Dr Pushpa A.P.Bhat, Kasargode v. ACIT, Calicut

ITA 87/COCH/2010 | 2006-2007
Pronouncement Date: 13-09-2011

Appeal Details

RSA Number 8721914 RSA 2010
Assessee PAN AJZPB7513R
Bench Cochin
Appeal Number ITA 87/COCH/2010
Duration Of Justice 1 year(s) 7 month(s) 4 day(s)
Appellant Dr Pushpa A.P.Bhat, Kasargode
Respondent ACIT, Calicut
Appeal Type Income Tax Appeal
Pronouncement Date 13-09-2011
Appeal Filed By Assessee
Bench Allotted DB
Tribunal Order Date 13-09-2011
Date Of Final Hearing 18-08-2011
Next Hearing Date 18-08-2011
Assessment Year 2006-2007
Appeal Filed On 08-02-2010
Judgment Text
IN THE INCOME TAX APPELLAT E TRIBUNAL COCHIN BEN CH COCHIN BEFORE S/SHRI N.VIJAYAKUMARAN JM AND SANJAY AR ORA AM I.T.A. NOS. 82 TO 87/COCH/2010 ASSESSMENT YEARS: 2001-02 TO 2006-07 DR. PUSHPA A.P. BHAT KASARAGOD INSTITUTE OF MEDICAL SCIENCES ASHWINI NAGAR NH 17 KASARAGOD-671121 [PAN:AJZPB 7513R] VS. THE ASSISTANT COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE-1 CALICUT. (ASSESSEE-APPELLANT) (REVENUE- RESPONDENT) I.T.A. NOS. 88-93/COCH/2010 ASSESSMENT YEARS: 2001-02 TO 2006-07 DR. B.A. PADMANABHA BHAT KASARAGOD INSTITUTE OF MEDICAL SCIENCES ASHWINI NAGAR NH 17 KASARAGOD-671121 [PAN:ADBPB 3091L] VS. THE ASSISTANT COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE-1 CALICUT. (ASSESSEE-APPELLANT) (REVENUE- RESPONDENT) ASSESSEE BY SHRI A.KESAVA BHAT FCA-AR REVENUE BY SHRI S.R.SENAPATI SR.DR DATE OF HEARING 18/08/2011 DATE OF PRONOUNCEMENT 13/09/2011 O R D E R PER SANJAY ARORA AM: THESE ARE A SET OF SIX APPEALS EACH QUA TWO ASSESSES BEING HUSBAND AND WIFE I.E. FOR SIX CONSECUTIVE YEARS BEING AY 2001-02 TO AY 2 006-07 ARISING OUT OF THE COMMON ORDER (DATED 27.10.2009) PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS)-I KOCHI (`CIT(A) FOR SHORT) SEPARATELY FOR EACH ASSESSEE DISMISSING THE APPEALS CHALLENGING THE I.T.A. NOS. 82-87 & 88-93 /COCH/2010 (FOR AS TT. YEARS 2001-02 TO 2006-07) 2 ASSESSMENTS FRAMED U/SS. 153A AND 153C OF THE INCOM E TAX ACT 1961 (THE 'ACT' HEREINAFTER). 2. THE APPEALS RAISING COMMON ISSUES WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY A COMMON CONSOLIDATED ORDER. THE ONLY ISSUE RAISED IS THE MAINTAINABILITY OF THE LEVY OF INTEREST U/SS. 234A 234B 234C AND 234D OF THE ACT IN THE FACTS AND CIRCUMSTANCES OF THE CASE/S. WHILE THE LEVY U/S. 23 4A AND 234B IS FOR ALL THE YEARS THE CHARGE OF INTEREST U/S. 234C AND 234D IS FOR SOME Y EARS; THERE BEING NO CHARGE OF INTEREST U/S. 234D IN THE CASE OF WIFE DR. PUSHPA BHAT FOR ANY YEAR. WE SHALL TAKE UP THE ISSUE SECTION-WISE BEFORE WHICH WE SHALL HOWEVER DELINEA TE THE FACTS OF THE CASE IN BRIEF. 3. THE FACTS OF THE CASE IN-SO-FAR AS ARE RELEVANT ARE THAT BOTH THE APPELLANTS ARE DOCTORS WORKING AT KASARAGOD INSTITUTE OF MEDICAL S CIENCES (KIMS) A PARTNERSHIP FIRM RUNNING A NURSING HOME AT ASHWINI NAGAR KASARAGOD AS AN ORTHOPAEDIC SURGEON AND GYNAECOLOGIST RESPECTIVELY WITH DR. PADMANABHA BHA T BEING ONE OF THE PARTNERS THEREIN. HE AS WELL AS THE FIRM WAS SUBJECT TO SEARCH ACTI ON U/S. 132 OF THE ACT ON 8.8.2006 COVERING THE BUSINESS PREMISES AS WELL AS HIS RESID ENCE. NOTICES U/S. 153A AND U/S. 153A R/W S.153C WERE ISSUED TO THE HUSBAND AND WIFE RESP ECTIVELY ON 3.4.2007 FOR EACH OF THE RELEVANT YEARS ALLOWING 30 DAYS TIME TO FILE THE R ETURN/S U/S. 153A WHICH STOOD FILED IN THE CASE OF BOTH ON 13.7.2007. THE ASSESSMENTS WER E FRAMED ON AGREED BASIS TO COVER UP ANY SUPPRESSION OF INCOME THAT MAY BE INFERABLE OR DETERMINABLE FROM THE SEIZED MATERIALS OR OTHERWISE ESCAPED ASSESSMENT AS WELL AS AS CONTENDED TO PURCHASE PEACE WITH THE DEPARTMENT AND AVOID PROTRACTED LITIGATIO N THEREWITH. IN THE CASE OF WIFE A CANCER PATIENT UNDERGOING TREATMENT THERE-FOR NO R ETURN U/S. 139 STOOD FILED FOR AY 2001- 02 TO AY 2004-05 AND AGAIN FOR A.Y. 2006-07 WHIL E THAT FOR A.Y. 2005-06 STOOD FILED ON 31.3.2006. FURTHER THE DISCLOSURE/SURRENDER IN HER CASE ALSO INCLUDED VALUE OF JEWELLERY TREATING 50% OF IT AS EXPLAINED AND THE BALANCE 50% AS UNEXPLAINED. THE YEAR-WISE DETAILS OF THE VOLUNTARY OFFER OF INCOME I.E. OVER AND ABOVE THE RETURNED INCOME/S FOR BOTH THE ASSESSEE-APPELLANTS ARE AS UNDER: I.T.A. NOS. 82-87 & 88-93 /COCH/2010 (FOR AS TT. YEARS 2001-02 TO 2006-07) 3 (AMOUNT IN ` LAKHS ) ASSTT.YR. DR. PADMANABHA BHAT DR. PUSHPA BHAT 2001-02 1.0 3.10 2002-03 1.0 3.35 2003-04 1.0 4.40 2004-05 1.0 2.25 2005-06 1.0 3.00 2006-07 1.50 1.50 2007-08 1.50 0.00 TOTAL 8.00 17.60 THE ASSESSMENTS WERE ACCORDINGLY COMPLETED VIDE OR DERS DATED 29.12.2008 CHARGING INTEREST U/S. 234A AND 234B AND WHERE APP LICABLE U/SS. 234C AND 234D. IT IS THE LEVY OF THIS INTEREST THAT THE ASSESSEE/S IS IN APPEAL AGAINST ON THE SAME HAVING BEEN CONFIRMED BY THE FIRST APPELLATE AUTHORITY. 4. BEFORE US AT THE VERY OUTSET IT WAS CLARI FIED BY THE LD. AR THE ASSESSEES COUNSEL THAT THE ASSESSEE/S WAS NOT PRESSING THE FIRST THRE E GROUNDS OF APPEAL UNDER REFERENCE I.E. THOSE RAISING THE ISSUE/S WITH REGARD TO THE VALIDI TY OF THE SEARCH AND THE ASSUMPTION OF JURISDICTION TO FRAME THE IMPUGNED ASSESSMENTS (WIT H GROUND # 1 BEING GENERAL IN NATURE) AND MADE AN ENDORSEMENT TO THIS EFFECT ON THE RELEVANT PAGE OF FORM 36 ITSELF. AND THAT THE ONLY ISSUE BEING RAISED IS WITH RESPE CT TO THE LEVY OF INTEREST. WE SHALL TAKE UP EACH LEVY SEPARATELY. INTEREST U/S. 234A 5.1 THE SECTION DEFINES THE CHARGE I.E. TH E DEFAULT FOR WHICH INTEREST IS TO BE LEVIED AS ALSO THE MANNER IN WHICH THE SAME IS TO BE WORKE D OUT OR COMPUTED. THE SECTION PROVIDES FOR THE LEVY OF INTEREST FOR A DEFAULT IN FURNISHING THE RETURN OF INCOME IN TIME. THE BASIS OF THE CHARGE IS THE PERIOD OF DEFAULT I .E. THE DELAY IN FURNISHING THE RETURN OF I.T.A. NOS. 82-87 & 88-93 /COCH/2010 (FOR AS TT. YEARS 2001-02 TO 2006-07) 4 INCOME BEYOND THE DUE DATE PRESCRIBED THERE-FOR AN D IN CASE NO RETURN IS FILED UP TO THE DATE OF COMPLETION OF THE ASSESSMENT U/S. 144; THE `DUE DATE I.E. WITH REFERENCE TO WHICH THE DELAY OR DEFAULT IS TO BE RECKONED BEING IN E ITHER CASE THE DATE SPECIFIED FOR FILING THE RETURN U/S. 139(1). THE BASE AMOUNT ON WHICH T HE INTEREST IS TO BE CHARGED IS THE TAX DETERMINED U/S. 143(1) OR ON REGULAR ASSESSMENT. EXPLANATION 3 TO S. 234A(1) CLARIFIES THAT WHERE THE ASSESSMENT IS FRAMED U/S. 147 OR U/S . 153A FOR THE FIRST TIME THE SAME IS TO BE REGARDED AS A REGULAR ASSESSMENT I.E. FOR THE PURPOSES OF S. 234A. SEC. 234A(2) PROVIDES FOR ADJUSTMENT OF THE INTEREST UNDER THE S ECTION AGAINST THAT PAID U/S. 140A I.E. UNDER SELF-ASSESSMENT WHICH SECTION PROVIDES THAT ANY PAYMENT THERE-UNDER IS TO BE FIRST ADJUSTED AGAINST THE INTEREST FOR THE DELAY IN FURN ISHING THE RETURN (S. 234A) AND THE DEFAULT OR DEFERMENT IN THE PAYMENT OF ADVANCE-TAX (SS. 234B AND 234C) (S. 140A(1) R/W EXPLANATION THERE-TO). SEC. 234A(3) FURTHER PROVIDES FOR CHARG E OF INTEREST IN CASE OF DEFAULT OF DELAY IN FURNISHING THE RETURN OF INCOME IN RESPONSE TO NOTICE U/S. 148 OR S. 153A WHICH IN CASE OF NON FILING OF THE RETURN IS TO EXTEND UP TO THE DATE OF COMPLETION OF ASSESSMENT U/S. 147 OR U/S. 153A AS THE CASE MA Y BE. THE PRINCIPAL AMOUNT FOR THE PURPOSE IS TO BE THE ADDITIONAL TAX DETERMINED ON S UCH ASSESSMENT I.E. VIS--VIS THAT COMPUTED EARLIER EITHER U/S. 143(1) OR ON REGULAR A SSESSMENT. S. 234(A)(4) PROVIDES FOR A CORRESPONDING INCREASE OR DECREASE IN INTEREST U/S. 234A(1) OR S. 234A(3) CONSEQUENT TO ANY INCREASE OR DECREASE RESPECTIVELY IN THE TAX LI ABILITY CONSEQUENT TO REVISION OF ASSESSMENT EITHER UNDER REVIEW AT THE INSTANCE OF THE ASSESSEE OR THE REVENUE OR FOLLOWING THE APPELLATE PROCEDURE OR WITH REFERENCE TO THE SETTLEMENT PROCEDURE UNDER THE ACT. THE SECTION IS COMPREHENSIVE COVERING ALL THE VARIOUS MODES BY WHICH THE ASSESSEES TAX LIABILITY FOR ANY YEAR IS DETERMINED . THE SOLE PREMISE OF FILING THE RETURN OF INCOME UNDER THE ACT BEING THE ASSESSMENT OF THE AS SESSEES TAX LIABILITY FOR THE RELEVANT YEAR THE IMPOSITION IS WITH REFERENCE THERE-TO SO THAT THERE IS A CLEAR AND RATIONAL NEXUS BETWEEN THE TWO . FURTHER AS THE OBJECT OF THE ASSESSMENT OF TAX IS ITS REALIZATION ANY REBATE TOWARD THE SAME OR THAT ALREADY DISCHARGED BY WAY OF PRE-PAID TAXES IS TO BE REDUCED THERE-FROM IN DETERMINING THE BASE (PRINCIP AL) AMOUNT ON WHICH THE INTEREST IS TO BE LEVIED MAKING THE PROVISION WHOLESOME. IN A PA RTICULAR CASE THE ASSESSEE MAY THOUGH FILING ITS RETURN AFTER DUE DATE CLAIM REFU ND OF PREPAID TAX ON THE BASIS OF A LOWER I.T.A. NOS. 82-87 & 88-93 /COCH/2010 (FOR AS TT. YEARS 2001-02 TO 2006-07) 5 RETURNED INCOME. AS THE DEFAULT I.E. THE DELAY I N FILING THE RETURN DOES NOT LEAD TO ANY PREJUDICE TO THE REVENUE NO INTEREST U/S. 234A WOU LD ARISE ON THE ACCEPTANCE OF THE RETURNED INCOME. INTEREST U/S. 244A I.E. ON THE E NSUING REFUND TO THE ASSESSEE WOULD STAND TO BE ADJUSTED FOR THE DELAY ATTRIBUTABLE TO THE ASSESSEE. WE SHALL NOW ADDRESS THE RESPECTIVE CASES OF BOTH THE ASSESSES-APPELLANTS. DR. PADMANABHA BHAT 5.2 EXAMINING THE ASSESSEES CASE IN THE LIGHT OF THE PROVISION WE ARE UNABLE TO SEE AS TO HOW HE IS AGGRIEVED. THE INTEREST EVEN AS OBSER VED BY THE BENCH IS VERY NOMINAL BEING ONLY TOWARD THE MARGINAL DELAY IN RETURNING T HE INCOME IN RESPONSE TO THE NOTICE U/S. 153A AND IN FACT FAIRLY CONCEDED TO BY THE L D. AR. THERE IS NO QUESTION OF CHARGE OF INTEREST U/S. 234A(1) WHERE THERE HAS BEEN A TIMELY FILING OF RETURN U/S. 139(1) WHILE WHERE NOT SO AS IS IN FACT THE CASE FOR ALL THE YE ARS (REFER PB PG. 19-26) THE SAME WOULD HAVE ALREADY BEEN LEVIED I.E. ON THE PROCESSING U /S. 143(1). DR. PUSHPA BHAT 5.3 IN THIS CASE ADMITTEDLY NO RETURNS HAVE BEEN FILED U/S. 139 FOR A.Y. 2001-02 TO 2006-07 SAVE FOR A.Y. 2005-06 FILED ON 31.3.2006 AND FOR WHICH YEAR THE CHARGE OF INTEREST IS THEREFORE ONLY NOMINAL. THE SAME THOUG H WE MAY CLARIFY STOOD SUBJECT ONLY TO PROCESSING U/S. 143(1). THAT BEING THE CASE THE REGULAR ASSESSMENT FOR ALL THE YEARS STANDS MADE FOR THE FIRST TIME ONLY U/S. 153A. NO D ISCREPANCY OR ANY OTHER INFIRMITY HAS BEEN POINTED OUT TO US IN THE WORKING OF THE INTER EST FOR EITHER ASSESSMENT FOR ANY OF THE YEARS AND WHICH EVEN IF SO; THE PROVISION BEING A MPLY CLEAR WOULD STAND TO BE REVISED TO BRING IT TO ACCORD WITH THE PROVISION/LAW. 5.4 COMING TO THE ISSUE ON MERITS THE ASSESSEES C ASE IS THAT SHE APPLIED FOR COPIES OF BOOKS OF ACCOUNT BANK PASS BOOKS AND OTHER RECORDS PERTAINING TO HER AS SEIZED DURING THE SEARCH IMMEDIATELY THEREAFTER I.E. ON 12.8.2 006. SUBSEQUENTLY REMINDERS WERE ALSO ISSUED AND IT FINALLY GRANTED THE SAME ONLY BY END OF APRIL 2007 AFTER THE ISSUE OF NOTICE U/S. 153A ON 03.4.2007 (REFER PB PGS. 63 TO 72). THE RETURNS U/S. 153A WERE ACCORDINGLY I.T.A. NOS. 82-87 & 88-93 /COCH/2010 (FOR AS TT. YEARS 2001-02 TO 2006-07) 6 FILED ON 13.7.2007. THE DELAY IN ALLOWING THE ASSE SSEES REQUEST FOR THE COPIES OF THE SEIZED MATERIALS LED TO A DELAY IN FURNISHING THE R ETURNS AND THEREFORE SHE COULD NOT POSSIBLY BE IN LAW OR AT LEAST JUSTIFIABLY PENAL IZED FOR THE DELAY ATTRIBUTABLE TO THE REVENUE WHICH PERIOD THUS OUGHT TO BE EXCLUDED IN ARRIVING AT HER LIABILITY TO INTEREST U/S. 234A. RELIANCE STANDS PLACED ON THE DECISION IN TH E CASE OF PARAS BANSI LAL PATEL VS. B.M. JANDEL 267 ITR 108 (GUJ.). THE LD. CIT(A) DID NOT FIND THE SAME ACCEPTABLE AS INTEREST U/S. 234A IS MANDATORY AND NO DISCRETION WAS AVAILABLE WITH THE ASSESSING OFFICER (AO). THE DECISION RELIED UPON WAS WITH REF ERENCE TO A WAIVER PETITION FILED BEFORE THE CHIEF COMMISSIONER OF INCOME-TAX (CCIT) U/S. 119(2)(A) AND THUS COMPLETELY DISTINGUISHABLE ON FACTS. 5.5 WE HAVE GIVEN OUR CAREFUL CONSIDERATION TO THE ISSUE AND FIND THE ASSESSEES CASE AS NOT MAINTAINABLE BOTH ON FACTS AND IN LAW. THE ASSESSEE STATES THAT IT WAS SINCE IMMEDIATELY AFTER THE SEARCH (I.E. THE SECOND WEEK OF AUGUST 2006) SEEKING COPIES OF THE MATERIALS SEIZED (IN-SO-FAR AS THE SAME RELATED TO HER) TO ENABLE HER TO FILE HER RETURNS OF INCOME. HOWEVER UNDER WHICH PROVISION OF LAW WOUL D THE RETURNS CONTEMPLATED FOR FILING FALL; THE TIME LIMIT FOR FURNISHING THE RET URN OF INCOME U/S. 139(1) AS WELL AS U/S. 139(4) HAVING ALREADY EXPIRED ON THE DATE OF SEARC H AND SHE HAVING NOT BEEN ISSUED ANY NOTICE U/S. 153A? THE RETURN/S EVEN IF FILED WOU LD BE TO NO CONSEQUENCE IN LAW I.E. IN- SO-FAR AS THE IMPUGNED LEVY OF INTEREST IS CONCERNE D. THE NOTICES U/S. 153A R/W S. 153C WERE ISSUED TO THE ASSESSEE ON 03.4.2007 AND THE R ELEVANT MATERIAL BY HER OWN ADMISSION MADE AVAILABLE BY THE END OF APRIL 2007 I.E. BEFORE THE EXPIRY OF 30 DAYS ALLOWED FOR FILING THE RETURN THERE-UNDER. THE ASSE SSEES CASE THOUGH IS UNDERSTANDABLE TO THE EXTENT THE DELAY IN FILING THE RETURN U/S. 1 53A IS ATTRIBUTABLE TO THE REVENUE. HOWEVER HERE AGAIN WE FIND THE ASSESSEE TO HAVE N O CASE AT ALL. FIRSTLY THE ASSESSEES APPLICATION TO THE AO (I.E. AFTER THE ISSUE OF NOT ICE/S U/S. 153A) IS ONLY ON 23.4.2007 AND THE MATERIALS ADMITTEDLY MADE AVAILABLE TO HER IMME DIATELY THEREAFTER. SECONDLY IT NEEDS TO BE APPRECIATED THAT THE SAME WOULD BE OF RELEVAN CE ONLY IN DETERMINING THE INTEREST LIABILITY U/S. 234A(3) WHILE IN THE INSTANT CASE T HE INTEREST LIABILITY IN TERMS OF THE CLEAR MANDATE OF THE SECTION IS U/S. 234A(1). THE DEFAUL T COMMENCING WITH THE EXPIRY OF THE I.T.A. NOS. 82-87 & 88-93 /COCH/2010 (FOR AS TT. YEARS 2001-02 TO 2006-07) 7 `DUE DATE WHERE NO RETURN U/SS. 139(1) OR 139(4) OR 142(1) IS FILED CONTINUES UP TO THE DATE OF ASSESSMENT U/S. 144 OR WHERE THERE IS NO SUCH ASSESSMENT UP TO THE DATE OF ASSESSMENT U/S. 147 OR S.153A MADE FOR THE FIRST T IME AS IN THE INSTANT CASE. AS SUCH ONCE THE DATE OF FILING OF THE RETURN U/S. 139(4) I.E. THE BELATED RETURN IS OVER THE ONLY OPTION AVAILABLE WITH THE ASSESSEE WHERE THERE IS NO NOTICE U/S. 142(1) IS TO FILE A RETURN REQUESTING FOR ITS REGULARISATION BY THE ISSUE OF N OTICE U/S. 148. THE COMPLETION OF ASSESSMENT U/S. 147 WOULD THEN MARK THE CLOSURE OF THE PERIOD OF DEFAULT. THE PROVISION IS HARD IN SUCH CASES IN THE SENSE THAT WHILE THE RETURN STANDS FILED EARLIER IN TIME AS (SAY) U/S. 148 OR U/S.153A) (AS IN THE INSTANT CASE ON 13 .7.2007) THE INTEREST PERIOD EXTENDS WELL BEYOND THE SAME. FROM THE REVENUES STAND POI NT THE POSITION IS UNDERSTANDABLE AS IT IS ONLY ON THE DETERMINATION OF THE TAX LIABILIT Y WHICH IS ONLY AT ITS INSTANCE BY WAY OF ISSUE OF NOTICE U/S. 148 OR SECTION 153A THAT THE REVENUE WHICH BUT FOR ITS ACTION WOULD HAVE ESCAPED ASSESSMENT TO TAX IS QUANTIFIED. PERH APS LIMITING THE PERIOD OF DEFAULT TO THE DATE TO THE FILING OF THE RETURN IN RESPONSE TO THE NOTICE U/S. 148/153A IN CASE OF FIRST ASSESSMENT U/S. 147 OR U/S. 153A WOULD MAKE THE PR OVISION LESS ONEROUS AND MORE EQUITABLE CONSIDERING THAT THE DEFAULT SOUGHT TO B E IMPOSTED IS THE DELAY IN OR THE NON FILING OF THE RETURN OF INCOME FOR A PARTICULAR YEA R. HARDSHIP APART WHICH BY ITSELF WOULD NOT IN ANY MANNER DETRACT FROM THE LEGAL VALIDITY O F A PROVISION AS IS TRITE LAW THE LEVY OF INTEREST U/S. 234A IS CLEARLY IN ACCORDANCE WITH TH E CLEAR PROVISION OF LAW. THE PROVISIONS OF SECTIONS 244A 234B AND 234C ARE IT MAY BE CLAR IFIED CONSTITUTIONALLY VALID; BESIDES THE LEVY THEREBY BEING MANDATORY WITH NO DISCRETIO N IN THE MATTER TO THE ASSESSING AUTHORITY AS HELD BY THE APEX COURT INTER ALIA VIDE THE DECISION BY ITS CONSTITUTION BENCH IN CIT V. ANJUM M.H. GHASWALA (2001) 252 ITR 1 (SC) WITH THE CASES OF GENUINE HARDSHIP AS WE SHALL PRESENTLY SEE BEING COVERED BY THE SCOPE OF S. 119(2)(A) OF THE ACT. 5.6 THE POSITION FOR A.Y. 2006-07 HOWEVER IS SOME WHAT DIFFERENT. THIS IS AS THE TIME FOR FURNISHING THE RETURN UNDER SECTION 139(4) HAD NOT EXPIRED AS ON THE DATE OF SEARCH. THE ASSESSEES PLEA THAT IT WAS CONSTRAINE D IN FILING THE RETURN FOR WANT OF DOCUMENTS IS TO SOME EXTENT VALID FOR THE SAID YEAR . SO HOWEVER THE LAW IS NOT WITHOUT RECOURSE. SEC. 119(2)(A) EMPOWERS THE CBDT TO FOR THE PURPOSE OF PROPER AND EFFICIENT I.T.A. NOS. 82-87 & 88-93 /COCH/2010 (FOR AS TT. YEARS 2001-02 TO 2006-07) 8 MANAGEMENT OF THE WORKING OF ASSESSMENT AND COLLECT ION OF REVENUE ISSUE FROM TIME TO TIME GENERAL AND SPECIAL ORDERS WHETHER BY WAY OF RELAXING THE PROVISIONS AMONG OTHERS OF SS. 234A 234B 234C OR OTHERWISE. THE CBDT HAS ISSUED INSTRUCTION NO. 400/234/95-IT(B) DATED 23.5.1996. VIDE THE SAME T HE CBDT EMPOWERS THE CCIT/DGIT TO REDUCE OR WAIVE INTEREST U/SS. 234A 234B AND 2 34C IN SOME DEFINED SITUATIONS. PARA 2(A) THEREOF SPECIFICALLY PROVIDES FOR A SITUATION AS OBTAINS IN THE INSTANT CASE. AS SUCH THE PROPER COURSE FOR THE ASSESSEE WAS TO FILE A WA IVER PETITION WITH THE CCIT/DGIT AFTER PAYING THE TAX ON THE ASSESSED INCOME (EXCEPT THE I NTEREST FOR WHICH WAIVER IS BEING SOUGHT) AS PROVIDED FOR BY PARA 1 OF THE SAID INST RUCTION MAKING OUT A SPECIFIC CASE WITH RESPECT TO INTEREST RELATABLE TO THE PERIOD FOR WHI CH THE DELAY IN FILING THE RETURN CANNOT BE REASONABLY ATTRIBUTABLE TO THE ASSESSEE. THE DECIS ION RELIED UPON BY THE ASSESSEE IS ALSO WITH REFERENCE TO THE SAID INSTRUCTION AND STAND R IGHTLY DISTINGUISHED BY THE LD. CIT(A) AS THEREFORE NOT APPLICABLE IN THE FACTS AND CIRC UMSTANCES OF THE PRESENT CASE. THE ASSESSEE HAVING NOT MADE ANY SUCH CASE/APPLICATION NO INFIRMITY INFLICTS THE ACTION OF THE AO IN CHARGING THE IMPUGNED INTEREST. IT ACCORDING LY FAILS ON ITS RELEVANT GROUND/S. WE DECIDE ACCORDINGLY. INTEREST U/S. 234B DR. PADMANABHA BHAT 6. THE CONTROVERSY IN THIS CASE; THE PROVISION BEIN G MANDATORY IS WHETHER THE INTEREST CHARGEABLE WOULD BE U/S. 234B(1) OR U/S. 2 34B(3). THIS IS AS FOR AYS 2002-03 TO 2005-06 THE ASSESSEE HAD BEEN ACTUALLY ISSUED A RE FUND OUT OF THE ADVANCE-TAX I.E. ON THE PROCESSING OF HIS RETURN U/S. 143(1) (PB PGS. 1 9 - 25) . HOW COULD THEN THERE BE A DEFAULT IN THE PAYMENT OF ADVANCE TAX ? THE ASSESSEE COULD NOT POSSIBLY ANTICIPATE THAT AN ACTION U/S. 147 OR S. 153A WOULD OCCUR IN FUTURE L EADING TO THE PAYMENT OF TAX FOR THE YEAR/S. IN OTHER WORDS THE ASSUMPTION THAT UNDERLI ES THE CHARGE OF INTEREST U/S. 234B(1) FOR THESE YEARS (I.E. FROM THE FIRST DAY OF THE RE LEVANT ASSESSMENT YEAR) I.E. THAT THE ASSESSEE OUGHT TO HAVE PAID THE ADVANCE-TAX DURING THE RELEVANT PREVIOUS YEAR ITSELF CANNOT HOLD AND IN FACT REPRESENTS AN IMPOSSIBILI TY. INTEREST UNDER SUCH CIRCUMSTANCES COULD IF AT ALL ONLY BE LEVIED U/S. 234B(3) I.E. THE PROVISION WHICH PROVIDES FOR A REVISION IN INTEREST CONSEQUENT TO AN INCREASE IN T HE ASSESSED TAX FOLLOWING AN ASSESSMENT I.T.A. NOS. 82-87 & 88-93 /COCH/2010 (FOR AS TT. YEARS 2001-02 TO 2006-07) 9 U/S. 147 OR U/S. 153A. THE SAME PROVIDES FOR THE L IABILITY TO INTEREST ON THE ADDITIONAL TAX DETERMINED ON SUCH ASSESSMENT FROM THE DAY FOLLOWIN G THE DATE OF PROCESSING U/S. 143(1) OR OF REGULAR ASSESSMENT AS THE CASE MAY BE TO SU CH ASSESSMENT. IN FACT THIS WOULD ALSO NOT APPLY AS THE QUESTION OF INCREASE IN INTEREST DOES NOT ARISE WHEN THERE HAS BEEN NO CHARGE OF INTEREST U/S. 234B(1) I.E. ON THE PROCE SSING U/S. 143(1) IN THE FIRST PLACE. RELIANCE WAS PLACED ON SEVERAL DECISIONS AS DATAMATICS LTD. VS. CIT (ASST.) 299 ITR (AT) 286 (MUM.); K. SUNIL KINI VS. ITO 6 SOT 139 (BANG.); AND REVATHI EQUIPMENTS LTD. VS. CIT (DY.) 108 TTJ 409 (CHENNAI). THE REVENUE ON THE OTHER HAND PLACED RELIANCE ON THE DECISION IN THE CASE OF CIT VS. ANJUM M.H. GHASWALA (SUPRA) BESIDES IN THE CASE OF CIT V. UPPER INDIA STEEL MFG. & ENGG. CO. LTD . 279 ITR 123/141 TAXMAN 692 (P&H); AND UNION HOME PRODUCTS LTD. V. UOI 215 ITR 758/84 TAXMAN 303 (KAR.). 7. THE ASSESSEES CASE IN PRINCIPLE FOR AYS 2002-03 TO 2005-06 IS THAT IT IS NOT LIABLE FOR ANY INTEREST U/S. 234B AS S. 234B(3) IS ATTRAC TED ONLY WHEN THERE HAS BEEN A CHARGE OF INTEREST U/S. 234B(1). THE LD. CIT(A) DID NOT FIND THE ASSESSEES STAND AS ACCEPTABLE AS EXPLANATION 2 TO S. 234B(1) CLEARLY PROVIDES THAT THE ASSESSMENT U/S. 147 OR U/S. 153A WHERE THERE IS NO PRIOR ASSESSMENT U/S. 143 OR U/S. 144 I.E. IS FOR THE FIRST TIME SHOULD BE TAKEN AS THE REGULAR ASSESSMENT FOR THE PURPOSES OF THE SECTION. HE DID NOT HOWEVER DEAL WITH THE DECISIONS CITED BY THE ASSESSEE. 7.1 WE HAVE GIVEN OUR CAREFUL CONSIDERATION TO THE MATTER ALSO CONSIDERING THE DECISIONS RELIED UPON THOUGH FIND THEM TO BE OF LI TTLE ASSISTANCE TO THE ASSESSEE WHOSE CASE SQUARELY FALLS UNDER EXPLANATION 2 TO S. 234B(1) EVEN AS POINTED OUT BY THE LD. CIT(A). THE TERMS OF THE SECTION ARE CLEAR AND THE RE IS NO SCOPE FOR ANY ANTICIPATION AT ALL EVEN AS SOUGHT TO BE EMPHASIZED BY THE LD. DR DURING THE HEARING. THE INCOME THOUGH DETERMINED AND BROUGHT TO TAX SUBSEQUENTLY IS ONLY FOR THE RELEVANT YEAR . AS SUCH THE CONTENTION THAT THE ASSESSEE COULD NOT HA VE ANTICIPATED A RE-ASSESSMENT OR SEARCH AND THE CONCOMITANT ASSESSMENT U/S. 147 OR U/S. 153A IS FACILE. THE CHARGE OF ADVANCE-TAX IS NOT INDEPENDENT OF OR REMOVED FROM T HE CHARGE OF INCOME-TAX AND STANDS PROVIDED FOR BY S. 4 THE CHARGING SECTION (TO TAX) UNDER THE ACT ITSELF (S. 4(2)). THAT IS I.T.A. NOS. 82-87 & 88-93 /COCH/2010 (FOR AS TT. YEARS 2001-02 TO 2006-07) 10 SS. 207 AND 208 PROVIDING FOR PAYMENT OF ADVANCE-T AX ON `CURRENT INCOME DURING THE RELEVANT PREVIOUS YEAR IN A DEFINED SITUATION DO NO T CREATE ANY INDEPENDENT LIABILITY BUT IS ONLY TOWARD THE LIABILITY TO INCOME-TAX ON THE INCO ME CHARGEABLE TO TAX. AS EXPLAINED BY THE APEX COURT IN THE CASE OF AMONG OTHERS CIT VS. SHELLY PRODUCTS (2003) 261 ITR 367 (SC) THE CHARGE OF INCOME-TAX IS ATTRACTED AS SOON AS THE INCOME ACCRUES OR ARISES TO THE ASSESSEE. THE OBLIGATION TO FILE THE RETURN OF INCO ME AND THE PAYMENT OF TAX IS ONLY A PART OF THE MACHINERY PROVIDED BY THE ACT FOR ASSESSING THE INCOME CHARGEABLE TO TAX AND THE DISCHARGE OF THE CONSEQUENT TAX LIABILITY. THE ARG UMENT RAISED IS THUS WITHOUT ANY BASIS IN LAW. ONCE THE ASSESSEE UNDER-REPORTS HIS INCOME FOR ANY YEAR THE TAX LIABILITY ON THE ADDITIONAL INCOME THOUGH DETERMINED SUBSEQUENTLY IS ONLY THE TAX LIABILITY FOR THE SAID YEAR ENTAILING A CONCOMITANT LIABILITY TOWARD ADVA NCE-TAX. IT IS ONLY THE CURRENT INCOME THAT IS BEING SUBJECT TO ADVANCE-TAX AND CONSEQUEN TLY THERE IS NO INCONSISTENCY BETWEEN SS. 207 TO 210 AND S. 234B. THE MATTER IN FACT CANN OT BE CONSIDERED AS RES INTEGRA AND STANDS SETTLED BY THE APEX COURT VIDE ITS DECISIONS AS IN THE CASE OF CIT V. HINDUSTAN BULK CARRIERS (2003) 259 ITR 449/475 (SC). IT HELD THAT IT COULD NOT EVEN BE COUNTENANCED THAT NO INTEREST IS CHARGEABLE FOR THAT PORTION OF INCOME FORMING PART OF THE TOTAL INCOME AS DETERMINED BY THE (SETTLEMENT) COMMISSION WHICH HAD NOT BEEN EARLIER DISCLOSED BEFORE THE AO. THE TERMINUS POINT FOR THE LEVY OF I NTEREST HAD TO BE DATE OF PASSING OF THE ORDER U/S. 245D(4). ANY OTHER INTERPRETATION WOULD LEAD TO AN ABSURD RESULT INASMUCH AS IT WOULD PLACE THE ASSESSEE WHO HAS CONCEALED THE INCO ME IN A MORE ADVANTAGEOUS POSITION THAN THE ONE WHO HAS DECLARED HIS INCOME TRULY AND FAIRLY. 7.2 COMING TO THE QUESTION OF WHETHER THERE COULD B E AN INTEREST LIABILITY U/S. 234B(3) WHERE THERE HAS BEEN NO LIABILITY U/S. 234B(1) WE THINK THAT THE QUESTION IS ILL-CONCEIVED. THIS IS AS THE ASSESSEES CASE FALLS TO BE COVERED UNDER EXPLANATION 2 TO S. 234B(1); THE ASSESSMENT HAVING BEEN FRAMED FOR THE FIRST TIME U/ S. 153A. AN `ASSESSMENT U/S. 147 OR U/S. 153A WOULD ONLY BE AN ASSESSMENT U/S. 143(3) O R S. 144 AND AS SUCH A REGULAR ASSESSMENT PER SE (S. 2(40)). EVEN ASSUMING THAT SAME COULD BE U/S. 143(1) I.E. WITHOUT FOLLOWING THE VERIFICATION PROCEDURE OR IN CASE OF NON FILING OF RETURN OR EXTENSION OF COOPERATION BY WAY OF BEST JUDGMENT ASSESSMENT U/S . 144 IT WOULD STILL BE ONLY A S. 147 I.T.A. NOS. 82-87 & 88-93 /COCH/2010 (FOR AS TT. YEARS 2001-02 TO 2006-07) 11 OR S. 153A ASSESSMENT SO THAT IT IS BY DEFINITION A REGULAR ASSESSMENT FOR THE PURPOSES OF S. 234A/234B. IN FACT THIS WAS STATED ONLY TO MEET A HYPOTHETICAL ARGUMENT; THE ASSESSMENTS IN THE PRESENT CASE BEING ONLY U/S. 153 A R/W S.143(3). AS SUCH WHERE IT IS THE FIRST ASSESSMENT FOR THE RELEVANT YEAR THE PRO CESSING U/S. 143(1) NOT QUALIFYING - AS IS SUFFICIENTLY WELL-SETTLED - TO BE AN ASSESSMENT IT IS TO BE REGARDED AS A REGULAR ASSESSMENT FOR THE PURPOSES OF THE SECTION IMPLYING CHARGE OF INTEREST U/S. 234B(1) COMMENCING FROM THE FIRST DAY OF THE RELEVANT ASSESSMENT YEAR. THE SCOPE OF THE SECTION MAKES IT APPARENT THAT THE ASSESSED TAX WITH REFERENCE TO W HICH [OR IN THE SHORTFALL (BY WAY OF ADVANCE-TAX) WITH REFERENCE TO WHICH] THE INTEREST U/S. 234B IS LEVIABLE IS BASED ON THE TAX ON THE TOTAL INCOME DETERMINED U/S. 143(1) ONLY WHERE THERE IS NO REGULAR ASSESSMENT. FURTHER EXPLANATION 2 TO S. 234B(1) R/W S. 234B(3) ENSURES THAT THE INTE REST UNDER THE SECTION COMMENCES FROM THE FIRST DAY OF THE RELEVAN T ASSESSMENT YEAR TO THE DATE OF THE LAST REGULAR ASSESSMENT I.E. WITHOUT ANY INTERREG NUM. IN FACT THE PROPOSITION IS NO MORE RES INTEGRA HAVING RECEIVED THE CONSIDERATION AND CONSENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF SOUTH INDIAN BANK LTD. V. CIT 325 ITR 517 (KER.) WHICH FOUND THE PROPOSITION AS BEING SOUGHT TO BE ADVANCED BY T HE ASSESSEE AS UNACCEPTABLE HOLDING THAT INTEREST U/S. 234B(3) WOULD HOLD IRRESPECTIVE OF WHETHER THE PRECEDING ASSESSMENT RESULTED IN A CHARGE OF INTEREST U/S. 234B(1) OR NO T. READING THE PROVISION HOLISTICALLY IT EXPLAINED THAT ALL THAT IT PROVIDES FOR IS THAT THE INCREASED TAX LIABILITY BE ALSO CORRESPONDINGLY SUBJECT TO INTEREST ALBEIT FROM TH E DATE IMMEDIATELY SUCCEEDING THE DATE OF THE PRECEDING ASSESSMENT. IN THAT CASE INCIDEN TALLY THERE WAS NO LIABILITY TO INTEREST U/S. 234B(1) ON REGULAR ASSESSMENT WHICH WAS UNDER S. 147 R/W S. 143(3) OF THE ACT AND THE QUESTION OF CHARGE OF INTEREST AROSE ON A SECON D ASSESSMENT U/S. 147. THE DECISION ALSO CLARIFYING THE SCOPE AND APPLICABILITY OF EXPLANATION 2 TO S. 234B(1) IS SQUARELY APPLICABLE IN THE PRESENT CASE EVEN AS OBSERVED BY THE BENCH DURING THE HEARING WITH THE LD. AR CONCEDING TO THE SAME BEING AGAINST THE ASSE SSEE. 7.3 AS REGARDS THE DECISIONS RELIED UPON WE FI ND THE SAME INAPPLICABLE IN THE FACTS OF THE CASE NARRATED IN THE INITIAL PART OF THIS ORDE R (REFER PARA 3). THE DECISION IN THE CASE OF DATAMATICS LTD . (SUPRA) WHILE DISCUSSING THE SCOPE OF EXPLANATION 2 TO S. 234B(1) (PARA I.T.A. NOS. 82-87 & 88-93 /COCH/2010 (FOR AS TT. YEARS 2001-02 TO 2006-07) 12 17 PG. 293) ADMITS THAT INTEREST U/S. 234B(1) IN THE CASE OF FIRST ASSESSMENT U/S. 147 OR S. 153A WOULD NOT HOLD WHERE THE ASSESSEE COULD NOT A NTICIPATE THE ENHANCEMENT IN INCOME EVEN AFTER EXERCISING DUE CARE AND DILIGENCE . THAT IS TO SAY THAT IT WOULD BE OTHERWISE APPLICABLE OR PUT DIFFERENTLY THE APPLICATION OF EXPLANATION 2 IS THE RULE AND ITS NON- APPLICATION AN EXCEPTION. THE ONUS TO ESTABLISH TH AT CIRCUMSTANCES WARRANTING ITS NON- APPLICATION PREVAILED IS CLEARLY ON THE ASSESSEE A ND WHICH WE FIND AS TOTALLY ABSENT IN THE PRESENT CASE. THE VOLUNTARY OFFER OF INCOME WAS MADE ONLY TO COVE R UP THE INCRIMINATING MATERIALS GATHERED AND SEIZED IN SEARCH AND IN THE CASE OF WIFE NO RETURNS SAVE FOR ONE YEAR WERE FILED AT ALL . THE SECOND PROPOSITION LAID DOWN IN THE CASE OF DATAMATICS LTD . (SUPRA) I.E. THAT INTEREST U/S. 234B(3) WOULD APP LY ONLY WHERE INTEREST U/S. 234B(1) IS FIRST LEVIABLE HAS BEEN FIRSTLY FOUND AS NOT APP LICABLE IN THE FACTS OF THE CASE THE INTEREST LEVIED BEING ONLY U/S. 234B(1) AND SECO NDLY STANDS DISAPPROVED BY THE HONBLE HIGH COURT IN THE CASE OF SOUTH INDIAN BANK LTD. ( SUPRA) (REFER PARA # 7.2). IN THE CASE OF K. SUNIL KINI VS. ITO (SUPRA) THERE IS NO DISCUSSION OR REFERENCE TO EXPLANATION 2 TO S. 234B(1); THE TRIBUNAL SOLELY RELYING ON THE DECISION IN THE CASE OF KANGRA BAJRI CO. VS. CIT 90 ITD 124 (CHD-TRIB.) IN WHICH CASE THE ASSESSM ENT YEARS INVOLVED WERE UP TO A.Y. 1987-88 WHILE S. 234B ITS ELF HAS COME ON THE STATUTE BOOK W.E.F. 1.4.1989 SO THAT IT IS APPLICABLE ONLY FROM A.Y. 1989-90 WITNESSING SEVERAL AMENDMENTS THERE-TO FROM TIME TO TIME MOST WITH RE TROSPECTIVE EFFECT AND WITHOUT IMPACTING THOUGH CLARIFYING THE SCOPE AND AMBIT O F THE PROVISION. THE SAID DECISION WOULD THEREFORE NOT APPLY. IN THE CASE OF REVATHI EQUIPMENTS LTD. VS. CIT (SUPRA) THE LIABILITY TO TAX AND CONSEQUENTLY TO ADVANCE-TAX AROSE ONLY DUE TO TH E CHANGE IN LAW MADE APPLICABLE FROM AN EARLIER DATE WHILE THE APPELLANT-COMPANY HAD PA ID THE ADVANCE-TAX DURING THE RELEVANT PREVIOUS YEAR I.E. IN TERMS OF THE LAW AS INTERPR ETED BY THE HONBLE JURISDICTIONAL HIGH COURT. CLEARLY NO DEFAULT COULD BE ASCRIBED TO THE ASSESSEE WHICH PAID THE BALANCE ADDITIONAL TAX BY WAY OF SELF ASSESSMENT TAX AS EAR LY AS IN AUGUST 2001 WELL BEFORE THE FILING OF THE RETURN ON 30.10.2001. IT WAS UNDER T HESE CIRCUMSTANCES THAT THE PRINCIPLE OF NON-ANTICIPATION OR IMPOSSIBILITY WAS APPLIED AND THE APPELLANT HELD AS NOT LIABLE TO INTEREST U/S. 234B FOLLOWING THE GUIDELINES PER SE VERAL DECISIONS THE PRINCIPAL BEING CIT I.T.A. NOS. 82-87 & 88-93 /COCH/2010 (FOR AS TT. YEARS 2001-02 TO 2006-07) 13 VS. SEDCO FOREX INTERNATIONAL DRILLING CO. LTD. 264 ITR 320 (UTTARANCHAL). THE FACTS ARE CLEARLY DISTINGUISHABLE AND IT IS NOT HARD TO SEE THAT THE SAME REPRESENTS A CASE FALLING UNDER THE EXCEPTIONAL CATEGORY REFERRED TO EARLIER. 7.4 IN RESPECT OF THE ASSESSEES SECOND ARGUMENT T HAT THE PROVISION OF S. 153A COMES INTO EFFECT ONLY FROM 1.6.2003 SO THAT IT WOULD AP PLY ONLY FROM A.Y. 2004-05 ONWARDS THE SAME HAS BEEN AGAIN RIGHTLY REJECTED BY THE L D. CIT(A) WITH REFERENCE TO DECISIONS AS IN THE CASE OF MITHILESH KUMARI VS. PREM BEHARI KHARE (1989) 177 ITR 97 (SC) AND CIT VS . ACHALADAS DHANRAJ 217 ITR 799 (RAJ.) THERE IS IN FACT IT STANDS EX PLAINED BY HIM NO RETROSPECTIVE APPLICATION; THE PROCEEDINGS CONCLUDING ONLY ON OR AFTER 1.6.2003 I.E. THE DATE ON WHICH THE PROVISION COMES ON THE STATUTE. WE FULLY ENDORSE THE VIEW OF THE LD. CIT(A). THE LEVY OF INTEREST IT IS TRITE LAW IS A PART OF THE PROCESS OF ASSESSMENT WHICH IS FRAMED FOR ALL THE YEARS AFTER 1.6.2003. A S SUCH WHEN THE ASSESSEE DOES NOT OR COULD NOT LEGALLY DISPUTE THE VALIDITY OR JURISDIC TION TO FRAME THE ASSESSMENT U/S. 153A WE WONDER HOW COULD IT TO THE CHARGE OF INTEREST TH ERE-UNDER PARTICULARLY WHERE SPECIFICALLY PROVIDED FOR IN THE INTEREST CHARGING SECTION? THE COOPTION OF S. 153A IN S. 234A/234B IS FROM THE DATE OF ITS INCEPTION I.E. 01/6/2003. FURTHER THE EXPLANATION TO SEC. 153A ALSO PROVIDES FOR THE APPLICABILITY OF AL L THE PROVISIONS OF THE ACT I.E. INCLUDING INTEREST CHARGING PROVISIONS TO THE ASSE SSMENTS THERE-UNDER. THE DECISIONS RELIED UPON BY THE LD. CIT(A) AS WELL AS IN THE CA SE OF SOUTH INDIAN BANK LTD. (SUPRA) ARE FULLY APPLICABLE. THE ARGUMENT IS THUS NOT ACCE PTABLE AND STANDS RIGHTLY REJECTED. 7.5 IN VIEW OF THE FOREGOING WE FIND NO MERIT IN THE ASSESSEES CASE FOR ANY OF THE YEARS UNDER APPEAL AND CONSEQUENTLY UPHOLD THE IM PUGNED ORDER IN ITS RESPECT. DR. PUSHPA BHAT 8. THERE HAS BEEN IN THE FACTS OF THE CASE NO F ILING OF ANY RETURN OF INCOME U/S. 139 FOR AY 2001-02 TO AY 2004-05 AND FOR AY 2006-07 AND CONSEQUENTLY NO PROCESSING THEREOF U/S. 143(1) AND THE IMPUGNED ASSESSMENT IS FRAMED FOR THE FIRST TIME. FOR AY 2005-06 THE RETURN HAS BEEN FILED ON 31/3/2006 TH OUGH DID NOT RESULT IN ANY REFUND ON ITS I.T.A. NOS. 82-87 & 88-93 /COCH/2010 (FOR AS TT. YEARS 2001-02 TO 2006-07) 14 PROCESSING U/S. 143(1). ACCORDINGLY FOR THE DETAIL ED REASONS STATED BY US WHILE DISCUSSING THE ISSUE IN THE CASE OF DR. PADMANABHA BHAT (REFER PARA # 7) WE CONFIRM THE IMPUGNED ORDER ON THIS GROUND/S AS WELL. INTEREST U/S. 234C 9. THE ASSESSEE (DR. PADMANABHA BHAT) HAS NOT MADE OUT ANY CASE IN RESPECT OF THIS LEVY - WHICH WE FIND STANDS IMPOSED FOR AY 2003-04 TO AY 2006-07 - EITHER BEFORE US OR AS WE OBSERVE BEFORE THE FIRST APPELLATE AUTHO RITY WHO HAS CONFIRMED THE SAME AS BEING ONLY CONSEQUENTIAL. INTEREST U/S.234C IS ONLY WITH REFERENCE TO THE RETURNED INCOME AND RESULTANTLY IS NOT IMPACTED BY ANY CHANGES/AD JUSTMENTS TO THE SAME IN ASSESSMENT. THE CHALLENGE THERETO IS THUS WITHOUT MERIT. LIKE -WISE FOR DR. PUSHPA BHAT WHERE THE LEVY IS FROM A.Y. 2002-03 ONWARDS. THE IMPUGNED ORD ER/S IS UPHELD. INTEREST U/S. 234D 10. THE SAME IS LEVIABLE IN CASE THE REFUND ARISI NG OUT OF PROCESSING U/S. 143(1) IS SUBSEQUENTLY FOUND IN CONSEQUENCE TO A REGULAR ASS ESSMENT AS HAVING BEEN GRANTED IN EXCESS AND THUS IS WITHDRAWN; FOR THE PERIOD COMM ENCING FROM THE DATE OF GRANT OF REFUND TO THAT OF THE REGULAR ASSESSMENT. THE SAME STANDS LEVIED ONLY IN THE CASE OF DR. PADMANABHA BHAT. THE CONTROVERSY OBTAINS IN VIEW OF THE SAID SECTION HAVING BEEN BROUGHT ON THE STATUTE BOOK BY THE FINANCE ACT 200 3 W.E.F. 1.6.2003. WHILE THE ASSESSEE CLAIMS THAT IT WOULD APPLY ONLY FROM A.Y. 2004-05 I.E. FOR AY 2004-05 AND AY 2005- 06 [CITING SEVERAL DECISIONS BY THE TRIBUNAL PRINC IPALLY ITO VS. EKTA PROMOTERS PVT. LTD . 113 ITD 719/305 ITR (AT) 1 (DEL)] THE REVENUES CA SE IS THAT THE SAME WOULD APPLY WHERE THE REGULAR ASSESSMENT IS MADE ON OR AFTER 1. 6.2003 SO THAT IT WOULD APPLY FOR THE OTHER TWO YEARS INVOLVED I.E. AY 2002-03 & AY 200 3-04 AS WELL RELYING ON THE DECISION IN THE CASE OF MITHILESH KUMARI VS. PREM BEHARI KHARE (SUPRA) AND ACHALDAS DHANRAJ (SUPRA). THE LD. CIT(A) HAS AGAIN NOT DISCUSSED OR DEALT WITH THE DECISIONS BY THE TRIBUNAL CITED BY THE ASSESSEE BEFORE HIM. THE HONBLE JURISDICTIONAL HIGH COURT HAS SINCE IN THE CASE OF CIT V. KERALA CHEMICALS AND PROTEINS LTD. 323 ITR 584 (KER.) CLARIFIED THAT THE PROVISION OF S. 234D IS NOT SPEC IFIC TO ANY ASSESSMENT YEAR AND WOULD I.T.A. NOS. 82-87 & 88-93 /COCH/2010 (FOR AS TT. YEARS 2001-02 TO 2006-07) 15 APPLY WHERE ITS CONDITIONS ARE MET TO ANY YEAR. THE INTEREST HOWEVER WOULD BE LEVIABLE ONLY FOR THE PERIOD 1.6.2003 ONWARDS; THE PROVISION COMING ON THE STATUTE ONLY WITH EFFECT FROM THAT DATE. THE ASSESSE-APPELLANT ACCO RDINGLY HAS NO CASE IN PRINCIPLE. IN THE FACTS OF THE CASE THE RETURN FOR A.Y. 2002-03 STAN DS FILED ON 31.3.2003 SO THAT THE DATE OF GRANT OF REFUND WHICH IS THE INITIAL OR THE STARTI NG POINT OF TIME FOR THE CHARGE OF INTEREST COULD BE PRIOR TO 1.6.2003 THE DATE OF ITS PROCES SING BEING NOT CLEAR FROM THE COPY OF THE INTIMATION U/S. 143(1) ON RECORD (PB PG. 19) . IF SO THE PERIOD UP TO 31.5.2003 SHALL THEREFORE HAVE TO BE EXCLUDED FOR THE CHARGE OF INT EREST U/S. 234D. THE REVENUES CASE IS UPHELD IN PRINCIPLE THOUGH THE ASSESSEE MAY IN THE FACTS AND CIRCUMSTANCES OF THE CASE BE ENTITLED TO SOME RELIEF FOR ONE YEAR (A.Y. 2002-03) . WE DECIDE ACCORDINGLY. 11. IN THE RESULT THE APPEALS BY THE ASSESSEE/S AR E DISMISSED. SD/- SD/- (N.VIJAYAKUMARAN) (SANJAY ARORA) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: ERNAKULAM DATED: 13 TH SEPTEMBER 2011 GJ COPY TO: 1. DR. B.A. PADMANABHA BHAT KASARAGOD INSTITUTE OF MEDICAL SCIENCES ASHWINI NAGAR NH 17 KASARAGOD-671121 2. DR. PUSHPA A.P. BHAT KASARAGOD INSTITUTE OF MED ICAL SCIENCES ASHWINI NAGAR NH 17 KASARAGOD-671121 3. THE ASSTT. COMMISSIONER OF INCOME-TAX CENTRAL C IRCLE-1 CALICUT. 4. THE COMMISSIONER OF INCOME-TAX (APPEALS)-I KOCH I. 5. THE COMMISSIONER OF INCOME-TAX CENTRAL KOCHI. 6. D.R. I.T.A.T. COCHIN BENCH COCHIN. 7. GUARD FILE .