Income Tax Appellate Tribunal - Delhi
Suchita Kumari, Panipat vs Assessee on 1 February, 2000
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH: G: NEW DELHI
BEFORE SHRI I. C. SUDHIR, JUDICIAL MEMBER
AND SHRI B.C. MEENA, ACCOUNTANT MEMBER
ITA No. 4045/Del/2011
Assessment Year 1992-93
Ganeshi Bai Through Legal Heir vs. ACIT, Panipat Circle,
Nota Ram, Panipat.
C/o. M/s. Himalya Handicrafts
Krishanpura, Panipat
ITA No. 4046/Del/2011
Assessment Year 1992-93
Nota Ram, vs. ACIT, Panipat Circle,
C/o. M/s. Himalya Handicrafts Panipat.
Krishanpura, Panipat
(PAN AAMPR1994G)
AND
ITA No. 4047/Del/2011
Assessment Year 1992-93
Suchita Kumari, vs. ACIT, Panipat Circle,
W/o Shri Manohar Lal Khanna Kothi, Panipat
Krishanpura,
Panipat
ABAPG8383R
(Appellant) (Respondent)
Appellant by : Shri R.C. Gera, Shri Puneet Gera Advocate
Respondent by : Smt. S.D. George, Sr. DR.
ORDER
PER I.C. SUDHIR, JUDICIAL MEMBER
In the above appeals the assesses have questioned first appellate order whereby the Ld. CIT(A) has upheld the action of the AO in rejecting application u/s 154 of the Act filed by the assessee to allow the interest on refund till the date of issue of the same whereas the interest on refund was allowed only upto the date of assessment orders.
2
ITA Nos. 4045,4056,4057/Del/11
2. The facts in brief are that search and seizure operation was carried out in the premises of Shri Nota Ram and family members on 16.1.1992. In that operation u/s 132 (1) of the Act an amount of Rs. 1,80,000/- in cash was seized. The assessment u/s 143(3) of the Act was framed on 23.3.1994 resulting in a demand of Rs. 96,010/-. The same was adjusted against the cash seized and balance of Rs. 83,990/- was refunded to the assessee on 29.3.2007. The assessee filed an application for grant of interest. Accordingly order u/s 132B(4)(a) of the Act was passed on 2.12.2009 as per which interest of Rs. 18,721/- was allowed to the assesses upto 22.3.1994 i.e. upto the date of assessment order. The assessee filed application u/s 154 of the Act before the AO stating therein that while passing the order u/s 132B(4)(a) of the Act the provision of section 244A of the Act was not followed, which is a mistake apparent from record and requested to rectify the same. In other words the assessee requested to allow the interest on refund upto the date of issue of refund as against the same was allowed up to the date of assessment order. The AO rejected the application against which the assessee went in first appeal before the Ld. CIT(A) but could not succeed. The Ld. CIT(A) has upheld the action of the AO with this finding that as per specific provisions of the Act, the provisions of section 244A of the Act are not applicable hence interest is to be allowed upto the date of completion of assessment only. Facts and issue involved are the same in the case of each of the assesses / appellants. 3
ITA Nos. 4045,4056,4057/Del/11
3. Before proceeding on the appeals the Ld. AR on the objection of short payment of appeal fees, submitted that section 253(6) relates to appeal fees before the Tribunal and clause (a),(b) &(c) relates to income while clause (d) of the said section 253 (6) relates to cases where the subject matter is other than those specified in the said clauses (a),(b) and (c). He submitted that in the present case subject matter of the appeal is grant of interest and in no way related to income, as is the basis of appeal fees stated in section 253 (6) of the Act. The assesee had filed an application for the grant of interest and accordingly order u/s 132 B (4) (a) of the Act was passed on 21.2.2009 as per which interest was allowed to the assessee upto the date of passing of assessment order only. The appellant thereafter filed an application u/s 154 of the Act before the AO in which it was stated that while passing the order u/s 132B(4)(a) of the Act, the provisions of section 244A was not followed which is a mistake apparent from record and requested to rectify the same. The Ld. AR cited the decision of Mumbai Bench of Tribunal in the case of Mrs. Nimu R. Thodani vs. JCIT (ITA No. 5437/M/97 dated 1.2.2000 holding that in cases filed with respect to interest u/s 234A, 234B, 234C or any other interest, appeal fee would be Rs. 500/- as per section 253 (6)(d) of the Act because interest is in no way related to the income but is linked with tax payable. Ld. DR on the other hand opposed the above submission of the Ld. AR. Respectfully following this decision of the coordinate bench on the issue we hold that in the present case which is undisputedly with respect to interest payment hence it is not related to the assessees income but is 4 ITA Nos. 4045,4056,4057/Del/11 linked with the tax payable. Hence Rs. 500/- would be the appeal fee as per section 253 (6)(d) of the Act. Since the said fee has been paid by the appellants we do not find any defect in the maintainability of the present appeals . It is ordered accordingly.
4. Now we come to the merits of the appeals. Objecting the action of the Ld. CIT(A) Ld. AR pointed out that in a similar case of search and seizure of Shri Jodha Ram & family members, who is real brother of Shri Nota Ram, one of the appellants herein, with same facts, the Ld. CIT (A), Karnal considered the application u/s 154 and has granted the interest u/s 244A till the date of the issue of refund. He referred a copy of the said appellate order in the case of Shri Jodha Ram & family members, which has been placed on record. Ld. AR submitted further that the revenue has returned the balance amount of Rs. 83,990/- after adjustment of demand for 13 years despite repeated application and personal visits for refund by the appellant to the department. The refundable amount of Rs. 83,990/- which was due to the assessee in the year 1994 was not given to him till 2007. He referred page numbers 1 to 29 of the paper book wherein copies of representations of the assessee made time to time to department with the request on refund and interest thereon have been made available. He pointed out that issue raised in the present appeals is fully covered in favour of the assessee by the following decisions :-
1. Jai Brothers Investment and Trading Company (P) Ltd. 74TTJ 748
2. M/s. Dhanvik Trading and Investment (p) Ltd. 69 TTJ 575 5 ITA Nos. 4045,4056,4057/Del/11
3. ACIT vs. Islamic Academy of Education 2010-TMI-206840-
ITAT, Bagalore
4. Multiscreen Media (P) Ltd. vs. ACIT - 2010-TMI-205655-IAT, Mumbai
5. Ld. DR on the other hand tried to justify the orders of the authorities below on the issue.
6. Considering the above submissions and having gone through the decisions relied upon, we find that under almost similar facts in the case of ACIT vs. Islamic Academy of Education (supra) it was held by the Bangalore Bench of the Tribunal that AO was not justified in withdrawing the interest allowed u/s 244A(1) of the Act because the seized cash was adjusted against the existing liability and interest u/s 244A was liable from the date on which the amount was adjusted against the existing liability to the date when the amount was refunded. Similarly the Mumbai Bench of the Tribunal in the case of Multiscreen Media (P) Ltd. vs. ACIT(supra) has given the relief to the assessee in rectification application filed u/s 154 of the Act following the decision of Hon'ble Supreme Court in the case of Sandvik Asia Ltd. (2006-TMI-5164-Supreme Court) holding that in view of the express provisions of the I.T. Act 1961, an assessee is entitled to compensation by way of interest for the delay in the payment of amounts lawfully due to the assessee which are withheld wrongly and contrary to law. The Hon'ble Supreme Court has been pleased to hold further that interest is payment on the amount to be refunded u/s 244(1) within three months from the decision 6 ITA Nos. 4045,4056,4057/Del/11 of the appellate or other authority specified in section 240, there is no exception to the principle for an allegedly "justifiable" withholding. Respectfully following these decisions we are of the view that the appellants / assessees are very much entitled to the claimed interest u/s 244A of the Act till date when the refund was issued to the assessees. Denial of the same by the AO was thus a mistake apparent from record rectifiable u/s 154 of the Act. We thus while setting aside orders of the authorities below in this regard, direct the AO to allow the claimed interest on the refund as per section 244A of the Act from the date when the tax demand amount was adjusted with the amount seized and the refund became due till the date the due refund was issued to the assesses. The ground is accordingly allowed.
7. In the result, appeals are allowed.
Order is pronounced in the open court on 8.2.2013.
sd/- sd/-
(B.C. MEENA) ( I.C. SUDHIR )
ACCOUNTANT MEMBER JUDICIAL MEMBER
Date 8.2.2013
Veena
Copy of order forwarded to:
1. Appellant
2. Respondent
3. CIT(A)
4. CIT
5. DR
By Order
Deputy Registrar, ITAT