Smt. Shobha Rani Shah, Rohtak v. ITO, Rohtak

ITA 1072/DEL/2010 | 1999-2000
Pronouncement Date: 31-05-2010 | Result: Allowed

Appeal Details

RSA Number 107220114 RSA 2010
Assessee PAN AREPS1066A
Bench Delhi
Appeal Number ITA 1072/DEL/2010
Duration Of Justice 2 month(s) 19 day(s)
Appellant Smt. Shobha Rani Shah, Rohtak
Respondent ITO, Rohtak
Appeal Type Income Tax Appeal
Pronouncement Date 31-05-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted G
Tribunal Order Date 31-05-2010
Assessment Year 1999-2000
Appeal Filed On 11-03-2010
Judgment Text
I.T.A. NO. 1071-74 /DEL/2010 1/10 IN THE INCOME TAX APPELLATE TRIBUNAL NEW DELHI BENCH G BEFORE SHRI A.D. JAIN JUDICIAL MEMBER AND SHRI A K GARODIA ACCOUTANT MEMBER ITA NO. 1071 1072 1073 & 1074 /DEL/2010 (ASSESSMENT YEAR 1998-99 1999-2000 2000-01 2001- 02) SMT. SHOBHA RANI SHAH VS. ITO WARD I ROHTAK H.NO.151 B-II PARA MOHALLA (HARYANA) ROHTAK (HARYANA) (APPELLANTS) (RESPONDENTS) PAN / GIR NO. AREPS1066A APPELLANT BY: SHRI K.L. GUGLANI ADV. RESPONDENT BY: SHRI KISHORE B. SR. DR ORDER PER BENCH: 1. THESE FOUR APPEALS ARE FILED BY THE ASSESSEE AGA INST THE ORDER OF LD. CIT(A) ROHTAK DATED 13.01.2010 FOR TH E ASSESSMENT YEARS 1998-99 TO 2001-02. SINCE COMMON ISSUE IS INVOLVED ALL THESE APPEALS WERE HEARD TOG ETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. THE GROUNDS RAISED BY THE ASSESSEE ARE IDENTICAL IN ALL THE FOUR APPEALS AND HENCE WE PRODUCE GROUNDS FORM I.T.A. NO. 1071/DEL/2010: 1)ON THE FACTS AND I LAW THE LD. CIT(A) ERRED IN CONFIRMING THE ORDER OF LD. A.O. REJECTING APPLICATION U/S 154 AND THUS IGNORING THE RATIO OF I.T.A. NO. 1071-74 /DEL/2010 2/10 SEVERAL JUDGEMENTS INCLUDING THOSE OF HON'BLE SUPREME COURT AND JURISDICTIONAL HIGH COURT ON THE ISSUE INVOLVED IN THIS CASE. 2) ON FACTS & IN LAW THE LD. A.O./CIT(A) ERRED IN HOLDING THAT BENEFIT OF TDS IS TO BE ALLOWED FROM 20.04.2001 THOUGH INTEREST IS EXIGIBLE ON THE SAME AMOUNT (I.E. BANK INTEREST) W.E.F. THE DATE OF DEFA ULT U/S 234A AND 234B IN RESPECT OF EACH ASSESSMENT YEAR. 2. BRIEFLY STATED THE FACTS NOTED BY THE A.O. IN P ARA 2.2- 2.5 OF HIS ORDER PASSED BY HIM U/S 154 ON 02.01.200 9 ARE REPRODUCED BELOW: 2.2 THE BRIEF FACTS FOR REOPENING OF THE CASE ARE THAT SMT. MAMNA DEVI W/O LATE SHRI RAM DITTA MAL HAD MADE A WILL ON 18.11.1992 IN FAVOUR OF HER DAUGHTER SMT. SHOBHA RANI. SHE DIED ON 20.11.1992. THE SAID WILL WAS REGISTERED IN THE OFFICE OF THE SUB- REGISTRAR ROHTAK ON 06.11.1996. LATER ON THE ADDL . DISTRICT JUDGE ROHTAK HAS GRANTED PROBATE OF WILL U/S 276 OF THE INDIAN SUCCESSION ACT 1925 IN FAVOUR OF THE ASSESSEE VIDE HIS ORDER DATED 30.11.2000. ON THE B ASIS OF PROBATE OF WILL THE ASSESSEE RECEIVED A SUM OF RS.19 07 078/- AS INTEREST FORM THE ORIENTAL BANK O F COMMERCE ROHTAK ON THE FDRS PURCHASED BY LATE SMT. JAMNA DEVI AS PER FORM NO.16A DATED 20.04.2001 THE TDS WAS DEDUCTED AMOUNTING TO RS.2 13 593/-. THE AFORESAID ORDER OF THE ADDL. JU DGE ROHTAK TANTAMOUNT TO A FINDING AS TO THE OWNERSHIP IN FAVOUR OF THE ASSESSEE OF THE ASSETS LISTED IN THE ORDER INCLUDING THE IMPUGNED FDRS ON WHICH INTEREST OF RS.19 07 078/- WAS RECEIVED BY THE ASSESSEE. AS SU CH THE LIMITATION FOR COMPLETION OF ASSESSMENT SHALL N OT BE APPLICABLE IN VIEW OF THE PROVISIONS OF SECTION 153 (3(II) AND 150(1) OF THE I. T. ACT 1961. I.T.A. NO. 1071-74 /DEL/2010 3/10 2.3 HOWEVER THE ASSESSEE HAS FILED HER RETURN OF INCOME DECLARING AN INCOME OF RS.1 28 120/- ON 11.07.2002 FOR THE ASSESSMENT YEAR 2002-03 CLAIMING REFUND OF RS.2 21 554/- FOR THE FIRSTS TIME. FROM THE PERUSAL OF COMPUTATION OF INCOME IT REVEALED THAT T HE AMOUNT OF INTEREST AMOUNTING TO RS.19 07 078/- ON WHICH TAX DEDUCTED AT SOURCE AT RS.2 13 593/- HAS N OT BEEN OFFERED FOR TAX PURPOSES BY THE ASSESSEE RATHE R SHE CLAIMED TDS CREDIT ON THE SAME AMOUNT DEDUCTED BY T HE ORIENTAL BANK OF COMMERCE ROHTAK. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE WAS ASKED AS TO WHY INTEREST AMOUNTING TO RS.19 07 078/ - MAY NOT BE ADDED BACK IN THE TOTAL INCOME OF THE ASSESSEE. DURING THE ASSESSMENT PROCEEDINGS THEY ASSESSEE REPLIED DATED 23.03.2005 SHE STATED THAT SHE IS MAINTAINING ACCOUNTS ON MERCANTILE BASIS AND INTERE ST EARNED BY HER MAY BE TAKEN ON ACCRUAL BASIS. FURTH ER THE STATEMENT OF SMT. SHOBHA RANI IS CORROBORATED F OR THE FACTS THAT IN COMPUTATION SHEET ENCLOSED WITH T HE SAID RETURN SHE HAS OFFERED INTEREST ON FDR ON ACCR UAL BASIS. THEREFORE IT IS TAKEN THAT THE ASSESSEE IS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING UNDER THE HEAD INCOME FROM OTHER SOURCES. FOR THIS PURPOSE SHE FURNISHED A LETTER FROM THE OBC ROHTAK IN WHIC H THE YEAR-WISE BREAK-UP HAS BEEN MADE. MY PREDECESS OR ALSO WROTE A LETTER TO THE BANK TO PROVIDE YEAR-WIS E BREAK-UP OF INTEREST RECEIVED BY THE ASSESSEE. THE INTEREST STATEMENT WAS ISSUED TO SMT. SHOBHA RANI O N 12.11.2003. ON THE BASIS OF STATEMENT OF INTEREST BREAK- UP THE YEAR-WISE INTEREST ACCRUED BY THE ASSESSEE I S AS UNDER (SUPPLIED BY THE OBC BANK):- ASSESSMENT YEAR AMOUNT OF INTEREST 1993-94 RS.1 36 508/- 1994-95 RS.2 85 287/- 1995-96 RS.2 85 287/- 1996-97 RS.2 85 287/- 1997-98 RS.2 85 287/- I.T.A. NO. 1071-74 /DEL/2010 4/10 1998-99 RS.2 85 287/- 1999-2000 RS.2 85 287/- 2000-01 RS.2 85 287/- 2001-02 RS.2 85 287/- 2002-03 RS. 13 615/- 2.4 THE ASSESSEE HAS FILED HER FIRST RETURN OF INCO ME AMOUNTING TO RS.1 28 120/- FOR THE ASSESSMENT YEAR 2002-03 ON 11.07.2002 AND THE SAME WAS PROCESSED U/ S 143(1) OF THE I. T. ACT ON 15.10.2003. NOTICE U/S 148 WAS ISSUED ON 14.10.2003 FOR THE REASSESSMENT OF TH E CASE FOR THE ASSESSMENT YEAR 2002-03 WHICH WAS DULY SERVED UPON THE ASSESSEE ON 16.10.2003. IN RESPONS E TO THE SAME THE ASSESSEE HAS FILED HER INCOME TAX RET URN DECLARING AN INCOME OF RS.1 41 730/- & INTEREST AMOUNTING TO RS.13 615/- SHE HAS RECEIVED FROM ORIENTAL BANK OF COMMERCE SHOWN ON ACCRUAL BASIS HERSELF. IT MEANS THAT THE ASSESSEE HAS ADDED THE INTEREST OF RS.13 615/- ON ACCRUAL BASIS. 2.5 RECORD HAS BEEN PERUSED REGARDING INCOME-TAX PAYMENTS BY THE ASSESSEE INCLUDING TDS AND IT IS REVEALED THAT AS PER TDS WAS DEDUCTED ON 20.04.2001 AMOUNTING TO RS.21 13 598/- ON A SUM OF RS.19 07 07 8/- AS INTEREST FROM THE ORIENTAL BANK OF COMMERCE ROHTAK (ONLY ONE CERTIFICATE FOR PAYMENTS MADE WAS ISSUED) ON OTHER PAYMENT OF INCOME-TAX WAS MADE BY THE ASSESSEE PRIOR TO THIS DATE I.E. 20.04.2001 FOR ANY OF THE ASSESSMENT YEARS. CREDIT OF TDS HAS BEEN GIVEN FROM THE DATE IT WAS DEDUCTED BY THE TAX DEDUCTOR ASSESSEE NEITHER WAS DOING ANY BUSINESS AND HENCE NO QUESTION OF MAINTAINING ACCOUNT AND BASIS THEREOF ARISES NOR FIELD ANY RETURN OF INCOME PRIOR TO ASSESSMENT YEAR 2002-03. IT WAS ON THE PLEA OF THE ASSESSEE THAT THE INTEREST INCOME WAS CHARGED TO TA X ON ACCRUAL BASIS DURING THE PROCEEDING U/S 147/143(3) OF THE I. T. ACT 1961 FOR THE ASSESSMENT YEAR 1998-99 TO 2001-02. HENCE THE CLAIM OF THE ASSESSEE THAT CRE DIT OF TDS SHOULD BE GIVEN FORM THE BEGINNING I.E. BY I.T.A. NO. 1071-74 /DEL/2010 5/10 PRESUMING THAT THE TAX HAS BEEN DEDUCTED DURING THE RELEVANT FINANCIAL YEAR IS CONTRARY TO THE FACTS OF THE CASE AS NO TDS WAS DEDUCTED DURING THE RELEVANT FINANCIAL YEAR. HENCE THE PLEA OF THE ASSESSEE TH AT CREDIT OF TDS SHOULD BE ALLOWED PRIOR TO DATE OF DEDUCTION IS NOT TENABLE. THEREFORE THE APPLICATI ON O THE ASSESSEE IS NOT ACCEPTABLE. 3. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE LD. CIT(A) BUT WITHOUT SUCCESS AND NO W THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 4. IT IS SUBMITTED BY THE LD. A.R. FOR THE ASSESSEE THAT IN THE PRESENT CASE THE ASSESSEE HAS FILED PETITION U /S 154 BEFORE THE A.O. AS ON 23.10.2008 AND COPY OF THIS APPLICATION U/S 154 FILED BY THE A.O. IS AVAILABLE AT PAGES 9-11 OF THE PAPER BOOK. IT IS ALSO SUBMITTED THAT IN QUANTUM PROCEEDINGS THE MATTER OF THE ASSESSEE WAS DECIDED BY THE TRIBUNAL AND THE COPY OF THE TRIBUNA L DECISION IS AVAILABLE AT PAGES 45-86 OF THE PAPER B OOK. OUR ATTENTION WAS DRAWN TO PARA 53-55 OF THE TRIBUN AL DECISION AS AVAILABLE AT PAGES 83-84 OF THE PAPER B OOK. IT IS SUBMITTED THAT IN THESE PARAGRAPHS IT IS HEL D BY THE TRIBUNAL THAT INTEREST U/S 234A AND 234B ARE CHARGE ABLE BUT FOR THAT PURPOSE TDS HAS TO BE REDUCED FROM THE AMOUNT OF TAX PAYABLE. IT IS SUBMITTED THAT WHILE PASSING THE APPEAL EFFECT ORDER THE A.O. HAS REDUC ED THE AMOUNT OF TDS FROM THE AMOUNT OF TAX PAYABLE BU T THE SAME WAS REDUCED ONLY W.E.F. 20.04.2001 I.E. TH E I.T.A. NO. 1071-74 /DEL/2010 6/10 ACTUAL DATE OF TDS AND NOT FROM THE VERY BEGINNING. IT IS SUBMITTED THAT SINCE THIS IS THE DEFAULT OF THE BANK REGARDING LATE DEDUCTION OF TDS IN THE RELEVANT YEA R AND FOR THAT INTEREST CANNOT BE CHARGED FROM THE ASSES SEE. RELIANCE WAS PLACED ON THE JUDGEMENT OF HON'BLE HIG H COURT OF DELHI RENDERED IN THE CASE OF CIT VS ANAND PRAKASH REPORTED IN 224 CTR 72 DELHI. IT IS SUBMIT TED THAT IT WAS HELD BY THE HON'BLE HIGH COURT OF DELHI IN THAT CASE THAT THE ASSESSEE CANNOT BE ASKED TO DO A NY IMPOSSIBLE TASK. OUR ATTENTION WAS DRAWN TO PARA 1 4 OF THE JUDGEMENT OF HON'BLE HIGH COURT OF DELHI. AS AGAINST THIS LD. D.R. FOR THE REVENUE SUPPORTED TH E ORDERS OF AUTHORITIES BELOW. IT IS ALSO SUBMITTED BY HIM THAT AS PER THE JUDGEMENT OF THE HONBLE APEX COURT RENDERED IN THE CASE OF ANJUM GHASWALA AS REPORTED IN 252 ITR 01 INTEREST IS MANDATORY AND HENCE NO INTERFERENCE IS CALLED FOR IN THE ORDERS OF AUTHORI TIES BELOW. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERU SED THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE JUDGEMENTS CITED BY BOTH THE SIDES AND ALSO THE TRI BUNAL DECISION IN ASSESSEES OWN CASE WHICH IS AVAILABLE IN THE PAPER BOOK. SO FAR AS THE CHARGEABILITY OF THE INTEREST IS CONCERNED IT HAS ALREADY BEEN HELD BY THE TRIBUNAL IN ITS EARLIER ORDER DATED 28.02.2007 THAT I.T.A. NO. 1071-74 /DEL/2010 7/10 INTEREST U/S 234A AND 234B ARE CHARGEABLE. REGARDI NG CALCULATION OF INTEREST UNDER THESE TWO SECTIONS I T IS HELD BY THE TRIBUNAL THAT INTEREST IS PAYABLE ON AM OUNT OF ASSESSED TAX AFTER REDUCING THE TDS. THE A.O. H AS ALSO COMPUTED THE INTEREST AFTER DEDUCTING THE TDS FROM THE AMOUNT OF ASSESSED TAX BUT THAT WAS DONE BY THE A.O. W.E.F. 20.04.2001 I.E. THE ACTUAL DATE OF TDS BY THE BANK AND NOT FROM THE FIRST DATE FROM WHICH IN TEREST HAS BEEN CHARGED. THE CLAIM OF THE ASSESSEE BEFORE US IS THAT INTEREST SHOULD BE WORKED OUT AFTER DEDUCTI ON OF TDS FROM THE VERY FIRST DATE OF THE CHARGING OF INT EREST. WE ARE IN AGREEMENT WITH THE LD. A.R. FOR THE ASSESS EE ON THIS ASPECT BECAUSE AS PER THE PROVISIONS OF SEC TION 234A AND 234B FOR THE PROPOSE OF COMPUTATION OF INTEREST UNDER THESE TWO SECTIONS FROM THE AMOUNT OF THE ASSESSED TAX TDS AMOUNT HAS TO BE REDUCED. IT WAS SO DIRECTED BY THE TRIBUNAL ALSO IN THE ASSESSEES OWN CASE AS PER ITS EARLIER ORDER DATED 28.02.2007. TH E DISPUTE IN THE PRESENT CASE IS LIMITED TO THE EXTEN T AS TO WHETHER SUCH REDUCTION OF TDS FROM THE ASSESSED TAX FOR THE PURPOSE OF CALCULATING INTEREST U/S 234A AN D 234B SHOULD BE FROM THE FIRST DATE OF THE CHARGING OF INTEREST OR FROM THE DATE WHEN THE TDS WAS ACTUALLY DEDUCTED BY THE PAYER I.E. THE BANK IN THE PRESENT CASE. AFTER CONSIDERING THE PROVISIONS OF SECTION 234A AN D I.T.A. NO. 1071-74 /DEL/2010 8/10 234B WE FIND THAT THERE IS NO SUCH PROVISION IN TH ESE SECTIONS THAT IF THE TDS IS DEDUCTED BY THE PAYER O N A LATER DATE FOR THE PURPOSE OF COMPUTATION OF INTER EST UNDER THESE TWO SECTIONS THE AMOUNT OF SUCH TDS SHOULD BE DEDUCTED FROM THE AMOUNT OF ASSESSED TAX W.E.F. SUCH LATER DATE. AS PER THE PROVISIONS OF S ECTION 234A AND 234B FROM THE AMOUNT OF ASSESSED TAX THE AMOUNT OF TDS HAS TO BE DEDUCTED FOR THE PURPOSE OF COMPUTATION OF INTEREST UNDER THESE TWO SECTIONS. T DS IS ACTUALLY DEDUCTED BY THE PAYER IN THE PRESENT CA SE. WHILE WORKING OUT INTEREST PAYABLE BY THE ASSESSEE U /S 234A AND 234B THE A.O. HAS ALSO REDUCED THE AMOUNT OF TDS FROM ASSESSED TAX BUT SUCH REDUCTION OF TDS FROM ASSESSED TAX HAS BEEN MADE BY THE A.O. FROM TH E DATE ON WHICH TDS WAS DEDUCTED BY THE PAYER AND NOT FROM THE FIRST DATE FROM WHICH THE INTEREST HAS B EEN CHARGED BY THE A.O. UNDER THESE TWO SECTIONS IN THE SE FOUR YEARS. NOW THE QUESTION IS AS TO WHETHER SUC H REDUCTION OF TDS FROM THE AMOUNT OF ASSESSED TAX FO R THE PURPOSE OF CALCULATION OF INTEREST LIABILITY OF THE ASSESSEE U/S 234A AND 234B SHOULD BE FROM THE ACTUA L DATE OF TDS BY THE PAYER I.E. BANK OR FROM THE FIRS T DATE OF THE CHARGING OF INTEREST. AS PER THE PROVISIONS OF THESE TWO SECTIONS I.E. SECTION 234A AND 234B THER E IS NO SUCH CONDITION IMPOSED THAT SUCH REDUCTION OF TD S I.T.A. NO. 1071-74 /DEL/2010 9/10 FROM THE AMOUNT OF ASSESSED TAX SHOULD BE FORM THE ACTUAL DATE OF TDS BY THE PAYER. UNDER THIS LEGAL AND FACTUAL POSITION WE ARE OF THE CONSIDERED OPINION THAT WHEN INTEREST INCOME OF THE ASSESSEE IS MADE LIABLE TO TAX FOR THE RELEVANT ASSESSMENT YEAR OF WHICH SUCH INCOME IS RELATED TO TDS DEDUCTED THERE FROM HAS T O BE REDUCED FROM THE AMOUNT OF ASSESSED TAX FOR THE PUR POSE OF CALCULATION OF INTEREST U/S 234A AND 234B FROM T HE FIRST DATE OF THE PERIOD FOR WHICH INTEREST IS BEI NG CHARGED AND NOT FROM THE LATER DATE BEING THE DATE OF ACTUAL DEDUCTION OF TDS BY THE PAYER I.E. THE BANK. IN THE PRESENT CASE THE ACTUAL DEDUCTION OF TDS WAS M ADE BY THE PAYER I.E. BANK ON A DATE AFTER ORDER OF COU RT IN THE PROBATE PROCEEDINGS U/S 276 OF THE INDIAN SUCCESSION ACT 1925 IN FAVOUR OF THE ASSESSEE VIDE ORDER DATED 3.11.2000. CONSIDERING ALL THESE FACTS AND THE RELEVANT LEGAL PROVISIONS WE ARE OF HUMBLE OPI NION THAT THE A.O. IS NOT JUSTIFIED IN REDUCING THE AMOU NT OF TDS FROM THE AMOUNT OF ASSESSED TAX FOR THE PURPOSE OF COMPUTING INTEREST LIABILITY OF THE ASSESSEE U/S 23 4A AND 234B FROM THE DATE OF ACTUAL TDS BY THE BANK I.E. P AYER WHEREAS INTEREST HAS BEEN CHARGED BY HIM UNDER THES E TWO SECTIONS FROM THE FIRST DATE OF THE RELEVANT ASSESSMENT YEAR U/S 234B AND FROM THE DUE DATE OF FILING OF RETURN OF INCOME FOR THE RELEVANT ASSESSM ENT I.T.A. NO. 1071-74 /DEL/2010 10/10 YEAR. IN OUR HUMBLE OPINION INTEREST FROM THE FIR ST RELEVANT DATE AS PER THE PROVISIONS OF THESE TWO SE CTIONS SHALL BE COMPUTED AFTER REDUCING THE AMOUNT OF TDS FROM THE AMOUNT OF ASSESSED TAX. WE ORDER ACCORDIN GLY. 6. IN THE RESULT ALL THEE FOUR APPEALS OF THE ASSE SSEE ARE ALLOWED. 7. THIS DECISION WAS PRONOUNCED IN THE OPEN COURT ON 31 ST MAY 2010. SD./- SD./- (A. D. JAIN) (A K GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED:31 ST MAY 2010 SP. COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT TRUE COPY: BY ORDER 4. CIT(A) 5. DR DY. REGISTRAR ITAT NEW DELHI