Income Tax Appellate Tribunal - Mumbai
Acit 2(1), Mumbai vs Bharat Petroleum Corporation Ltd, ... on 12 July, 2017
IN THE INCOME TAX APPELLATE TRIBUNAL "G" BENCH, MUMBAI
BEFORE SRI MAHAVIR SINGH, JM AND SRI RAJESH KUMAR, AM
ITA No.6130/Mum/2014
(A.Y:2004 -05)
Asst. Commissioner of Income Bharat Petroleum Corporation
Tax 2(1) Ltd.
R. No. 561, 5th Floor, Aayakar Bharat Bhavna, 4&6 Currimbhoy
Vs.
Bhavan, M.K. Rd, Mumbai-400 020 Rd, Ballard Estate
Mumbai-400 001
PAN No. AAACB2902M
Appellant .. Respondent
ITA No.4268/Mum/2016
(A.Y:2004 -05)
Bharat Petroleum Corporation Asst. Commissioner of Income
Ltd. Tax 2(1)
Bharat Bhavna, 4&6 Currimbhoy R. No. 561, 5th Floor, Aayakar
Vs.
Rd, Ballard Estate Bhavan, M.K. Rd,
Mumbai-400 001 Mumbai-400 020
PAN No. AAACB2902M
Appellant .. Respondent
Revenue by .. Shri K. Ravi Ramachandran, DR
Assessee by .. Shri J.D. Mistri, AR
Date of hearing .. 14-06-2017
Date of pronouncement .. 12-07-2017
ORDER
PER MAHAVIR SINGH, JM:
These cross appeals are arising out of the order of CIT(A)-4, Mumbai, in appeal No. CIT(A)-4/IT-140/DCIT-2(1)/2013-14 dated 14-05- 2013. The rectification order passed by DCIT Circle-2(1), Mumbai for the A.Y. 2004-05 vide order dated 28-07-2014 u/s 154 of the Income Tax Act, 1961 (hereinafter 'the Act').
2. The only issue in these cross appeals is against the order of CIT(A) in directing the AO to grant interest under section 244A(1)(b) of the Act on self assessment tax paid from the date of assessment order and not ITA No . 61 3 0/ Mu m/ 20 1 4 & ITA No . 42 6 8/ Mu m/ 20 1 6 Bharat Petroleum Corporation Ltd. ( A. Y: 2 0 04 - 0 5 ) from the date of payment of self assessment tax. For this Revenue has raised following two grounds: -
"1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in interpreting the provision of Section 244A(1)(b) of IT Act.
2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in directing the AO to grant interest u/s 244A(1)(b) on excess SA tax paid without appreciating the fact that in view of Explanation to Section 244A(1)(b), the interest is payable only on the amount of tax paid in excess of tax/penalty specified in notice of demand issued u/s 156 of the IT Act."
For this assessee has raised following three grounds: -
"1. The learned Commissioner of Income Tax [CIT(A)] ought to have directed that the assessee is entitled to interest u/s 244A(1)(b) from the date of payment of Self-Assessment Tax (28.04.2004) to the date on which refund of excess Self-Assessment Tax was granted (22.02.12).
2. The learned Commissioner of Income Tax [CIT(A)] erred in holding that the assessee was entitled to interest on refund of excess Self-
Assessment tax from the date of the assessment order and not from the date of payment of Self-Assessment Tax.Page 2 of 11
ITA No . 61 3 0/ Mu m/ 20 1 4 & ITA No . 42 6 8/ Mu m/ 20 1 6 Bharat Petroleum Corporation Ltd. ( A. Y: 2 0 04 - 0 5 )
3. The learned Commissioner of Income Tax [CIT(A)] ought to have directed that assessee was entitled to interest u/s 244A(1)(b) on the following amounts for the following period:
Amount (Rs.) From To
3188,53,376 28.04.2004 21.12.2006
3. Briefly stated facts are that the assessee is a public sector undertaking of Ministry of Petroleum and Natural Gas, Govt. of India. It is engaged in the business of refining of crude oil and marketing of petroleum products all over India. Originally assessment was framed by the AO under section 143(3) of the Act vide order dated 27-12-2006 by making certain disallowance/ rejection of claim of the assessee. Aggrieved, assessee preferred the appeal before CIT(A), who vide his order dated 01-06-2011 allowed the deductions in respect to some issues. Consequent to the appellant order of CIT(A), AO passed the order giving effect to the order of CIT(A) dated 07-02-2012. The AO allowed double deduction under chapter VIA and hence committed mistake. Thereafter, the AO issued notice under section 154 of the Act dated 19-12-2013 and consequent to this, the AO passed an order under section 154 of the Act dated 14-05-2013 rectifying the above mistake. The assessee also filed separate rectification under section 154 of the Act before the AO on 12-06-2013 as the AO has not granted any interest under section 244 A (1)(b) on self assessment tax paid, which became refundable consequent to the order of CIT(A). The assessee claimed that assessee corporation paid self-assessment tax under section 140A of the Act amounting to Rs.68 crores for the relevant AY 2004-05 on 28-04- 2004. Pursuant to the order of CIT(A), certain portion of self assessment tax paid under section 140A of the Act became excess and refundable to the assessee. Aggrieved, against the non allowance of interest on refund, the assessee preferred the appeal before CIT(A). The CIT(A) following the decision of Hon'ble Bombay High Court in the case of Sitaram vs. CIT Page 3 of 11 ITA No . 61 3 0/ Mu m/ 20 1 4 & ITA No . 42 6 8/ Mu m/ 20 1 6 Bharat Petroleum Corporation Ltd. ( A. Y: 2 0 04 - 0 5 ) (2012) 341 ITR 549 (Bom) allowed the claim of the assessee on excess payment of self assessment tax from the date of assessment order and not from the date of payment of self assessment tax by observing in Para 5.1, 5.2.1 and 5.2.2 as under: -
"5.1 I have carefully and dispassionately considered the facts and circumstances of the case, written submissions and arguments made by the Ld. AR before the undersigned. The appellant has raised solitary ground of appeal involving granting of interest u/s.244A(1)(b) on delayed refund of self- assessment tax paid u1s.140A of the Act, which is decided as under: -
5.2.1 Having considered the rival submissions, it is noted that the Section 244A(1)(b) of the Act, on which the appellant has placed reliance, is a specific provision which deals with interest on refunds "in any other case". It states that where refund of any amount becomes due to assessee under the Act, he is entitled to receive the said amount along with simple interest thereon. Thus, the provisions of Section 244A(1)(b) are relevant for this appeal. Here, the self-assessment tax u/s.140A of the Act of Rs.68 crores has been admittedly paid by the appellant on 28th April, 2004. It is, therefore, obvious that the appellant could have claimed interest on self-assessment tax and the A.O. is duty- bound to grant interest u/s.244A(1)(b) of the Act on refund of excess payment of self-assessment tax from the date of assessment order and not from the date of payment of self-assessment tax. Strong reliance is placed on the following decisions: -
• Sitararn vs. CIT (2012) 341 ITR 549 (Bom) Page 4 of 11 ITA No . 61 3 0/ Mu m/ 20 1 4 & ITA No . 42 6 8/ Mu m/ 20 1 6 Bharat Petroleum Corporation Ltd. ( A. Y: 2 0 04 - 0 5 ) • (2013) 352 ITR 273 (Delhi) • India Trade Promotion Organization vs. CIT (2013) 263 CTR (Del) 18 • Addl. CIT vs. Grindwell Norton Ltd. (2006) 100 lTD 245 (Mumbai) • Addl. CIT vs. Novartis India Ltd. (ITA No. 5848/Mum/2000) 5.2.2 Having regard to the facts and circumstances of the case and in view of the above, the A.O. is directed to grant correct interest u/s.244A(1)(b) of the Act, as per law, to the appellant after verification of facts at the time of giving appeal effect.
Accordingly, Ground of appeal No.1 is allowed. NO other ground of appeal has been raised."
Aggrieved, against the direction of CIT(A) allowing refund on excess payment of self assessment tax from the date of assessment order, Revenue is in appeal before us. The assessee is in cross appeal against the direction of CIT(A) not allowing the refund on excess payment of self assessment tax from the date of payment of self assessment tax.
4. At the outset, the learned Counsel for the assessee argued that this issue is settled by Hon'ble Bombay High Court in the case of Stock holding corporation vs. NC Tewari [2015] 373 ITR 282 (Bombay) wherein, after considering the provisions of section 244A (1b) of the Act, the Hon'ble High Court considered this issue and allowed the claim of the assessee vide para 12 to 14 as under: -
"12. Similarly, the next contention urged on behalf of the revenue that the payment of interest should only be made from the date of notice under Section 156 of the Act is issued to the petitioner in terms of Explanation to Section 244A(1)(b) of the Act cannot Page 5 of 11 ITA No . 61 3 0/ Mu m/ 20 1 4 & ITA No . 42 6 8/ Mu m/ 20 1 6 Bharat Petroleum Corporation Ltd. ( A. Y: 2 0 04 - 0 5 ) be accepted for two reasons. Firstly, as held by the Supreme Court in Tata Chemicals Ltd.(supra), the Explanation would have effect only where payments of tax have been made pursuant to notice under Section 156 of the Act. In this case, the payment has not been made pursuant to any notice of demand but prior to the filing of the return of income in accordance with Section 140A of the Act. Secondly, the provisions of Section 244A(1) (b) very clearly mandate that the revenue would pay interest on the amount refunded for the period commencing from the date the payment of tax is made to the revenue upto the date when refund is granted to the revenue. Thus, the submission of Mr. Pinto that the interest is payable not from the date of payment but from the date of demand notice under Section 156 of the Act cannot be accepted as otherwise the legislation would have so provided in Section 244A 1(b) of the Act, rather then having provided from the date of payment of the tax.
13. We find support for our view from the decisions rendered by Karnataka High Court in CIT v. Vijaya Bank [2011] 338 ITR 489/201 Taxman 371/12 taxmann.com 485 and Delhi High Court in CIT v. Sutlej Industries Ltd. [2010] 325 ITR 331/190 Taxman 136 (Delhi). In both cases in identical circumstances it was held that interest is payable from the date of payment of the tax on self- assessment to the date of refund of the amounts under Section 244A of the Act.
14. Accordingly, for all the aforesaid reasons, we set aside the impugned order dated 28 September 1999. We direct the Assessing Officer to compute the interest payable from the date of payment on Page 6 of 11 ITA No . 61 3 0/ Mu m/ 20 1 4 & ITA No . 42 6 8/ Mu m/ 20 1 6 Bharat Petroleum Corporation Ltd. ( A. Y: 2 0 04 - 0 5 ) self-assessment tax i.e. 31 August 1994 till the date of refund i.e. 24 October 1998. The revenue is directed to compute the interest due to the petitioner and pay the same within six weeks from today."
5. On this the learned Sr. DR relied on the decision of Hon'ble Delhi High court in the case of CIT vs. Engineers India Ltd. (2015) 373 ITR 377 (Del) wherein the decision of Hon'ble Bombay High Court was considered. The learned Counsel for the assessee also relied on the decision of Hon'ble Calcutta High Court in the case of CIT vs. Birla Corporation Ltd. in ITA No. 526 of 2004, wherein the issue of refund on self-assessment tax was granted from the date of making payment till the date of grant of refund from the date of payment till the date of grant of refund by observing in final finding as under: -
"U/s. 154 of the Act only a "mistake apparent from the record" is rectifiable. Thus the precondition to invoke section 154 is the presence of a mistake and that the same must be apparent from the record. The power to rectify a mistake u/s.154, however, does not extend to revision or review of the order. The word apparent means something, which is clearly visible or understood or obvious. Therefore a mistake which can be rectified u/s.154 is one which is patent, which is obvious and whose discovery is not dependent on argument or elaboration. The rectification of an order does not imply that the original order is replaced by a completely new order. In the instant case the assessing officer has attempted to substitute the original order which is not permissible u/s.154.
An error, which is by no means self-evident, cannot be called an apparent error. Nevertheless a mistake capable of being rectified u/s. 154 is not limited to Page 7 of 11 ITA No . 61 3 0/ Mu m/ 20 1 4 & ITA No . 42 6 8/ Mu m/ 20 1 6 Bharat Petroleum Corporation Ltd. ( A. Y: 2 0 04 - 0 5 ) clerical or arithmetical mistakes only. However it does not include any mistake which may be discovered by a complicated process of investigation, argument or proof. Reference in this regard may be made to T.S. Balaram, ITO v Volkart Bros (1971) 82 ITR 40 (SC). A decision on a debatable point of law or a disputed question of fact is not a mistake apparent from the record. The ordinary meaning of the word "apparent" is that it should be something, which appears to be so ex facie that it does not admit scope for any argument or debate. It, therefore, follows that a decision on a debatable point of law or fact or failure to apply the law to a set of facts which remains to be investigated cannot be corrected by way of rectification. Reference in this regard may be made to CIT v MMTC Ltd (supra). Section 244A does not mandate that interest cannot be allowed on self assessment tax paid u/s 140A. As discussed earlier it cannot be said that interest u/s.244A can be allowed only in cases where excess payments of tax is made consequent to a notice of demand u/s.156. The language of the Act is clear and there is no ambiguity in it. Hence the assessee is clearly entitled to claim interest u/s.244A on refund of excess self assessment tax.
In K.K.J. Foundations -Vs.- The Assistant Director of Income Tax (ITA. No. 242 of 2014) the Kerala High Court by Judgment dated 8th September 2015 held as follows:-
"By invoking the power of rectification, the ultimate conclusion of a decision cannot be changed. So also, the employment of the words phraseologies in Sec.154 shows that Page 8 of 11 ITA No . 61 3 0/ Mu m/ 20 1 4 & ITA No . 42 6 8/ Mu m/ 20 1 6 Bharat Petroleum Corporation Ltd. ( A. Y: 2 0 04 - 0 5 ) by rectification it intended only to correct any mistake and amend the same accordingly. It is a settled proposition of law that rectification is a process by which a mistake is set at right. It thus means correcting an error which was apparent from record and not deciding the matter over and again on merits and that the rectified order does not supersede the original order but continues with the incorporated changes. Moreover, we have come across two judgments of the 'Hon'ble Apex Court in 'S. Nagaraj v. State of Karnataka' [(1993) Supp. 4 SCC 595] and 'Ammonia Supplies Corporation Pvt. Ltd. v. Modern Plastic Containers Pvt. Ltd.' [AIR 1998 SC 3153], by which it was held in the former judgment that rectification of an order stems from fundamental principle that justice is above all. It is exercised to remove the error and not for disturbing finality. In the latter judgment, it was held that rectification connotes something what ought to have been done but by error is not done and what ought not to have been done was done requiring rectification. Rectification, in other words, is the failure to comply with the directions under the Act. Therefore, it is apposite and clear that the power under Sec. 154 can be invoked only to correct an error and not to disturb a concluded finding."
Thus in the instant case there was no mistake apparent from the record which could be rectified u/s. 154 of the Act. In that view of the matter, the question Nos.1, 3 and 4 are answered in the Page 9 of 11 ITA No . 61 3 0/ Mu m/ 20 1 4 & ITA No . 42 6 8/ Mu m/ 20 1 6 Bharat Petroleum Corporation Ltd. ( A. Y: 2 0 04 - 0 5 ) affirmative. The question No.2 is answered in the negative.
We therefore direct the assessing officer to compute the interest payable from the date of payment of tax on the basis of self-assessment till the date of grant of refund. The revenue is directed to compute the interest due to the assessee and pay the same within a reasonable time."
6. After hearing both the sides and going through the facts of the case it is clear that as per the decision of the Hon'ble Bombay High Court in the case of The Stock Holding Corporation Of India Ltd. (Supra) and Calcutta High Court in the case of Birla Corporation Limited (supra), we are of the view that refund u/s 244A(1)(b) of the Act on self assessment tax is to be paid from the date of payment of self assessment tax till the date of grant of refund. Respectfully following the Hon'ble Bombay High Court in the case of The Stock Holding Corporation Of India Ltd. (Supra), we direct the AO to allow the interest in term of the decision of Hon'ble Bombay High Court. The appeal of assessee is allowed and that of the Revenue is dismissed.
7. In the result, the appeal of assessee is allowed and that of the Revenue is dismissed.
Order pronounced in the open court on 12-07-2017.
Sd/- Sd/-
(RAJESH KUMAR) (MAHAVIR SINGH)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Mumbai, Dated: 12-07-2017
Sudip Sarkar /Sr.PS
Page 10 of 11
ITA No . 61 3 0/ Mu m/ 20 1 4 &
ITA No . 42 6 8/ Mu m/ 20 1 6
Bharat Petroleum Corporation Ltd. ( A. Y: 2 0 04 - 0 5 ) Copy of the Order forwarded to:
1. The Appellant
2. The Respondent.
3. The CIT (A), Mumbai.
4. CIT
5. DR, ITAT, Mumbai
6. Guard file. //True Copy// BY ORDER, Assistant Registrar ITAT, MUMBAI Page 11 of 11