Income Tax Appellate Tribunal - Mumbai
Reliance Jio Infocomm Ltd, Mumbai vs Acit Centralised Processing Cell-Tds, ... on 29 September, 2019
IN THE INCOME TAX APPELLATE TRIBUNAL,
MUMBAI BENCH "D", MUMBAI
BEFORE SHRI RAJESH KUMAR, ACCOUNTANT MEMBER AND
SHRI RAM LAL NEGI, JUDICIAL MEMBER
ITA No.1251/M/2018
Assessment Year: 2014-15
M/s. Reliance JIO ACIT (CPC)-TDS CPC,
Infocomm Ltd., Aayakar Bhavan,
9th Floor, Maker Sector-3,
Chambers, IV, Vaishali, Ghaziabad,
Vs.
Nariman Point, U.P. 201010,
Mumbai - 400 021 Ayurvedic Hospital
PAN: AABCI6363G Building,
Charni Road (West),
Mumbai - 400020
(Appellant) (Respondent)
Present for:
Assessee by : Shri Jitendra Jain, A.R.
Revenue by : Shri D.G. Pansari, D.R. &
Shri Amit Pratap Singh, D.R.
Date of Hearing : 27.09.2019
Date of Pronouncement : 29.10.2019
ORDER
Per Rajesh Kumar, Accountant Member:
The present appeal has been preferred by the assessee against the order dated 22.01.2018 of the Commissioner of Income Tax (Appeals) [hereinafter referred to as the CIT(A)] relevant to assessment year 2014-15.
2. The assessee has raised following grounds of appeal:
"The Grounds of Appeal set below are without prejudice to each other.
Ground No. 1: On the facts and circumstances of the case and in law, the Learned Commissioner of Income-tax (Appeals) ['CIT(A)'] has erred in holding that month referred under Section 201(1 A) of the Act refers to "British Calendar Month" and not a period of 30 days, thereby confirming the order of the Assessing Officer.2 ITA No.1251/M/2018
M/s. Reliance JIO Infocomm Ltd.
Ground No. 2: On the facts and circumstances of the case and in law, the Learned Commissioner of Income-tax (Appeals) ['CIT(A)*] failed to appreciate the meaning of the words / phrase / connotation "comprised in a period" appearing in Rule 119A(b) and has erred in holding that there is no mention of calculation of a period in Rule 119A.
Ground No. 3: On the facts and circumstances of the case and in law, the learned CIT(A) has erred in confirming the order of the Assessing Officer for levy of interest under Section 220(2) as a consequence to Ground no.1 and 2.
The Appellant craves leave to add to, amend or alter, by deletion, substitution, modification, or otherwise, the above Grounds of Appeal, either before or during the hearing of the Appeal or till the final disposal of the Appeal."
3. The only controversy involved in the present appeal is against the meaning to be assigned to the word "month" for the purpose of calculation of interest under section 201(1A) of the Act.
4. The facts in brief are that the AO passed order under section 154 read with section 200A of the Income Tax Act (hereinafter called as Act) on 23.10.2015 raising a demand of Rs.1,370/- on the assessee on account of interest on late deduction/collection .The AO has calculated the interest under section 201(1A) for 12 months by taking period commencing from 01.07.2013 ending on 30.06.2014 thereby rounding off the starting and the ending month. According to the assessee, the tax was due to be deducted on 22.07.2013 but has been deducted on 19.06.2014 and thus calculated the interest under section 201(1A) for 11 months starting from 22.07.2013 ending on 19.06.2014 by round off the last month i.e. June 2014 as one month. The provisions of section 201(1A) of the Act provides for charging of interest at the rate of 1% for every month or part of the month commencing from the date of which tax was deductible to the date on which the tax was actually deposited.
3 ITA No.1251/M/2018M/s. Reliance JIO Infocomm Ltd.
Besides rule 119A(b) of the IT Rules prescribes that where interest is to be calculated for every month or part of the month comprising a period in a fraction of month shall be deemed to be full month.
5. The Ld. CIT(A) dismissed the appeal of the assessee by holding that the month referred to under section 201(1A) of the Act refers to calendar month and not a period of 30 days as recknoned by the assessee and accordingly dismissed the appeal of the assessee by holding that the month should be incorporated as British calendar month for the purpose of calculation of interest under section 201(1A) of the Act.
6. After hearing both the parties and perusing the material on record, we observe that the controversy before us is whether the calculation of interest under section 201(1A) of the Act has to be calculated on the basis of calendar British month or a month comprising 30 days starting from the date on which tax was deductable to the same date in the next month. In our opinion, the month as referred to section 201(1A) of the Act has to be a period of 30 days starting from the date on which the tax was deductable to the same date in the next month and if the last month is a fraction then the terminal month should be rounded off or treated as full month. This construction would be in accordance with the principle that interest is a compensation for the value of money for which the money to be deposited in the central exchequers remained with the assessee. Prior to 22.07.2013 there was no obligation to deduct tax and hence interpretation given by the Revenue fails because the Revenue will be entitled to even for the period when there is no default.
4 ITA No.1251/M/2018M/s. Reliance JIO Infocomm Ltd.
This issue has been settled by a catena of decisions. In the case of Oil and Natural Gas Commission vs. ACIT in ITA No.1955 to 1965/Ahd/2015, the co-ordinate bench of the Tribunal has held that a month as per British calendar and a month reckoned as per British calendar are not the same thing and can not be used inter changeably while former referred to calendar month by itself, the later referred to a period of time which qualified to be treated as a month. The distinction between the scope of these two expressions can not be ignored. In this case, the interest was to be charged from the period of 16.11.2010 to 14.12.2012 which is apparently less than 25 months because till 14.12.2012, the period of 25 months has not lapsed from 16th November,2010 and the period elapsed is 24 months 28 days. Going by the provision of general clauses Act the period of time between 16.11.2010 to 14.12.2012 is less than 25 months and accordingly interest under section 201(1A) of the Act could not have been levied for more than 25 months. Similarly, in the case of DCIT, TDS Circle, Ahmedabad vs. M/s. Suzlon Gujarat Wind Park Ltd. in ITA No.2931 to 2933/Ahd/2015 A.Y. 2013-14 the co-ordinate bench of the Tribunal has held as under:
"3. The only controversy before us is as to whether, for the purpose of levy of interest u/s 201(1A), the term 'month' could be given ordinary sense, i.e., "a period of 30 days" or whether it could be treated as "British Calendar Month" as per General Clauses Act. The Assessing Officer worked out amount of interest u/s 201(1A) based on British Calendar month, whereas CIT(A) directed the Assessing Officer to work out interest by adopting period of 30 days as one month. I find that this issue is squarely covered in favour of the assessee by the decision of Hon'ble Gujarat High Court in the case of CIT vs. Arvind Mills Ltd, reported in 16 taxmann.com 291 (Guj), wherein Hon'ble Court has held that for the purposes of Section 244A, term 'month' must be given ordinary sense of term, i.e., 30 days of period and not British calendar month as defined under section 3(35) of General Clauses Act. Similar view has been taken by the ITAT in the case of Oil & Natural Gas Commission vs. ACIT (TDS), Surat, reported in [2015] 62 taxmann.com 133 (Ahmedabad-Trib), wherein it was held that "levy of interest u/s 201(1A) is compensatory in nature and thus gap of time between point of time when tax ought to have been deducted at sources vis-à-vis point of time when tax was 5 ITA No.1251/M/2018 M/s. Reliance JIO Infocomm Ltd.
actually deducted are to be seen and it is in this context that connotation of expression 'month' is to be examined." In view of aforesaid decisions, we do not find any infirmity in the order of the CIT(A) which is hereby upheld."
7. In the case of Navayuga Quazigund Expresswawy (P) Ltd. DCIT in ITA No.1651/Hyd/2014 177 TTJ (Hyd) 390 the co- ordinate bench of the Tribunal has held that month for the purpose of computing of interest under section 201(1A) has to be given ordinary meaning of the term 30 days and not of British calendar month. Similarly, the co-ordinate bench of the Tribunal in the case of Radha Soami Satsang Beas vs. DCIT in ITA No.179/Chd/2016 vide order dated 11.08.2016 has held that for the purpose of calculation of interest under section 201(1A) the month should be incorporated in the ordinary sense of the term i.e. 30 days of the period and not of the British calendar month. In view of the discussion hereinabove in the light of ratio laid down by the various forums, we are of the view that the 30 days in a month has to be computed by taking the ordinary meaning of the term "month" and should be taken as 30 days and not as British calendar month.
8. The appeal of the assessee is allowed.
Order pronounced in the open court on 29.10.2019.
Sd/- Sd/-
(Ram Lal Negi) (Rajesh Kumar)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Mumbai, Dated: 29.10.2019.
* Kishore, Sr. P.S.
Copy to: The Appellant
The Respondent
The CIT, Concerned, Mumbai
6 ITA No.1251/M/2018
M/s. Reliance JIO Infocomm Ltd.
The CIT (A) Concerned, Mumbai
The DR Concerned Bench
//True Copy// [
By Order
Dy/Asstt. Registrar, ITAT, Mumbai.