Income Tax Appellate Tribunal - Chandigarh
Ito vs Dr. Manjit Singh Sekhon on 30 January, 2003
Equivalent citations: (2004)91TTJ(CHD)393
ORDER
Joginder Pall, A.M. All these five appeals have been filed by the revenue against the consolidated order dated 17-3-1997, of the Commissioner (Appeals), Chandigarh, for the assessment years 1989-90 to 1993-94. Since the issue involved in all these appeals is common, these were heard together and are being disposed of by this consolidated order for the sake of convenience.
2. The only effective issue raised in these appeals is that Commissioner (Appeals) was not justified in deleting the interest charged under section 234B of the Income Tax Act in view of the fact that the said order ceased to exist when Chief Commissioner partially waived the interest and his order became final under the provisions of section 273A(5) of the Income Tax Act.
The facts of the case are that the government had acquired the agricultural land owned by the assessee on 12-7-1984. The assessee was awarded compensation by the Land Acquisition Officer on 20-11-1985. However, the compensation awarded was challenged before the Punjab and Haryana High Court. The Hon'ble High Court enhanced the compensation vide its order dated 15-4-1991. Both the parties approached the Supreme Court against the judgment of the Punjab and Haryana High Court and the Supreme Court confirmed the judgment of Punjab and Haryana High Court vide its judgment dated 9-8-1991. Subsequently, the Land Acquisition Officer quantified the compensation and year-wise interest on 15-5-1992. As per the judgment of Hon'ble Supreme Court in the cases of Ramabai & Ors. v. CIT (1990) 181 ITR 400 (SC) and Krishna Rao v. CIT (1990) 181 ITR 408 (SC), the interest was assessable in the respective years on accrual basis. Therefore, the assessing officer initiated proceedings under section 148 in order to bring to tax the yearly interest and the assessments for all the assessment years were completed on 25-1-1996, including therein interest of Rs. 83,090 for each of the assessment years under reference. The assessing officer, inter alia, also charged interest under section 234B.
3. Aggrieved, the assessee filed appeals against the orders of the assessing officer for charging interest under section 234B for all the assessment years under reference. Besides, the assessee also filed application before the Chief Commissioner on 1-2-1996, requesting for waiver of interest in view of the CBDT's Circular F.No. 400/234/95-IT(B), dated 23-5-1996. The Chief Commissioner, North West Region, Chandigarh, partially waived the interest charged under section 234B upto 30-4-1991, for the assessment years under reference.
4. In the appeals filed before the Commissioner (Appeals), it was contended that assessee disputed the liability of charging of interest in view of the fact that on the dates on which advance tax was payable, no income had accrued to the assessee. It was only on 15-5-1992, when the interest was quantified and assessee received the enhanced compensation along with the interest that the assessee became liable to tax in respect of interest income. Therefore, by relying on the various judgments reported in 4 ITR 276, 207 ITR 133 (Raj), 198 TTR 66 (Raj), Smt. S. Mageshwari v. Asstt. CIT (1993) 201 ITR-472 (Kar), CIT v. Triple Crown Agencies (1993) 204 ITR 377 (Gau), S.M. Kabeer v. Income Tax Officer (1995) 216 ITR 359 (Mad) and the judgment of Hon'ble Supreme Court in the case of Central Provinces Manganese Ore Co. Ltd. v. CIT (1986) 160 ITR 961 (SC), the assessee contended that appeals before the Commissioner (Appeals) were admissible because the assessee denied its liability of interest under section 234B. By relying on the judgments of the various High Courts including the Supreme Court, the Commissioner (Appeals) admitted the appeals and held that no interest under section 234B was liable to be charged from the assessment years 1989-90 to 1992-93 because the dates on which advance tax was payable, no income had accrued to the assessee. As regards the assessment year 1993-94, the Commissioner (Appeals) held that interest along with the enhanced compensation was paid to the assessee on 15-5-1992. Thus, the assessee could have paid the advance tax for the assessment year 1993-94 on the due dates. He, therefore, upheld the assessing officer's order in charging interest under section 234B for the assessment year 1993-94. Revenue is aggrieved by the order of the Commissioner (Appeals). Hence, these appeals before us.
5. The learned departmental Representative drew our attention to a copy of order dated 23-4-1996, of the Chief Commissioner, North West Region, Chandigarh, where interest charged was partially waived for the assessment years 1989-90 to 1992-93. He drew our attention to sub-section (5) of section 273A, which provides that every order made under section 273A shall be final and shall not be called into question by any court or any other authority. Therefore, the Commissioner (Appeals) was not justified in entertaining the appeals and deleting the impugned interest. He relied on the following judgments:
(i) Amrik Singh v. CWT (1988) 170 ITR 656 (P&H)
(ii) Neeraj Dyeing v. CIT (1997) 225 ITR 113 (All)
(iii) CWT v. RaO Kumar Cement House (1992) 195 ITR 474 (P&H).
6. The learned counsel for the assessee, on the other hand, strongly relied on the order of the Commissioner (Appeals). He submitted that section 273A refers to waiver of penalty. This section does not deal with the cases of waiver of interest. He submitted that on the basis of representations received from the various assessees, the CBDT vide its abovementioned circular had directed the Chief CITs/Director Generals of Income-tax to waive interest charged under sections 234A, 234B and 234C in cases where income other than capital gains is received or accrued after due date of payment of the first and subsequent instalments of advance tax, which was neither anticipated nor was in the contemplation of the assessee. He placed a copy of the said circular on our file. He submitted that the Chief Commissioner waived the interest by relying on the abovementioned instructions of the CBDT and not under section 273A of the Income Tax Act. Therefore, sub-section (5) of section 273A would not be applicable to the facts of the present case. He further relied on the decision of Tribunal, Chandigarh Bench, dated 18-2-1998 in the case of Dr. (Mrs.) Devinder Kaur Sekhon v. Asstt. CIT in ITA Nos. 780 to 786/Chd/1996, dated 18-2-1998, for the assessment years 1986-87 to 1992-93, where on identical facts the Tribunal held that provisions of section 234B were not attracted in the case. He submitted that Smt. Devinder Kaur Sekhon is mother of the assessee and the facts of assessee's case are the same as that of her mother, Smt. Devinder Kaur. Therefore, this issue is squarely covered by the decision of Tribunal, Chandigarh Bench, in the case of assessee's mother, Smt. Devinder Kaur Sekhon (supra).
7. We have heard both the parties and carefully considered their rival submissions. We have also examined the facts, evidence and material on record. Since the order of assessing officer in charging interest under section 234B for the assessment year 1993-94 has been upheld by the Commissioner (Appeals), the revenue has erroneously filed this appeal. The same is, therefore, dismissed in limine being infructuous.
8. As regards the remaining appeals, interest was charged under section 234B at the time of completing the assessments. The assessee had filed appeals before the Commissioner (Appeals) challenging the orders of the assessing officer on the ground that liability under section 234B was not attracted. The assessee also filed application before the Chief Commissioner for waiver of interest. The Chief Commissioner partially waived the interest for the assessment years 1989-90 to 1993-94. We also find from a copy of the order of Chief Commissioner that he did not impose any condition while disposing of assessee's application for waiver of interest. As per CBDT's Circular dated 23-5-1996 (supra), the Chief Commissioner could have imposed any other conditions deemed fit while allowing reduction/waiver of interest. But no such condition was imposed.
8.1 As regards section 273A(5) of the Income Tax Act, the same deals with waiver of penalties. Earlier, sub-clause (iii) of sub-section (1) of section 273A provided that Chief Commissioner could reduce or waive the amount of interest paid or payable under sub-section (8) of section 139 or section 215 or section 217. But this sub-clause was omitted by the Direct Tax Laws (Amendment) Act, 1989, with effect from 1-4-1989. Though the above mentioned circular of the CBDT conferred powers on the Chief CIT/Director General of Income-tax to reduce or waive the interest charged under these sections, yet the corresponding provisions in sub-section of section 273A have not been restored in the Income Tax Act. Thus, such reduction/waiver is allowed as per administrative instructions of the Board. Therefore, section 273A(5) would not be applicable to the present case. Even the administrative instructions issued vide Board's Circular F. No. 400/234/95-IT(B), dated 23-5-1996, do not impose any restriction to the effect that in case assessee approaches the Chief CIT/Director General of I.ncome-tax/CIT for waiver of interest, he shall not file or withdraw the appeals filed before any appellate authority. However, the Chief CIT/Director General of Income-tax has been empowered to impose such conditions, as he deems fit. But no such restrictions were imposed in the present case. Therefore, the objection raised in this regard is not valid.
8.2 As regards the judgment of Punjab and Haryana High Court in the case of Amrik Singh v. CWT (supra), relied 'upon by the learned departmental Representative, the same is distinguishable on facts. In that case, the assessing officer had imposed penalty under section 18(l)(a) of the Wealth Tax Act, The assessee also moved an application under section 18(2A) before the CWT for waiver of penalty. The CWT reduced the penalty to Rs. 5,000. However, while passing the order for giving effect to the order of CWT, the assessing officer mentioned as if he had passed the order. On these facts, the Hon'ble Punjab and Haryana High Court held that the order passed by the CWT under section 18(2A) was not appealable in view of specific provisions of section 18B(5)., However, in the present cases, we have already stated that interest has not been reduced under section 273A of the Income Tax Act. Same are the facts in the case of CWT v. Ravi Kumar Cement House (supra). There also, penalty levied under section 18(l)(a) was reduced by the CWT under section 18B. On these facts, the Hon'ble Punjab & Haryana High Court held that such order was not appealable. The judgment of Allahabad High Court in the case of Neeraj Dyeing v. CIT (supra), is also distinguishable on facts for the reason that the assessee and the revenue had come to a settlement. On these facts, the Hon'ble Allahabad High Court held that since the settlement was agreed to by the assessee, the assessee could not later challenge the penalties imposed by the assessing officer. Therefore, none of the judgments relied upon by the learned departmental Representative is applicable to the facts of the present case.
9. As regards merits of the cases, the decision of Tribunal, Chandigarh Bench, in the case of Dr. (Mrs.) Devinder Kaur Sekhon v. Asstt. CIT in ITA Nos. 780 to 786/Chd/1996 for the assessment years 1986-87 to 1992-93, is squarely applicable to the facts of the present cases of the assessee. Admittedly, the assessee received enhanced compensation along with the interest on 15-5-1992. Therefore, on the relevant dates, when advance tax instalments were due, no income had accrued or arisen to the assessee. Respectfully following the order dated 18-2-1998, of Tribunal, Chandigarh Bench, in the case of Dr. (Mrs.) Devinder Kaur Sekhon v. Asstt. CIT in ITA Nos. 780 to 786/Chd/1996 for the assessment years 1986-87 to 1992-93, we hold that the Commissioner (Appeals) was justified in deleting the interest charged under section 234B. Accordingly, we confirm the consolidated order of the Commissioner (Appeals) and dismiss all the grounds of revenue's appeals.
10. In the result, all the appeals of the revenue are dismissed.