Income Tax Appellate Tribunal - Mumbai
Bank Of Bahrain & Kuwain B.S.C, Mumbai vs Assessee on 1 May, 2012
IN THE INCOME TAX APPELLATE TRIBUNAL,
MUMBAI BENCH 'L' BENCH
BEFORE SHRI B.R.MITTAL(JUDICIAL MEMBER) AND
SHRI J.SUDHAKAR REDDY (ACCOUNTANT MEMBER)
C.O.Nos.209 & 210/M/2010
(arising out of ITA Nos.7160 & 5666/Mum/2004)
Assessment Years: 2001-02 & 2000-2001
Bank of Bahrain & Kuwait, , B.S.C., DDIT (IT) Range 3(2),
Jolly Maker Chambers II, 225, Mumbai.
Nariman Point, Mumbai-21.
Vs.
PAN No.AAACB 2140 F
(Appellant) (Respondent)
Appellant by : Shri F.V.Irani
Respondent by: Shri Narendra Kumar
Date of hearing: 1.5.2012
Date of pronouncement: 9 .5.2012
ORDER
Per B.R.Mittal, JM:
The assessee has filed these cross objections for the assessment years 2001-02 and 2000-2001 in I.T.A.No.7160/M04 and I.T.A.No.5666/M/04 taking the common grounds as under:
"The appellant submits that the guarantee commission to the extent to which such commission is taxed in the earlier years should not be taxed once again in the year under consideration."
2. These cross objections filed by the assessee are barred by limitation of 2068 days and 2072 days respectively for assessment years 2001-02 and 2000-2001.
3. It is observed that the appeals filed by Revenue for both assessment years were heard on 23.12.2010 and disposed of by a common order dated 28.1.2011. Since both these cross objections of assessee are barred by limitation by a period of 2068 days and 2072 days, respectively for both assessment years under consideration, assessee submitted that the delay was due to a reasonable cause and referred affidavit of the assessee bank both dated 20.12.2010 to explain the delay. It is stated that the issue 2 C.O.Nos.209 & 210/M/2010 (arising out of ITA Nos.7160 & 5666/Mum/2004) vis-à-vis the taxability of guarantee commission earned by the assessee bank was decided in its favour by ld CIT(A) and, therefore, no cross objections were filed on receipt of Form No.36 filed by the Income tax Department. Further, it is stated that assessee bank received the consolidated order dated 13.8.2010 passed by the Special Bench of ITAT in assessee's own case for assessment years 1998-99 and 1999-2000 and, therefore, assessee considered that a cause of action has arisen as the Special Bench of ITAT restored the matter to Assessing Officer with a direction to examine the terms of the guarantee and to spread the guarantee commission over the period of guarantee in case there was a provision of refund of guarantee commission in the event of guarantee being revoked.
4. At the time of hearing, ld A.R. submitted that in view of above facts, the delay be condoned and placed reliance on the decision of Hon'ble apex Court in the case of Collector, Land Acquisition vs Mst Katiji and others, AIR 1987 (SC)471 and the case of N.Balakrishnan vs M. Krishnamurthy (1998) 9 SCS 123. He submitted that Hon'ble Apex Court has held in the case of Collector, Land Acquisition (supra) that a liberal approach has to be adopted to consider the expression sufficient cause for condoning the delay. He further submitted that Hon'ble apex Court in the case of N.Balakrishnan vs M. Krishnamurthy (supra) has held that while accepting the explanation for the delay, explanation of assessee is the sole criterion and length of delay is not relevant. He submitted that there is no malafide and deliberate delay in filing these cross objections before the Tribunal.
5. A query was raised by the Bench that the assessee filed cross objections before the Tribunal heard appeals of department on 23.12.2010 and why the assessee did not bring it to the notice of the Bench to enable the Bench to consider and dispose of cross objections of the assessee alongwith appeals filed by department. Ld A.R. submitted that cross objections were listed before the Bench alongwith appeals filed by department but Bench segregated the cross objections and heard only appeals of department and dispose them of.
6. We have called for the said appeal files and on perusal of order sheet; we do not find any such direction of the bench. On the other hand, we observe that assessee, for the reason best known to it, did not bring to the notice of the Bench of filing the cross 3 C.O.Nos.209 & 210/M/2010 (arising out of ITA Nos.7160 & 5666/Mum/2004) objections. Further, ld D.R. also stated that the cross objections have been filed on the assumption that AO may tax the guarantee commission in subsequent years, which was already taxed in earlier years in view of the decision of ITAT Special Bench giving direction to AO to examine whether the commission was refundable on the revocation of guarantee and if it is found out to be so, then the commission should be spread over the period for which the guarantee is given; otherwise it is to be taxed in the year the guarantee was given irrespective of the period for which it was spread over. He submitted that the cross objections filed by assessee do not arise out of impugned orders of ld CTI(A).
7. On consider of above submissions of ld A.R. and also considering the submissions of ld D.R. that cross objections have been filed by the assessee only on the basis of assumption and not arising out of the impugned orders of ld CIT(A) for the assessment years under consideration, we are of the considered view that cross objections filed by assessee are not only barred by limitation but also observe on perusal of order of the Tribunal dated 28.1.2011 passed in the appeals filed by department, that the Tribunal considered the submissions of assessee which was raised by the assessee at the time of hearing of appeals of department that it should be clarified that if the amount of deferred guarantee commission is held to be taxable in the year in which guarantee was given, then the amount already offered for taxation on the basis of spreading over the period of guarantee should not be taxed again. We consider it prudent to reproduce paras 4 & 4.1 of the said order of the Tribunal, which are as under:
"4. The third ground is against the deletion of addition on account of deferred guarantee commission. The ld. counsel for the assessee submitted that this issue also came up before the Special Bench in the aforenoted case and the same has been restored to the file of AO with a direction to examine whether the commission was refundable on the revocation of guarantee. If it is found out to be so, then the commission should be spread over the period for which the guarantee is given; otherwise it is to be taxed in the year the guarantee was given irrespective of the period for which it was spread over. The ld. counsel for the assessee contended that he has no objection to the restoration of the issue in accordance with the view taken by the Special Bench but it should be clarified that if the amount of deferred guarantee commission is held to be taxable in the year in which guarantee was given, then the amount already offered for taxation on the basis of spreading over the period of guarantee, should not be taxed again. The ld. D.R. candidly accepted that this issue was decided by the Special Bench of the Tribunal restoring the matter to the file of AO in the terms submitted by the ld. A.R. He, however, did not raise any objection to the prayer made by the ld. A.R. for not doubly taxing the same income, firstly in the year in 4 C.O.Nos.209 & 210/M/2010 (arising out of ITA Nos.7160 & 5666/Mum/2004) which the guarantee was given and secondly when the amount was voluntarily offered by the assessee over the period of guarantee.
4.1 Having heard both the sides on the issue and perusing the relevant material on record, we find that the Special Bench of the Tribunal has restored the matter to the file of AO with the directions contained in para- 25 of its order. Respectfully following the same, we remit the matter to the file of AO in the year under consideration also for taking a final decision as per the direction given by the Special Bench in the aforenoted decision. However, it is made clear that if a particular sum is taxed by the AO in the year in which guarantee was actually given as per the direction of the Special Bench, then the same amount voluntarily offered by the assessee in subsequent years, depending upon the period for which guarantee was given, should be excluded from the total income of the assessee for such years. If this is not done, it would amount to double taxation of the same income firstly in the year in which guarantee was given and secondly in the years over which it is spread over. With these observations, we remit the matter to the file of AO for a fresh decision.
8. In view of above facts, we hold that the cross objections filed by assessee are liable to be dismissed not only on account of barred by limitation as there is no reasonable and sufficient reasons to condone delay of 2068 days and 2072 days, but also on the ground that these cross objections are not arising out of order by ld CIT(A). Hence, cross objections filed by assessee for both assessment years i.e. 2001-02 and 2000-2001 are dismissed.
9. In the result, cross objections filed by assessee for both assessment years are dismissed.
Pronounced in the open court on 9th May, 2012
Sd/- Sd/-
(J.SUDHAKAR REDDY) (B.R. MITTAL)
Accountant Member Judicial Member
Mumbai, Dated 9th May, 2012
Parida
Copy to:
1. The appellant
2. The respondent
3. Commissioner of Income Tax (Appeals),XXXII, Mumbai
4. DIT (IT) , Mumbai
5. Departmental Representative, Bench 'L' Mumbai //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI