ITO(OSD), CHENNAI v. M/s. Upasana Finance Ltd., CHENNAI

ITA 78/CHNY/2010 | 1997-1998
Pronouncement Date: 18-11-2011 | Result: Dismissed

Appeal Details

RSA Number 7821714 RSA 2010
Assessee PAN AAACU0852D
Bench Chennai
Appeal Number ITA 78/CHNY/2010
Duration Of Justice 1 year(s) 10 month(s)
Appellant ITO(OSD), CHENNAI
Respondent M/s. Upasana Finance Ltd., CHENNAI
Appeal Type Income Tax Appeal
Pronouncement Date 18-11-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted D
Tribunal Order Date 18-11-2011
Date Of Final Hearing 17-11-2011
Next Hearing Date 17-11-2011
Assessment Year 1997-1998
Appeal Filed On 18-01-2010
Judgment Text
IN THE INCOME-TAX APPELLATE TRIBUNAL CHENNAI D BENCH CHENNAI. BEFORE SHRI N.S. SAINI ACCOUNTANT MEMBER & SHRI GEORGE MATHAN JUDICIAL MEMBER I.T.A. NO. 78/MDS/2010 ASSESSMENT YEAR: 1997-98 THE INCOME TAX OFFICER (OSD) COMPANY CIRCLE III(3) CHENNAI - 34. VS. M/S. UPASANA FINANCE LTD. 98A DR. RADHAKRISHNAN SALAI CHENNAI 4. [PAN: AAACU0852D] (APPELLANT) (RESPONDENT) REVENUE BY : SHRI K.E.B. RENGARAJAN JR. STANDING COUNSEL ASSESSEE BY : SHRI M. BALASUBRAMANIYAM C.A. DATE OF HEA RING : 1 7 . 1 1 .2011 DATE OF PRONOUNCEMENT 18.11.2011 ORDER PER N.S. SAINI ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LD. CIT(A) III CHENNAI DATED 23.10.2009 BY TAKING THE FOLLOWING GROUNDS OF APPEAL: 1. THE ORDER OF THE LEARNED CIT(A) IS CONTRARY TO LAW AND FACTS AND CIRCUMSTANCES OF THE CASE. 2.1 THE LEARNED CIT(A) ERRED IN DIRECTING THE ASSES SING OFFICER TO GRANT INTEREST UNDER SECTION 244A TO THE ASSESSEE A S CLAIMED BY IT. 2.2. IT IS SUBMITTED THAT IN THE DECISION OF THE SU PREME COURT IN THE CASE OF M/S. SANDVIK ASIA LTD VS CIT (280 ITR 643) THE APEX COU RT ONLY AS A MATTER OF COMPENSATION ON ACCOUNT OF INOR DINATE DELAY IN THAT CASE (OF 17 YEARS) GRANTED INTEREST ON INTEREST AND IT CANNOT BE CONSIDERED THAT INTEREST ON INTEREST IS ALLOWABLE I N A ROUTINE MANNER WHEN SEC. 244A SPEAKS OF SIMPLE INTEREST ONLY. I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.78 7878 78/ // /MDS/ MDS/ MDS/ MDS/1 11 10 00 0 2 3. FOR THESE AND OTHER GROUNDS THAT MAY BE ADDUCED AT THE TIME OF HEARING IT IS PRAYED THAT THE ORDER OF THE LEARNED CIT(A) MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER RESTORED. 2. THE SOLE ISSUE INVOLVED IN ALL THE GROUNDS OF A PPEAL OF THE REVENUE IS THAT THE LD. CIT(A) ERRED IN DIRECTING THE ASSESSIN G OFFICER TO GRANT INTEREST UNDER SECTION 244A TO THE ASSESSEE IN VIEW OF THE D ECISION OF THE HONBLE SUPREME COURT IN THE CASE OF M/S. SANDVIK ASIA LTD. VS. CIT 280 ITR 643 (SC). IN AS MUCH AS IN THAT CASE THE APEX COURT HAS A MATTER OF COMPENSATION ON ACCOUNT OF INORDINATE DELAY OF 17 Y EARS GRANTED INTEREST ON INTEREST WHICH CANNOT BE CONSIDERED THAT INTEREST ON INTEREST IS ALLOWABLE IN A ROUTINE MANNER WHEN SECTION 244A SPEAKS OF SIMPLE INTEREST ONLY. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND MATERIAL AVAILABLE ON RECORD. IN THE INSTANT CASE THE LD. CIT(A) ORDERED AS UNDER: 2. THE ONLY ISSUE INVOLVED IN THE ABOVE APPEAL RELATES TO THE GRANTING OF INTEREST U/S 244A. THE APPELLANT SUBMITS THAT THE A O HAS ALLOWED REFUND BUT HAS DENIED INTEREST U/S 244A ON INTEREST WHILE GIVI NG EFFECT TO THE ORDER OF THE INCOMETAX APPELLATE TRIBUNAL IN ITA NO. 761/MDS/20 01 DATED 20.1.2006. IT IS CONTENDED THAT THE APPELLANT IS ENTITLED TO INTE REST AS PER PROVISIONS OF S. 244A WHERE REFUND OF 'ANY AMOUNT' BECOMES DUE TO IT . THE WORKING FOR THE INTEREST AS COMPUTED BY THE APPELLANT HAS BEEN SUBM ITTED ALONG WITH THE GROUNDS OF APPEAL. THE ID. AR ALSO RELIED ON THE DE CISIONS OF THE ITAT IN APPELLANTS OWN CASE ON THE SAME ISSUE IN INT.T.A.NO .8/MDS/2008 DATED 30.12.2008 FOR ASSESSMENT YEAR199596 AND IN ITA NO .1282/MDS/2008 DATED 20.3.2009 FOR THE ASSESSMENT YEAR 199394 IN WHICH THE HON'BLE ITAT HAS DECIDED THE ISSUE IN FAVOUR OF THE APPELLANT. WHILE DECIDING THE ISSUE THE HON'BLE ITAT HAS RELIED ON THE DECISION OF THE HON' BLE SUPREME COURT IN THE CASE OF SANDVIK ASIA LTD V. CIT - 280 ITR 643 (SC) . 3. I HAVE CAREFULLY CONSIDERED THE FACTS PERTAINING TO T HIS CASE CASE LAWS AND THE ARGUMENT MADE BY THE LD. AR. IT IS SEEN FRO M THE ORDER OF THE AO THAT I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.78 7878 78/ // /MDS/ MDS/ MDS/ MDS/1 11 10 00 0 3 INTEREST U/S 244A HAS NEITHER BEEN GRANTED NOR THE REASON FOR NOT GRANTING INTEREST IS GIVEN IN THE SAID ORDER. ON THE OTHER H AND THE APPELLANT HAS GIVEN THE WORKING OF THE INTEREST ALONGWITH THE GROUNDS O F APPEAL. AS PER PROVISIONS OF S. 244A WHERE REFUND OF ANY AMOUNT BE COMES DUE TO THE ASSESSEE UNDER THE INCOME-TAX ACT 1961 HE IS ENTI TLED TO RECEIVE SIMPLE INTEREST THEREON IN THE MANNER PROVIDED THEREIN. IT WOULD BE ENTITLED TO RECEIVE SIMPLE INTEREST AT VARYING RATES FOR DIFFER ENT PERIODS. I AM OF THE OPINION THAT THE DECISION OF THE HON'BLE SUPREME CO URT IN SANDVIK ASIA LTD (SUPRA) IS APPLICABLE TO THIS CASE. RESPECTFULLY FO LLOWING THE SAID DECISION I DIRECT THE AO TO ALLOW INTEREST U/S 244A ON 'ANY AM OUNT' OF REFUND INCLUDING THE INTEREST DUE TO THE APPELLANT. HE IS FURTHER DI RECTED TO VERIFY THE WORKING OF INTEREST FURNISHED BY THE APPELLANT TOGETHER WIT H THE GROUNDS OF APPEAL AND ALLOW CORRECT AMOUNT OF INTEREST U/S 244A IN ACCORD ANCE WITH LAW. THE APPELLANT SUCCEEDS ON THIS GROUND. 4. THE LD. DR COULD NOT POINT OUT HOW THE ABOVE OR DER OF THE LD. CIT(A) IS CONTRARY TO LAW. FURTHER WE FIND THAT THE HONBLE DELHI HIGH COURT IN THE CASE OF MOTOR AND GENERAL FINANCE LTD. V. CIT [2010 ] 320 ITR 88 (DEL) EXPLAINED THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF SANDVIK ASIA LTD. V. CIT [2006] 280 ITR 643 (SC) AS UNDER: WHEN THE REFUND OF TAX BECOMES PAYABLE AS A RESULT OF ORDERS PASSED IN APPEAL OR OTHER PROCEEDINGS UNDER THE INCOME-TAX AC T 1961 THIS REFUND IS TO BE GIVEN ALONG WITH INTEREST WHICH IS TO BE CALCUL ATED AS PER SECTION 244A OF THE ACT. IF THAT INTEREST IS PAID ALONG WITH THE EX CESS TAX NO FURTHER PAYMENT IS TO BE MADE. IT IS ONLY WHEN THE EXCESS AMOUNT OF TAX IS REFUNDED BUT THE INTEREST IS NOT REFUNDED THEREWITH THAT THE RETENT ION OF INTEREST AMOUNT WOULD BECOME UNJUSTIFIED AND INTEREST ON INTEREST WOULD A LSO BECOME PAYABLE. THE REASON IS SIMPLE. IT IS THE TAX WHICH WAS PAID IN E XCESS BY THE ASSESSEE WHICH BECAME REFUNDABLE. THE ASSESSEE WOULD BE COMPENSATE D BY PAYING INTEREST THEREUPON. IT IS ONLY WHEN THE INTEREST IS NOT REFU NDED ALONG WITH EXCESS TAX THAT THE WITHHOLDING OF THE INTEREST BECOMES UNJUST IFIED AND IT BECOMES AN 'AMOUNT DUE' TO THE ASSESSEE ON WHICH THE ASSESSEE CAN CLAIM FURTHER INTEREST. 5. IN VIEW OF THE ABOVE DECISION OF THE HONBLE DE LHI HIGH COURT WE DO NOT FIND ANY ERROR IN THE ORDER OF THE LD. CIT(A) T O DIRECT THE ASSESSING OFFICER I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.78 7878 78/ // /MDS/ MDS/ MDS/ MDS/1 11 10 00 0 4 TO VERIFY AND ALLOW THE INTEREST AS PER LAW. HENCE THE GROUNDS OF APPEAL OF THE REVENUE ARE DISMISSED. 6. IN THE RESULT THE APPEAL OF THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 18.11.2011. SD/ - SD/ - (GEORGE MATHAN) JUDICIAL MEMBER (N.S.SAINI) ACCOUNTANT MEMBER CHENNAI DATED THE 18.11.2011 VM/- TO: THE ASSESSEE//A.O./CIT(A)/CIT/D.R.