSESSMENT YEAR 1994 - 95 AGAINST ORDER OF THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) DT.1.12.2009 ON THE FOLLOWING GROUND. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN LAW IN DIRECTING TH E ASSESSING OFFICER TO ALLOW INTEREST U/S.244A WITHOUT CONSIDERING THAT IN THAT SECTION THERE IS NO PROVISION OF INTEREST FOR EXCESS PAYMENT OF SELF ASSESSMENT TAX U/S.140A. 2. AT THE TIME OF HEARING THE LEARNED DR RELIED ON THE ORDER OF THE ASSESSIN G OFFICER. HOWEVER THE LEARNED DR CONCEDED THAT THE ISSUE INVOLVED IS COVERED AGAINST THE DEPARTMENT BY THE DECISION OF ITAT KOLKATA BENCH IN THE CASE OF HOOGHLY MILLS CO. LTD V. DCIT ( 74 ITD 309) AND THE LEARNED CIT(A) HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE BY FOLLOWING THE AFORESAID DECISION OF THE ITAT KOLKATA BENCH (SUPRA).THE LEARNED AR OF THE ASSESSEE APART FROM SUPPORTING THE / I.T.A.NO.534/KOL/2010 2 ORDER OF THE LEARNED CIT(A) FURTHER SUBMITTED THAT THE ISSUE INVOLVED HAS ALSO BEEN DECIDED BY HONBLE DELHI H IGH COURT IN THE CASE OF CIT V. SUTLEJ INDUSTRIES LTD. VIDE ORDER DT.15.3.2010 IN ITA NO.1204/2005 REPORTED IN [2010] 3 TAXMANN.COM 63 (NEW DELHI) WHEREIN IT HAS BEEN HELD THAT WHERE THE SELF ASSESSMENT TAX PAID BY THE ASSESSEE U/S.140A IS REFUNDED THE ASSESSEE SHOULD ON PRINCIPLE BE ENTITLED TO INTEREST THEREON SINCE THE SELF - ASSESSMENT TAX FALLS WITHIN THE EXPRESSION REFUND OF ANY AMOUNT. THE LEARNED AR OF THE ASSESSEE FILED A COPY OF THE SAID ORDER OF HONBLE DELHI HIGH COURT TO SUBSTANTIATE HIS ABOVE SUBMISSIONS. 3. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE LEARNED REPRESENTATIVES OF THE PARTIES AND THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE LEARNED CIT(A) HAS DIRECTED THE ASSESSING OFFICER TO ALLOW INTEREST U/S.244A OF THE ACT ON THE EXCESS PAYMENT MADE U/S.140A OF THE ACT BY FOLLOWING THE DECISION OF THE ITAT KOLKATA BENCH IN THE CASE OF HOOGHLY MILLS CO. LTD V. DCIT ( 74 ITD 309) . WE CONSIDER IT PRUDENT TO REPRODUCE PARA 5 OF THE SAID ORDER OF THE LEARNED CIT(A) WHICH RE ADS AS UNDER : (5) I HAVE CONSIDERED THE SUBMISSION OF THE APPELLANT AND PERUSED THE ORDER U/S. 154/254 OF THE ACT. I AM OF THE OPINION THAT THE APPELLANTS CONTENTION THAT THE INTEREST ON REFUND OF EXCESS PAYMENT OF SELF - ASSESSMENT TAX IS ALLOWABLE U/ S. 244A(1)(B) OF THE ACT IS CORRECT. IN THE CASE OF HOOGHLY MILLS CO. LTD. VS. DCIT REPORTED IN 74 ITD 309 (CAL.) FOR A.Y. 1994 - 05 THE ASSESSEE COMPANY FILED ITS RETURN OF INCOME AND CLAIMED CREDIT FOR TAX DEDUCTED AT SOURCE AND SELF - ASSESSMENT TAX. TH E RETURN WAS PROCESSED U/S. 143(1)(A) AND NO INTEREST WAS ALLOWED BY THE ASSESSING OFFICER ON THE AMOUNT OF REFUND. ON APPEAL THE CIT(A) HELD THAT SINCE THE REQUIREMENT OF THE EXPLANATION TO SECTION 244A(1)(B) WAS NOT SATISFIED THE ASSESSEE WOULD NOT BE ENTITLED TO ANY INTEREST UNDER SECTION 244A(1)(B) OF THE ACT. ON FURTHER APPEAL TO THE ITAT THE HONBLE ITAT CALCUTTA HAS HELD AS UNDER IN THE INSTANT CASE THE ASSESSEE CLAIMED INTEREST ON EXCESS PAYMENT OF SELF - ASSESSMENT TAX ALONG WITH TDS OVER THE TAX DETERMINABLE IN THE PROCESSING UNDER SECTION 143(1)(A). IN ACCORDANCE WITH SECTION 244A(1)(B) SUCH INTEREST WAS CLEARLY PAYABLE TO THE ASSESSEE. HOWEVER THE COMMISSIONER (APPEALS) WAS NOT JUSTIFIED IN HER ARGUMENT WITH REGARD TO APPLICABILITY OF EXPLA NATION TO THE SAID CLAUSE TO THE / I.T.A.NO.534/KOL/2010 3 PRESENT CASE. THE INTIMATION ITSELF ON COMPLETION OF PROCESSING UNDER SECTION 143 (1)(A) IS TO BE DEEMED AS THE NOTICE OF DEMAND UNDER SECTION 156. THE COMMISSIONER (APPEALS) ARGUED THAT THE SAID DEEMING PROVISION HAD GOT A LIMITED PURPOSE ONLY VIZ MAKING MACHINERY PROVISION FOR RECOVERY OF TAX APPLICABLE TO THE RECOVERY OF TAX DETERMINES IN TERMS OF SECTION 143(1)(A). HER ARGUMENT IN THIS REGARD COULD NOT BE ACCEPTED. IT HAS BEEN HELD BY VARIOUS COURTS IN A NUMBER OF D ECISIONS THAT A DEEMING PROVISION OF THE STATUTE IS REQUIRED TO BE GIVEN ITS FULL EFFECT. IF SUCH EFFECT WAS NOT GIVEN IN THE INSTANT CASE IT WOULD LEAD TO A VERY ABSURD SITUATION INASMUCH AS HAD THE ASSESSMENT BEEN COMPLETED UNDER SECTION 143(3) IN THE INSTANT CASE THE ASSESSEE WOULD HAVE BEEN ENTITLED TO INTEREST UNDER SECTION 244A(1)(B) WHEREAS IF INSTEAD OF MAKING THE ASSESSMENT UNDER SECTION 143(3) THE ASSESSING OFFICER MERELY PROCESSED THE RETURN UNDER SECTION 143(1)(A) NO SUCH INTEREST WOULD BE AVAILABLE TO THE ASSESSEE. THIS SORT OF INTERPRETATION OF THE RELEVANT EXPLANATION WAS NOT ONLY ABSURD BUT ALSO DISCRIMINATORY IN NATURE. HENCE EVEN FOR THE PURPOSE OF EXPLANATION UNDER CONSIDERATION A NOTICE OF DEMAND HAD TO BE DEEMED AS HAVING BEEN ISS UED UNDER SECTION 156 WHEN THE ASSESSING OFFICER HAD ISSUED AN INTIMATION AFTER PROCESSING THE RETURN UNDER SECTION 143(1)(A). THE CLAIM OF THE ASSESSEE WAS THEREFORE CLEARLY ADMISSIBLE AND THE EXPLANATION COULD NOT STAND IN THE WAY OF SUCH CLAIM. THE M ATTER MIGHT BE LOOKED INTO FROM ANOTHER ANGLE ALSO. THE INTEREST WAS REQUIRED TO BE PAID BY THE GOVERNMENT TO THE ASSESSEE FOR HOLDING AND UTILIZING THE EXCESS MONEY PAID BY THE ASSESSEE OVER AND ABOVE ITS TAX DUES. IN THE INSTANT CASE THE ASSESSEE HAD PA ID MUCH MORE SELF - ASSESSMENT TAX THAN WAS REQUIRED UNDER THE RELEVANT PROVISIONS OF LAW. ALTHOUGH THEREFORE THE PAYMENT HAD BEEN CLAIMED BY THE ASSESSEE AND ALSO CONSIDERED BY THE DEPARTMENTAL AUTHORITIES TO BE SELF - ASSESSMENT TAX ACTUALLY THE SAME WAS NOT EXACTLY OF THE NATURE OF SELF - ASSESSMENT TAX. THE AMOUNT WHICH THE ASSESSEE WAS REQUIRED TO PAY IN ADDITION TO THE TAX DEDUCTED AT SOURCE TO MEET UP THE TAX LIABILITY ARISING OUT OF THE RETURN SHOULD ALONE BE CONSIDERED AS SELF - ASSESSMENT TAX. THE BALANCE AMOUNT OF TAX HAVING NO IMMEDIATE CONNECTION WITH THE RETURN OF INCOME WAS ENJOYED BY THE GOVERNMENT FOR A NUMBER OF MONTHS. IT WAS THEREFORE FAIR AND / I.T.A.NO.534/KOL/2010 4 EQUITABLE ON THE PART OF THE GOVERNMENT TO PAY INTEREST ON THE SAID TO THE ASSESSEE WHEN THIS EX CESS AMOUNT WAS REFUNDED TO THE ASSESSEE. ACCORDINGLY THEREFORE THE ASSESSING OFFICER SHOULD PAY INTEREST UNDER SECTION 244A TO THE ASSESSEE ON THE AMOUNT OF REFUND 4. FURTHER WE OBSERVE THAT HONBLE DELHI HIGH COURT IN THE CASE OF CIT V. SUTLEJ INDU STRIES LTD. (SUPRA) HAS ALSO HELD THAT THE ASSESSEE IS ENTITLED TO INTEREST ON THE PRINCIPAL AMOUNT PAID BY WAY OF SELF ASSESSMENT TAX U/S.140A OF THE ACT WHERE THE SAID SELF - ASSESSMENT TAX IS REFUNDED TO THE ASSESSEE BECAUSE THE SELF - ASSESSMENT TAX ALSO FALLS WITHIN THE EXPRESSION REFUND OF ANY AMOUNT. IT WAS FURTHER HELD BY THE HONBLE HIGH COURT THAT THE COMPUTATION OF INTEREST ON SELF - ASSESSMENT TAX HAS TO BE FROM THE DATE OF PAYMENT OF THE SAID AMOUNT UPTO THE DATE ON WHICH REFUND IS ACTUALLY GRANTE D. 5. IN VIEW OF THE ABOVE WE UPHOLD THE ORDER OF THE LEARNED CIT(A) AND REJECT THE GROUND OF APPEAL TAKEN BY THE DEPARTMENT. 6. IN THE RESULT THE APPEAL OF THE DEPARTMENT IS DISMISSED. THIS ORDER IS PRONOUNCED IN OPEN COURT ON DT. 30.04.2010 SD/ - SD/ - ( . . ) (C.D. RAO) ACCOUNTANT MEMBER ( . . ) ( B.R.MITTAL ) JUDICIAL MEMBER ( ) DATE : 30.04.2010 ( /) H.K.PADHEE / S NR.PRIVATE SECRETARY. / I.T.A.NO.534/KOL/2010 5 - COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT : DCIT CIRCLE - 4 KOLKATA 2 / THE RESPONDENT - M/S.KARAM CHAND THAPAR & BROS. (COAL SALES) LTD. 25 B RABOURNE ROAD KOLKATA 1. 3. / THE CIT 4. ( )/ THE CIT(A) 5. / DR KOLKATA BENCH 6. GUARD FILE . / TRUE COPY / BY ORDER / DEPUTY REGISTRAR .