Commissioner Of Income Tax, Alwar v. M/S Gillettee India Ltd. (Formerly Indian Shaving Products Ltd.), Spa-65A, Industrial Area, Bhiwadi, Distt. Alwar

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH ATJAIPUR D.B. Income Tax Appeal No. 367 / 2005 Commissioner of Income Tax, Alwar. ----Appellant Versus M/S Gillettee India Ltd. (Formerly Indian Shaving Products Ltd.), SPA-65A, Industrial Area, Bhiwadi, Distt. Alwar. ----Respondent _____________________________________________________ For Appellant(s) : Mrs. Parinitoo Jain. For Respondent(s) : Mr. Sanjay Jhanwar. _____________________________________________________ HON'BLE MR. JUSTICE K.S. JHAVERI HON'BLE MR. JUSTICE VINIT KUMAR MATHURJudgment Per Hon’ble Jhaveri J. 31/01/2017 1.By way this appeal, the department has challenged thejudgment and order of the Tribunal whereby the Tribunal hasallowed the appeal preferred by the assessee partially reversingthe benefits granted by the CIT(A) and Assessing Officer. 2.Counsel for the appellant Mrs. Jain has contended that theTribunal has seriously committed an error in ignoring theprovisions of law and has wrongly allowed the appeal. 3.This Court while admitted the appeal on 02.01.2006 hasframed the following substantial questions of law: “1.Whether the findings of the Tribunalare perverse in deleting the addition ofRs.15,92,770/- made on account ofinterest under Section 234A?are perverse in deleting the addition ofRs.15,92,770/- made on account ofinterest under Section 234A? 2.Whether the findings of the Tribunalare perverse in deleting the addition of 4.The facts of the case are that the assessee company hasfiled its return of income on 30[th] December, 1992, declaring a lossof Rs.6,56,67,350/- after making various adjustments. Theassessee company has also claimed the exchange loss on foreigncurrency of Rs.2,88,91,067/-. The return was accompanied withcertified printed copies of balance-sheet, profit & loss account andits various schedules and also a copy of Tax Audit Report in Formof total income. The assessee company, subsequently, has alsofiled a revised return on 01.11.1993, declaring a loss ofRs.6,39,27,576/-. In revising the return, the assessee hasreduced the depreciation of amalgamating company Sharp EdgeLimited from Rs.88,84,393/- to Rs.86,16,369/- and correctedother mistakes in calculation by the assessee company. The casewas already stood selected for scrutiny by issuance of a notice u/s143(2) dated 24.02.1993 fixing hearing for 17.03.1993. Thereturn was processed u/s 143(1)(a) on 24.02.1993. 5.Counsel for the appellant has taken us to the order ofAssessing Officer, CIT(A) and the Tribunal and contended that theTribunal has seriously committed an error and misconstrued theprovisions of law and therefore, the appeal deserves to beallowed. 6.On the other hand Mr. Jhanwar counsel for the assessee haspointed out the provisions of Section 234A of the Income Tax Act,can be invoked only on the following contingency. “Interest for defaults in furnishingreturn of income. 234A. (1) Where the return of income forany assessment year under sub-section (1)or sub-section (4) of section 139, or inresponse to a notice under sub-section (1)of section 142, is furnished after the duedate, or is not furnished, the assessee shallbe liable to pay simple interest at the rateof one per cent for every month or part of amonth comprised in the period commencingon the date immediately following the duedate, and,— (a) where the return is furnished after thedue date, ending on the date of furnishingof the return; or (b) where no return has been furnished,ending on the date of completion of theassessment under section 144, on the amount of the tax on the totalincome as determined under sub-section(1) of section 143, and where a regularassessment is made, on the amount of thetax on the total income determined underregular assessment, as reduced by theamount of,— (i) advance tax, if any, paid; (a) where the return is furnished after thedue date, ending on the date of furnishingof the return; or (b) where no return has been furnished,ending on the date of completion of theassessment under section 144, on the amount of the tax on the totalincome as determined under sub-section(1) of section 143, and where a regularassessment is made, on the amount of thetax on the total income determined underregular assessment, as reduced by theamount of,— (i) advance tax, if any, paid; (ii) any tax deducted or collected atsource; (iii) any relief of tax allowed under section90 on account of tax paid in a countryoutside India; (iv) any relief of tax allowed under section90Aon account of tax paid in a specifiedterritory outside India referred to in thatsection; (v) any deduction, from the Indian income-tax payable, allowed under section 91, onaccount of tax paid in a country outsideIndia; and (vi) any tax credit allowed to be set off inaccordance with the provisions of section115JAAor section 115JD. Explanation 1.—In this section, "due date"means the date specified in sub-section (1)of section 139as applicable in the case ofthe assessee. Explanation 2.—In this sub-section, "tax onthe total income as determined under sub-section (1) of section 143" shall not includethe additional income-tax, if any, payable under section 143. Explanation 3.—Where, in relation to anassessment year, an assessment is madefor the first time under section 147orsection 153A, the assessment so made shallbe regarded as a regular assessment forthe purposes of this section. Explanation 4.—[* * *] (2) The interest payable under sub-section(1) shall be reduced by the interest, if any,paid under section 140Atowards theinterest chargeable under this section. (3) Where the return of income for anyassessment year, required by a notice undersection 148 or section 153A issued after thedetermination of income under sub-section(1) of section 143or after the completion ofan assessment under sub-section (3) ofsection 143or section 144or section 147,is furnished after the expiry of the timeallowed under such notice, or is notfurnished, the assessee shall be liable topay simple interest at the rate of one percent for every month or part of a monthcomprised in the period commencing on theday immediately following the expiry of thetime allowed as aforesaid, and,— (a) where the return is furnished after theexpiry of the time aforesaid, ending on thedate of furnishing the return; or (b) where no return has been furnished,ending on the date of completion of thereassessment or recomputation undersection 147 or reassessment under section153A, on the amount by which the tax onthe total income determined on the basis ofsuch reassessment or recomputationexceeds the tax on the total incomedetermined under sub-section (1) of section143or on the basis of the earlierassessment aforesaid. Explanation.—[* * *] (4) Where as a result of an order undersection 154or section 155or section 250orsection 254or section 260or section 262orsection 263or section 264or an order ofthe Settlement Commission under sub-section (4) of section 245D, the amount oftax on which interest was payable undersub-section (1) or sub-section (3) of thissection has been increased or reduced, asthe case may be, the interest shall be increased or reduced accordingly, and— (i) in a case where the interest isincreased, the Assessing Officer shall serveon the assessee a notice of demand in theprescribed form specifying the sum payable,and such notice of demand shall be deemedto be a notice under section 156and theprovisions of this Act shall applyaccordingly; (ii) in a case where the interest is reduced,the excess interest paid, if any, shall berefunded. increased or reduced accordingly, and— (i) in a case where the interest isincreased, the Assessing Officer shall serveon the assessee a notice of demand in theprescribed form specifying the sum payable,and such notice of demand shall be deemedto be a notice under section 156and theprovisions of this Act shall applyaccordingly; (ii) in a case where the interest is reduced,the excess interest paid, if any, shall berefunded. (5) The provisions of this section shall applyin respect of assessments for theassessment year commencing on the 1stday of April, 1989 and subsequentassessment years.” 7.The revised return was filed and the provisions of Section234A of the Income Tax Act, have wrongly been invoked. Theprovisions of Section 234D have also been wrongly invoked. 8.We have heard counsel for both the sides. 9.We gone through the order of the CIT(A) and the CIT(A)while considering the case of the assessee has considered theprovisions of Section 220(2) and 234 of the Act and has rightlyobserved as under: “(ii) In regard to charging of interest u/s220(2) and 143(4) of the Income Tax Act ithas been pleaded that the AO made amistake in his order U/s 154 of the IncomeTax Act dated 2-5-1995 by charginginterest under these provisions from thedate of granting of original refund u/s143(1)(a) of the Income Tax Act. Nointerest u/s. 220(2) of the Income Tax Actand 143(4) of the Income Tax Act ischargeable on the refund granted u/s143(1)(a) of the Income Tax Act becausethe interest is chargeable only on thedemand raised u/s 156 of the Income TaxAct and not paid within the prescribedperiod. It was pleaded therefore that theAO should be directed to delete this interest charged u/s. 220(2) vais 143(4) ofthe Income Tax Act. (iii) I have considered the arguments ofthe appellant and the facts of the case. Asper the provisions of Section 143(4) of theIncome Tax Act if any amount is refundedu/s 143(1) of the Income Tax Act then atthe time of passing of regular assessmentthe amounts so refunded is deemed tobecome tax payable and if the amountrefunded u/s 143(1) exceeds the amountrefundable on regular assessment then theinterest u/s 220(2) of the Income Tax Actis to be charged from the date of grantingof the refund. Therefore, the interest u/s220(2) read with section 143(4) has beencorrectly charged by the AO and the AOwas justified in holding that there is nomistake apparent from the record whichrequired to be renewed. The order of theAO on this issue is therefore, confirmed.” 10.In that view of the matter, both the issues are answered infavour of the assessee and against the department. 11.The appeal stands dismissed. (VINIT KUMAR MATHUR)J. (K.S. JHAVERI)J. Asheesh Kr. Yadav/18