DCIT, New Delhi v. M/s. Bharat Aluminium Co. Ltd, New Delhi

ITA 4612/DEL/2009 | 1998-1999
Pronouncement Date: 19-02-2010 | Result: Dismissed

Appeal Details

RSA Number 461220114 RSA 2009
Bench Delhi
Appeal Number ITA 4612/DEL/2009
Duration Of Justice 2 month(s) 12 day(s)
Appellant DCIT, New Delhi
Respondent M/s. Bharat Aluminium Co. Ltd, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 19-02-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 19-02-2010
Assessment Year 1998-1999
Appeal Filed On 07-12-2009
Judgment Text
I.T.A. NO.4612 /DEL/09 1/6 IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH A NEW DELHI) BEFORE SHRI R.P. TOLANI JUDICIAL MEMBER AND SHRI A.K. GARODIA ACCOUNTANT MEMBER I.T.A. NO.4612 /DEL/2009 ASSESSMENT YEAR : 1998-99 DCIT M/S BHARAT ALUMINIUM CO. LTD. CIRCLE-2 (1) CORE-6 SCOPE COMPLEX NEW DELHI. V. LODHI ROAD NEW DELHI. APPELLANT) (RESPONDENT) PAN /GIR/NO.AAACB-1290-N APPELLANT BY : SHRI A.K. PANDEY CIT-DR RESPONDENT BY : SHRI AJAY VOHRA ADVOCATE. ORDER PER A.K. GARODIA AM: THIS IS REVENUE'S APPEAL DIRECTED AGAINST THE ORDER OF LD CIT(A)-V NEW DELHI DATED 30.9.2009 FOR ASSESSMENT YEAR 1998-99. 2. THE GROUNDS RAISED BY THE REVENUE READ AS UNDER: - 1. THE LD CIT(A) ERRED ON FACTS AND IN LAW IN DIREC TIN TO CALCULATE U/S 244A OF THE INCOME TAX ACT 1961 ON REFUND OF RS.9 61 45 54 9/- ISSUED TO THE ASSESSEE U/.S 154/254 OF THE INCOME TAX ACT 1961 W .E.F. 1.4.1998 TO THE DATE OF ISSUE OF REFUND IGNORING THAT: A) AS PER PROVISO TO SUB SECTION 2OF SECTION 115JAA OF THE IT ACT NO INTEREST SHALL BE ALLOWED ON REFUND ARISING OUTNOF TAX CREDIT ALLOWED U/S 115JAA (1) OF THE IT ACT. . I.T.A. NO.4612/DEL/09 2/6 B) REFUND DUE TO CREDITOF MAT ALLOWED U/S 115JAA OF THE IT ACT DOES NOT FALL IN THE AMBIT OF SECTION 244A OF THE IT ACT . 2. THE LD CIT(A) ERRED ON FACTS AND IN LAW IN DIREC TING TO CHARGE INTEREST U/S 234C OF THE IT ACT AFTER ADJUSTING MAT CREDIT BY IG NORING THAT ONLY AFTER THE AMENDMENT BROUGHT INTO STATUTE IN RESPECT OF SECTIO N 234C OF THE ACT BY THE FINANCE ACT . 2005 W.E.F. 1.4.2007 THAT WHILE COMPUTING INTEREST U/S 234C OF THE ACT THE TAX CHARGEABLE ON TOTAL INCOME DECLAFRED HAS TO BE REDUCED BY THE AMOUNT OF MAT CREDIT THIS IS AN ASSE SSEE'S APPEAL DIRECTED AGAINST THE ORDER OF LD CIT(A)- NEW DELHI DATED FOR ASSESSMENT YEAR. 3. BRIEF FACTS OF THE CASE ARE THAT IN THE IMPUGNED ORDER U/S 154/254 OF THE INCOME TAX ACT 1961 PASSED BY THE ASSESSING OFFICE R ON 15.2.2008 IT WAS HELD BY THE ASSESSING OFFICER THAT THE ASSESSEE IS ENTIT LED FOR TAX CREDIT U/S 115JAA OF THE IT ACT TO THE EXTENT OF RS.9 61 45 549/-. HE AL LOWED THE ASSESSEE CREDIT OF THIS AMOUNT AS PER THE PROVISIONS OF SECTION 115JAA (1) READ WITH SECTION 115JAA(5) OF THE IT ACT. IT WAS HELD BY THE ASSESSI NG OFFICER IN THE SAME ORDER THAT NO INTEREST U/S 244A IS TO BE ALLOWED TO THE A SSESSEE ON THIS AMOUNT OF TAX CREDIT OF RS.961.45 LAKHGS IN VIEW OF PROVISO TO SU B SECTION (2) OF SECTION 115JAA OF THE IT ACT. AGAINST THIS SECOND DIRECTION OF LD ASSESSING OFFICER THAT NO INTEREST IS ALLOWABLE TO THE ASSESSEE U/S 244A THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE LD CIT(A). ONE MORE ISSUE WAS RAISED BY THE ASSESSEE BEFORE THE LD CIT(A) THAT THE ASSESSING OFFICER WAS NOT JUSTIF IED IN CHARGING INTEREST U/S 234C AMOUNTING TO RS.55.52 LAKHS BEFOE GIVING EFFEC T TO THE MAT CREDIT RELIEF AVAILABLE TO THE ASSESSEE U/S 115JAA. BOTH THESE AS PECTS WERE DECIDED BY LD CIT(A) IN FAVOUR OF THE ASSESSEE AND NOW THE REVENU E IS IN APPEAL BEFORE US. 4. LD DR OF THE REVENUE SUPPORTED THE ORDER OF THE ASSESSING OFFICER PASSED BY HIM U/S 154/254 OF THE ACT WHEREAS LD AR OF THE ASSESSEE SUPPORTED THE ORDER OF LD CIT(A). RELIANCE WAS ALSO PLACED ON THE JUDGMENT OF HON'BLE . I.T.A. NO.4612/DEL/09 3/6 JURISDICTIONAL HIGH COURT RENDERED IN THE CASE OF C IT V. JINDAL EXPORTS LTD. AS REPORTED IN 314 ITR 137. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE GON E THROUGH THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE DISPUTE BEFOR E THE HON'BLE DELHI HIGH COURT IN THE CASE OF JINDAL EXPORTS LTD. (SUPRA) WAS AS T O WHETHER PRIOR TO APRIL IST 2007 WHILE COMPUTING THE INTEREST U/S 234B & 234C CREDIT FOR TAX PAID U/S 115JAA WAS TO BE CONSIDERED BECAUSE IT IS ADMITTED POSITION THAT AFTER THE AMENDMENT BY THE FINANCE ACT 2006 W.E.F. 1.4.2007 CREDIT OF TAX PAID U/S 115JAA HAVE TO BE SET OFF BEFORE INTEREST IS COMPUT ED U/S 234B & 234C OF THE ACT. THIS WAS ALSO A DISPUTE BEFORE THE HON'BLE DE LHI HIGH COURT IN THAT CASE AS TO WHETHER SUCH INTEREST CAN BE CHARGED U/S 234B & 234C BY WAY OF PASSING AN ORDER U/S 154 OF THE ACT. REGARDING CHARGING OF INT EREST U/S 234B & 234C IT WAS HELD BY HON'BLE DELHI HIGH COURT THAT IN THE YEAR W HEN THE ASSESSEE IS ELIGIBLE FOR TAX CREDIT U/S 115JAA SUCH TAX CREDIT REPRESENT S TAX ALREADY PAID AND AVAILABLE AS CREDIT AT THE BEGINNING OF THE YEAR AN D CONSEQUENTLY THE ASSESSEE CANNOT BE CHARGED INTEREST ON SOMETHING WHICH IT HA D ALREADY PAID. HENCE THIS ASPECT OF THE MATTER IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE JUDGMENT OF HON'BLE DELHI HIGH COURT THAT FOR CHARG ING INTEREST U/S 234C TAX CREDIT AVAILABLE TO THE ASSESSEE U/S 115JAA HAS TO BE REDUCED FROM THE LIABILITY OF THE ASSESSEE FOR MAKING PAYMENT OF ADVANCE TAX AND SUCH INTEREST HAS TO BE COMPUTED AFTER SETTING OFF THE TAX CREDIT AVAILABLE TO THE ASSESSEE. WE DIRECT ACCORDINGLY. 6. REGARDING THE CLAIM OF THE ASSESSEE THAT THE ASS ESSEE IS ELIGIBLE FOR INTEREST U/S 244A WE FIND THAT THIS ASPECT HAS BEE N DECIDED BY THE LD CIT(A) AS PER PARA NO.4.2. & 4.3. OF HIS ORDER WHICH ARE REPR ODUCED BELOW: 4.2. THE EXPRESSION ADVANCE TAX HAS ALSO BEEN CO NSIDERED BY THE HON'BLE DELHI HIGH COURT IN THE CASE OF JINDAL EXPO RTS (SUPRA) AND AT PAGE 166 OF 314 ITR THE DELHI HIGH COURT OBSERVED IN FO LLOWING WORDS:- . I.T.A. NO.4612/DEL/09 4/6 WE FEEL THAT IT WOULD BE FRUITFUL TO REMEMBER WHAT WAS SAID BY SINHA CJ (AS HIS LORDSHIP THEN WAS) WHILE SPEAKING FOR A DIVISION BENCH OF THIS COURT IN DR. PRANNOY ROPY V. CIT (SUP RA) WITH REGARD TO THE INTERPRETATION TO BE PLACED ON THE TERM ADV ANCE TAX AS DEFINED IN SECTION 2(1) OF THE SAID ACT. IT WAS OBS ERVED THAT AN INTERPRETATION CLAUSE AS IS WELL-KNOWN IT IS NOT A POSITIVE ENACTMENT. IT WAS SPECIFICALLY NOTICED THAT S. 2 OF THE SAID ACT BEGAN WITH THE WORDS UNLESS THE CONTEXT OTHERWISE REQUIR ES. THE DIVISION BENCH HELD THAT THOUGH ADVANCE TAX HAS BEEN DEFIN ED TO MEAN THE ADVANCE TAX PAYABLE IN ACCORDANCE WITH THE PROVISIO NS OF CHAPTER XVII-C SUCH A DEFINITION IS NOT AN EXHAUSTIVE ONE AND THAT ADVANCE TAX APART FROM BEING USED ONLY FOR THE PURPOSE OF CHAPTER XVII-C MAY BE HELD TO BE TAX PAID IN ADVANCE BEFORE ITS DU E DATE. IN OTHER WORDS THE TERM ADVANCE TAX IS NOT RESTRICTED TO MEAN THAT ADVANCE TAX PAYABLE IN ACCORDANCE WITH THE PROVISIONS OF CH APTER XVII-C. IF THE CONTEXT REQUIRES ADVANCE TAX MAY EXTEND BEYON D THE TERRITORY OF CHAPTER-XVII-C AND COULD VERY WELL REFER TO ANY TAX PAID IN ADVANCE BEFORE ITS DUE DATE. MAT CREDIT REPRESENTS THAT PORTION OF MAT WHICH WAS NOT ACTUALLY PAYABLE BY THE COMPANY A SSESSEE BUT HAS ALL THE SAME BEEN COLLECTED BY THE GOVT. IT R EPRESENTS THE TAX PAID BEFORE IT IS DUE. IN OUR VIEW THE MAT CREDIT WHICH IS AVAILABLE FOR SET OFF IN A YEAR FALLS WITHIN THE MEANING OF ADVANCE TAX BECAUSE THE CONTEXT REQUIRES US TO GIVE SUCH A PURP OSIVE MEANING. 4.3. IN VIEW OF SUCH ANALYSIS OF THE EXPRESSION AD VANCE TAX AS MADE BY THE JURISDICTIONAL DELHI HIGH COURT IN THE CASE OF JINDAL EXPORTS (SUPRA) WHICH HAS BEEN AFFIRMED BY THER MADRAS HIGH COURT I N THE CASE CHEMPLAST SANMAR LTD. (SUPRA) AS WELL AS KEEPING INTO CONSID ERATION THE AVAILABILITY OF SUCH MAT CREDIT ON THE VERY FIRST DAY OF THE REL EVANT PREVIOUS YEAR EVEN BEFORE THE DUE DATE OF THE ADVANCE TAX INSTALLMENT IT IS CLEAR THAT FOR THE PURPOSE OF CALCULATION OF DEMAND THE ADJUSTMENT AN D SET OFF OF THE MAT . I.T.A. NO.4612/DEL/09 5/6 CREDIT WOULD BE GIVEN EFFECT EVEN PRIOR TO THE ACTU AL ADVANCE TAX PAID BY THE ASSESSEE IN TERMS OF SECTION 208 OF THE ACT AND IN VIEW OF SUCH POSITION OF LAW THE AMOUNT OF REFUND OF RS.9 61 45 549/- AS ISSUED BY THE ASSESSING OFFICER IS IN THE NATURE OF EXCESS AMOUNT OF ADVANCE TAX REFUNDABLE TO THE ASSESSEE AND CANNOT BE CONSIDERED AS A REFUND OF MAT CREDIT BECAUSE MAT CREDIT AVAILABLE TO THE ASSESSEE IS ONLY MEANT FOR THE PURPOSE OF ADJUSTMENT AGAINST THE DEMAND OF SUBSEQU ENT YEARS AND NOT FOR ISSUE OF REFUND. HENCE THE APPELLANT IS FULLY E NTITLED FOR INTEREST U/S 244A OF THE ACT ON THE AMOUNT OF REFUND OF RS.9 61 45 549/- ISSUED TO THE ASSESSEE. THE ASSESSING OFFICER IS DIRECTED TO CALC ULATE THE INTEREST U/S 244A FROM 1.4.1998 TILL THE DATE OF ISSUE OF REFUND ON RS.9 .61 45 549/- AT THE PRESCRIBED INTEREST RATES AND REFUND THE SAME A CCORDINGLY. 7. AS PER THE JUDGMENT OF HON'BLE DELHI HIGH COURT RENDERED IN THE CASE OF JINDAL EXPORTS LTD. (SUPRA) MAT CREDIT WHICH IS AVA ILABLE FOR SET OFF FALLS WITHIN THE MEANING OF ADVANCE TAX. IN VIEW OF THIS WE ARE O F THE CONSIDERED OPINION THAT NO INTERFERENCE IS CALLED FOR IN THE ORDER OF LD CI T(A) ON THIS ISSUE BECAUSE IF THE CREDIT OF MAT U/S 115JAA HAS TO BE ALLOWED FIRST BE FORE WORKING OUT THE LIABILITY OF THE ASSESSEE TO PAY ADVANCE TAX AS HELD BY HON'BLE JURISDICTIONAL HIGH COURT IN THE ABOVE REFERRED CASE THE REFUND GRANTED TO THE ASSESSEE IS NOT OUT OF MAT CREDIT AVAILABLE TO THE ASSESSEE BUT IS OUT OF EXCE SS AMOUNT OF ADVANCE TAX PAID BY THE ASSESSEE. THERE IS NO DISPUTE ON THIS ASPECT THAT IF THE REFUND IS ON ACCOUNT OF EXCESS PAYMENT OF ADVANCE TAX INTEREST U/S 244A IS ALLOWABLE TO THE ASSESSEE AS PER CLAUSE (A) OF SUB SECTION (1) OF SE CTION 244A. REGARDING THE FIRST ASPECT AS TO WHETHER THE REFUND GIVEN TO THE ASSESS EE IS OUT OF MAT CREDIT OR OUT OF ADVANCE TAX WE ARE IN AGREEMENT WITH LD CIT(A) THAT AS PER THE JUDGMENT OF HON'BLE DELHI HIGH COURT RENDERED IN THE CASE OF JI NDAL EXPORTS LTD. (SUPRA) THE EFFECT OF MAT CREDIT U/S 115JAA HAS TO BE FIRST CON SIDERED AND THE ASSESSEE IS LIABLE TO PAY ONLY THE BALANCE AMOUNT AS ADVANCE TA X AND IF THE ASSESSEE PAID LESSER AMOUNT OF ADVANCE TAX AS COMPARED TO THIS AM OUNT OF ADVANCE TAX PAYABLE BY THE ASSESSEE AFTER CONSIDERING MAT CREDI T U/S 115JAA THE ASSESSEE . I.T.A. NO.4612/DEL/09 6/6 IS LIABLE TO PAY INTEREST U/S 234B & 234C AND IF SU CH PAYMENT OF ADVANCE TAX BY THE ASSESSEE IS IN EXCESS THEN THIS AMOUNT OF ADVAN CE TAX PAYABLE BY THE ASSESSEE THEN THE REFUND IS ON ACCOUNT OF EXCESS PA YMENT OF ADVANCE TAX WHICH IS ELIGIBLE FOR INTEREST U/S 244A. HENCE ON THIS A SPECT ALSO WE FIND NO REASON TO INTERFERE IN THE ORDER OF LD CIT(A). 8. IN THE RESULT THE APPEAL OF THE REVENUE IS DISM ISSED 9. ORDER PRONOUNCED IN THE OPEN COURT ON 19TH FEB RUARY 2010. SD/- SD/- (R.P. TOLANI) (A.K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER DT. 19.2.2010. HMS COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)- NEW DELHI. 5. THE DR ITAT LOKNAYAK BHAWAN KHAN MARKET NEW DELHI. TRUE COPY. BY ORDER (ITAT NEW DELHI).