Income Tax Appellate Tribunal - Kolkata
Assistant Commissioner Of Income-Tax vs Kesoram Industries Ltd. on 21 August, 1992
Equivalent citations: [1993]44ITD158(KOL)
ORDER
Abdul Razack, Judicial Member
1. The revenue has filed ITA Nos. 1751 to 1753 (Cal.)/89 and the assessee has filed cross objection Nos. 113-115 (Cal.)/89. As they involve determination of a common controversy the appeals and the cross objections were heard together and are being disposed of through this common order for the sake of convenience.
2. The sole controversy in these revenue's appeals are that the Appellate Commissioner was not justified in holding that the Assessing Officer cannot withdraw the interest allowed by him under Section 244(1A) of the Act which was granted to the assessee-company while passing orders giving effect to the appellate orders.
3. The grievance of the assessee-company in the cross objections is that the Appellate Commissioner did not possess power to reduce or withdraw the interest granted under Section 244(1A) of the Act while giving effect to the direction of the appellate authority. Another grievance which has been made out by the assessee in the cross objection is that the Appellate Commissioner erred in mentioning that it was the assessee's contention that, if necessary, the Assessing Officer could modify/refuse the amount of interest already paid under Section 244(1A) by rectifying his order under which such interest was granted.
4. In order to appreciate and decide the controversies/grievances involved in the revenue's appeals as well as in the cross objections filed by the assessee few facts required to be narrated. They are as under :
5. While passing orders giving effect to the direction of the appellate authority the assessee company took benefit of the Amnesty Scheme and filed returns on 31-3-1987 offering for taxation the gratuity liability on the basis of actuarial valuation, though the same was allowed by the Appellate Commissioner. In order to regularise these returns for the assessment years 1980-81 to 1982-83 (which are the years under appeal) the Assessing Officer issued notice under Section 148 of the Income-tax Act. After issue of notices under Section 143(2) fresh assessments were made for each of the assessment years under appeal. In the assessment orders passed under Section 143/251/147, the Assessing Officer withdrew the interest which was already allowed earlier to the assessee-company under Section 244(1A) of the Act under separate orders for each of the assessment years. The assessee-company not being satisfied with this action of the Assessing Officer filed appeals before the Appellate Commissioner. The Appellate Commissioner for reasons discussed by him in detail in the impugned order did not agree with the action of the Assessing Officer in withdrawing the interest earlier granted to the assessee company under Section 244(1A) of the Act. It was contended before the Appellate Commissioner by the assessee-company that the Assessing Officer had no power or authority under Section 244(1A) to withdraw the interest which has already been granted to the assessee company under Section 244(1A). This was explained to the Appellate Commissioner by drawing his attention to the other provisions contained in the Income-tax Act like Section 139(8), Section 215(3), Section 217(2), proviso to Section 220(2) and new Sections 234A(4) and 244A(3). Though the Appellate Commissioner was not impressed by this line of argument yet he held that the Assessing Officer could not withdraw the interest already granted to the assessee company under Section 244(1A) on the ground that the assessments for the years under appeal were made under Section 147 pursuant to the notices issued under Section 148. It is mentioned by the Appellate Commissioner that he agreed with the contention of the assessee that if it was necessary for the Assessing Officer to modify/reduce the amount of interest already paid under Section 244(1A) he should have done so by rectifying his order under which such interest payment was allowed. Thus, the revenue is aggrieved against the finding and direction of the Appellate Commissioner that the Assessing Officer cannot withdraw interest under Section 244(1A) which was already granted to the assessee company and the assessee has filed cross objections being aggrieved against the observation of the Appellate Commissioner that interest under Section 244(1A) can be withdrawn though there is no provision and for the observation that the Assessing Officer can modify/reduce interest by rectifying his earlier orders granting interest under Section 244(1A).
6. The learned departmental representative supported the action of the Assessing Officer in withdrawing the interest under Section 244(1A) which was already granted to the assessee company. It is further submitted by him that though there is no provision under Section 244(1A) to withdraw or increase or reduce the interest already granted yet it shall be assumed that the Assessing Officer impliedly had inherent power to withdraw, modify, increase or reduce interest already granted. He, therefore, strongly opposed the finding and direction of the Appellate Commissioner in the impugned order holding that the interest granted under Section 244(1A) cannot be withdrawn by the Assessing Officer. Regarding the objections taken in the cross objections the departmental representative submitted that the Appellate Commissioner was not wrong in saying that the Assessing Officer could rectify the order in order to modify/reduce the interest, under Section 244(1A) of the Act. In view of this submission the departmental representative strongly pleaded for the dismissal of the cross objections filed by the assessee-company.
7. Shri R.N. Bajoria, counsel for the assessee-company, submitted that the Appellate Commissioner was correct in holding that the increase in the amount of income and consequently the amount of liability pursuant to reassessment order under Section 147 cannot affect the provisions of Section 244(1A) under which the assessee got interest for the excess payment of tax. Shri Bajoria submitted that the Appellate Commissioner was also correct in holding that during the intervening period between when the refund was due on the earlier occasion on the basis of the decision of the Appellate authority and when the reassessment order under Section 147 is passed, and thus the extra tax cannot be considered to have been in existence at all and that there cannot be any question of relating the accrual of extra tax on account of reassessment made under Section 147. Shri Bajoria submits that the Appellate Commissioner did not go wrong to that extent and therefore no interference is called for by us in Revenue's appeals. Advancing argument in support of the cross objections filed Shri Bajoria submitted that the assessee's representative never contended before the Appellate Commissioner that if it was necessary the Assessing Officer could modify/reduce the amount of interest by rectifying his order under which such interest payment was allowed. Shri Bajoria forcefully submitted that when the assessee has challenged the action of the Assessing Officer in withdrawing the interest already granted under Section 244(1A) it could not have made such a contention before him. This observation of the Appellate Commissioner at page 5 of the impugned order is wholly uncalled for and not sustainable. To strengthen his argument further in support of the cross objections Shri Bajoria laid emphasis that the Assessing Officer has no power or authority under Section 244(1A) to withdraw, modify or reduce the interest already granted to the assessee under the said provision. He has drawn our attention to the provisions of Section 244(1A) and other provisions contained in Section 139(8), Section 215(3), Section 217(2), proviso to Section 220(2) and the new Sections 234A(4) and 244(3) introduced by the Direct Tax Laws (Amendment) Act, 1987 which are operational from 1-4-1989. According to Shri Bajoria when the Legislature intended that the interest should be increased or reduced a suitable provision is made in the relevant Sections mentioned above. The absence of any provision or power to the Assessing Officer to reduce or increase the interest payable to the assessee under Section 244(1A) clearly brings out the intention of the Legislature that whenever an interest is granted to any assessee under Section 244(1A) then the same cannot be withdrawn or increased or reduced later under other proceedings. When such a power is totally lacking in Section 244(1A) the action of the Assessing Officer cannot be supported on the ground that he possesses such implied and inherent power by assumption and presumption enabling him to withdraw interest already granted. The Appellate Commissioner is not justified in saying in the impugned order that if the Assessing Officer so desired he could rectify his order under which the interest was already granted. By saying so the Appellate Commissioner is instigating and directing the Assessing Officer to resort to the rectification provisions contained in the Income-tax Act which in law cannot be invoked on a debatable issue like the present one. Therefore, it is strongly urged by the assessee's counsel that the revenue's appeals be dismissed and the cross objections of the assessee be allowed.
8. We have heard the rival submissions made before us for and against the appeals as well as the cross objections. We have also perused the relevant provisions of the Income-tax Act which have been referred to by the assessee's counsel and on perusing the orders of the authorities below we are of the opinion that the revenue's appeals should be dismissed the cross objections of the assessee should be allowed. The assessee company was granted interest under Section 244(1A) as it was found then that there was excess payment of the demand raised against the assessee company which resulted in refund as laid down in the said section. On reading the provisions of Section 244(1A) we do not find that the Assessing Officer has been given any power or authority either to withdraw, reduce or increase interest. It is a well settled law that to do a particular act, the authorities concerned should clearly be empowered to do so by the Legislature and in the absence of any such power it has to be assumed that the legislature did not clothe or vest such authority with any such powers. The main contention of the assessee's counsel is that the provision of Section 244(1A) only gave power to the Assessing Officer to grant interest if certain conditions are fulfilled resulting in excess payment of tax/penalty till a particular point, of time namely, passing any order of assessment or penalty. Thus, interest starts running from a particular point of time and ends at a particular point of time namely; the making of assessment or penalty. No sooner the event ends or takes place finally the interest is quantified upto that particular point of time and this is granted to an assessee. Therefore, the interest which the assessee obtained earlier was in respect of the excess payment of tax found by the Assessing Officer at that point of time and in our view it was rightly so granted. If due to any reassessment proceedings the liability of the assessee to tax increases then, in our view the assessee cannot be asked to repay or return the interest which has already been granted under Section 244(1A) of the Act or to put in simple words the Assessing Officer cannot derive any power or authority under the said provision of Section 244(1A) to withdraw the same while passing another order of the reassessment. We are also unable to agree with the submission of the learned departmental representative that it shall be assumed and presumed that the Assessing Officer possessed inherent and implied power under Section 244(1A) to withdraw interest already granted to the assessee company pursuant to earlier orders. It has been laid down by the Supreme Court in the cases of CST v. Modi Sugar Mills Ltd. [1961] 2 SCR 189 and Baidyanath Ayurved Bhawan (P.) Ltd, v. Excise Commissioner [1971] 2 SCR 590 at p. 592 that it is not permissible to make assumption and presumption in fiscal provisions. It is also a settled law by now that nothing should be read in or read out in a fiscal provision and that there is no room for any intendment in interpreting any provision of law particularly when it comes to interpretation of fiscal laws. In our view therefore, the Legislature has only empowered the Assessing Officer to grant interest under Section 244(1A) but no such power has been conferred upon him to withdraw, reduce or increase the interest under the said provision by taking into account the reassessment proceedings as are found in the present case. We are inclined to take this view after perusing the provisions of Sections 139(8), 215(3), 217(2), proviso to Section 220(2) and the new provisions of Sections 234A(4) and 244A(3) of the Income-tax Act. Had the Legislature intended to get back the interest already awarded to an assessee under Section 244(1A) then a power would have been given to the Assessing Officer or any income-tax authority for that matter like the power found in the new Sections 234A and 244A mentioned above. We could have allowed the revenue's appeals by taking aid of other common law provisions, but are prevented due to the observations of their Lordships of the Supreme Court in the case of Rao Bahadur RavuluSubbaRao v. CIT [1956] 30 ITR 163 that Income-tax Act is a self-contained code, exhaustive of the matters dealt with therein and its provisions show an intention to depart from the common rule, Qui facit per alium facit per se. The revenue's appeals also cannot be allowed on the ground of equity because equity and taxation are not only strangers but enemies. We, therefore, hold that in the absence of any power to the Assessing Officer under Section 244(1A) he cannot withdraw the interest which was already granted to the assessee company in earlier years. The ground taken by the assessee in the cross objections is, therefore, allowed. We also affirm the finding of the Appellate Commissioner as contained in para 4(i) at p. 3 of the impugned order. In this view of the matter the revenue's appeals stand dismissed.
9. We now deal with the other ground taken by the assessee in the cross objections namely; that the Appellate Commissioner ought not to have said that the Assessing Officer can resort to the rectification provision to withdraw the interest granted under Section 244(1A). The provisions for rectification of orders of the Assessing Officer are contained in Section 154 of the Income-tax Act. We find much force in the submission of the assessee's counsel that by saying so the Assessing Officer will act at the behest of the Appellate Commissioner and the rectification order which may be passed by him will not be his (Assessing Officer) order but the order of the Appellate Commissioner. As per law, in exercising the powers of rectification the Assessing Officer or any other authority has to act judicially or quasi-judicially. Therefore, where any direction is given by any higher or superior authority to the Assessing Officer as to the manner in which a rectification order is to be passed then it would amount to interference with judicial or quasi-judicial function of the Assessing Officer. In that view of the matter a rectification order passed upon instigation from or at the behest or direction of any higher authority like the Appellate Commissioner is not valid and cannot be sustained. We, therefore, hold that the Appellate Commissioner was not justified in saying that the Assessing Officer can rectify the earlier orders in order to withdraw interest already granted to the assessee company under Section 244(1A) of the Act. We derive support to hold so from the decision of the Hon'ble Calcutta High Court in the case of ITO v. Eastern Scales (P.) Ltd. [1978] 115 ITR 323.
10. In the result, the appeals of the revenue are dismissed and the cross objections of the assessee are allowed.