Uttarakhand High Court
Commissioner Of Income-Tax vs Dehradun Club Ltd. on 2 November, 2007
Equivalent citations: [2008]298ITR88(UTTARANCHAL)
Bench: P.C. Verma, M.M. Ghildiyal
JUDGMENT
1. This appeal under Section 260A of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), is directed against the common order dated June 6, 2005, passed by the Income-tax Appellate Tribunal, Delhi Bench "E" New Delhi (for short, the ITAT) in I.T.A. Nos. 376 and 377/Del/2003 pertaining to the assessment years 1997-98 and 1998-99 respectively, whereby the Income-tax Appellate Tribunal has dismissed the appeal of the Department and confirmed the order of the Commissioner of Income-tax (Appeals), who set aside the recovery of interest under Section 154 calculated according to the provisions of Section 234B of the Act while revising the original assessment order passed under Section 143(3) dated November 24, 2000. The Commissioner of Income-tax (Appeals) set aside the demand of interest on the ground that it does not contain any reason for imposition of interest under Section 234B of the Act.
2. We have considered the rival contentions put forth by Sri Arvind Vashistha, learned standing counsel for the Department and Sri S.K. Posti, learned amicus curiae appointed by this Court and perused the record.
3. The question that arises for consideration in this appeal is as under:
Whether the learned Income-tax Appellate Tribunal was legally justified in law and on facts in dismissing the appeal of the Revenue and upholding the order of the Commissioner of Income-tax (Appeals) by deleting the interest under Section 234B in spite of the fact that the assessee had failed to make payments of advance tax in accordance with the provisions of Section 209 read with Section 234B of the Income-tax Act, 1961?
4. From the perusal of the assessment order, it is clear that assessment under Section 143(3) was completed on November 24, 2000 and demand of Rs. 3,39,279 was made. The Assessing Officer vide his order dated January 9, 2001, granted instalment of Rs. 65,000 per month to pay this demand and also to pay the demand of the assessment year 1998-99. The assessee-company paid nine instalments of Rs. 65,000 each and also paid Rs. 50,000 on May 18, 2001, against the demand of the assessment year 1997-98. The total payment so made came to be Rs. 7,16,845 against the demand of the assessment year 1997-98, which was in excess of the demand of the assessment year 1997-98. The excess amount over the demand was refunded. The assessee-company did not pay any amount against the demand of the assessment year 1998-99. Accordingly, under Section 154 of the Act the calculation of refund was made as under:
__________________________________________________________________________ Rs. Rs.
__________________________________________________________________________ Income assessed 4,80,210 Tax thereon 1, 92,084 Add: Interest 234B 1,46,545 244A withdrawn 650 220(2) 9,758 1,56,913 Total tax and interest ____________ 3,48,997 Less: Taxes paid 7,16,845 __________ Refundable 3,67,808 Add: Interest under Section 244A 9,236 __________ Total refundable 3,77,044 __________________________________________________________________________ 4.1 The assessment order dated November 24, 2000, was revised and the Department was directed to refund the amount worth Rs. 3,77,044. The interest has been calculated for non-payment of demand for the assessment year 1998-99. It was never disputed by the assessee that advance tax payable by him. Since the advance tax was payable by him and he did not make the payment for the assessment year 1998-99, which clearly shows that the advance payment was not made. Accordingly, the Assessing Officer calculated the interest under Sections 234B, 244A and 220(2) of the Act.
5. Learned amicus curiae appearing for the assessee submitted that since the amount of Rs. 7,16,845 were deposited, which is higher than that of the tax assessed, therefore, it cannot be said that there was default in payment of advance tax. The argument of the learned amicus curiae is misplaced for the reason that for the assessment year 1997-98, the assessment under Section 143(3) of the Act was completed on November 24, 2000, and on the application of the applicant/assessee, vide office order dated January 9, 2001, the instalments were fixed and the said amount was deposited on the second demand. It is also not in dispute that against the demand of the assessment year 1998-99, the assessee-company did not pay any amount. Thus, imposition of interest is based on reasons and the Commissioner of Income-tax (Appeals) as well as the Income-tax Appellate Tribunal both fell into error in not properly examining the order of the Assessing Officer.
6. For the reasons recorded above, we set aside the order of the Income-tax Appellate Tribunal as well as the Commissioner of Income-tax (Appeals). The order of the Assessing Officer is affirmed. Question is answered in favour of the Revenue and against the assessee. There shall be no order as to costs.