Ita/1590/2009 Of The Commissioner Of Income Tax v. State Bank Of Travancore

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT:- THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN & THE HONOURABLE MR. JUSTICE ASHOK MENON THURSDAY, THE 01ST DAY OF NOVEMBER 2018 / 10TH KARTHIKA, 1940 I.T.A.No.1054 of 2009 AGAINST THE ORDER IN I.T.A.NO.25/COCH/2002 DATED 21-07-2006 OF THE INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH, COCHIN APPELLANT/APPELLANT: THE COMMISSIONER OF INCOME TAX,TRIVANDRUM. BY SRI.JOSE JOSEPH, STANDING COUNSEL FOR GOI (TAXES) RESPONDENT/RESPONDENT: STATE BANK OF TRAVANCORE,POOJAPURA, TRIVANDRUM. BY ADV. SRI.P.BALAKRISHNAN (E) THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 01.11.2018, ALONG WITH ITA.1590/2009, ITA.1427/2009, ITA.1398/2009, ITA.1574/2009, ITA.1317/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ITA.1398/2009, ITA.1574/2009, ITA.1317/2009, THE COURT ON IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT:- THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN & THE HONOURABLE MR. JUSTICE ASHOK MENON THURSDAY, THE 01ST DAY OF NOVEMBER 2018 / 10TH KARTHIKA, 1940 I.T.A.No.1590 of 2009 AGAINST THE ORDER IN I.T.A.NO.13/COCH/2002 DATED 21-07-2006 OF THE INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH, COCHIN APPELLANT/APPELLANT: THE COMMISSIONER OF INCOME TAXTHIRUVANANTHAPURAM. BY ADVS.SRI.P.K.R.MENON, SENIOR COUNSEL, GOI (TAXES)SRI.JOSE JOSEPH, STANDING COUNSEL FOR GOI (TAXES) RESPONDENT/RESPONDENT: STATE BANK OF TRAVANCORE,POOJAPPURA, THIRUVANANTHAPURAM. BY ADV. SRI.P.BALAKRISHNAN (E) THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 01.11.2018, ALONG WITH ITA.1427/2009, ITA.1398/2009, ITA.1574/2009, ITA.1317/2009, ITA.1054/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: - 3 - IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT:- THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN & THE HONOURABLE MR. JUSTICE ASHOK MENON THURSDAY, THE 01ST DAY OF NOVEMBER 2018 / 10TH KARTHIKA, 1940 I.T.A.No.1427 of 2009 AGAINST THE ORDER IN I.T.A.NO.14/COCH/2002 DATED 21-07-2006 OF THE INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH, COCHIN APPELLANT/APPELLANT: THE COMMISSIONER OF INCOME TAX, TRIVANDRUM BY SRI.JOSE JOSEPH, STANDING COUNSEL FOR GOI (TAXES) RESPONDENT/RESPONDENT: STATE BANK OF TRAVANCORE,POOJAPPURA, TRIVANDRUM. BY ADV. SRI.P.BALAKRISHNAN (E) THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 01.11.2018, ALONG WITH ITA.1590/2009, ITA.1398/2009, ITA.1574/2009, ITA.1317/2009, ITA.1054/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT:- THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN & THE HONOURABLE MR. JUSTICE ASHOK MENON THURSDAY, THE 01ST DAY OF NOVEMBER 2018 / 10TH KARTHIKA, 1940I.T.A.No.1398 of 2009 AGAINST THE ORDER IN I.T.A.NO.1189/COCH/2004 DATED 21-07-2006 OF THE INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH, COCHIN APPELLANT/APPELLANT: COMMISSIONER OF INCOME TAX,TRIVANDRUM. BY ADVS.SRI.P.K.R.MENON, SENIOR COUNSEL, GOI(TAXES)SRI.JOSE JOSEPH, STANDING COUNSEL FOR GOI (TAXES) RESPONDENT/RESPONDENT: STATE BANK OF TRAVANCORE,POOJAPURA, TRIAVANDRUM. BY ADV. SRI.P.BALAKRISHNAN (E) THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 01.11.2018, ALONG WITH ITA.1590/2009, ITA.1427/2009, ITA.1574/2009, ITA.1317/2009, ITA.1054/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ITA.1574/2009, ITA.1317/2009, ITA.1054/2009, THE COURT ON IN THE HIGH COURT OF KERALA AT ERNAKULAMPRESENT:- THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN & THE HONOURABLE MR. JUSTICE ASHOK MENON THURSDAY, THE 01ST DAY OF NOVEMBER 2018 / 10TH KARTHIKA, 1940I.T.A.No.1574 of 2009 AGAINST THE ORDER IN I.T.A.NO.1187/COCH/2004 DATED 21-07-2006 OF THE INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH, COCHIN APPELLANT/APPELLANT: THE COMMISSIONER OF INCOME TAX,TRIVANDRUM. BY ADVS. STATE BANK OF TRAVANCORE,POOJAPURA, TRIAVANDRUM. BY ADV. SRI.P.BALAKRISHNAN (E) THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 01.11.2018, ALONG WITH ITA.1590/2009, ITA.1427/2009, ITA.1574/2009, ITA.1317/2009, ITA.1054/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ITA.1574/2009, ITA.1317/2009, ITA.1054/2009, THE COURT ON IN THE HIGH COURT OF KERALA AT ERNAKULAMPRESENT:- THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN & THE HONOURABLE MR. JUSTICE ASHOK MENON THURSDAY, THE 01ST DAY OF NOVEMBER 2018 / 10TH KARTHIKA, 1940I.T.A.No.1574 of 2009 AGAINST THE ORDER IN I.T.A.NO.1187/COCH/2004 DATED 21-07-2006 OF THE INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH, COCHIN APPELLANT/APPELLANT: THE COMMISSIONER OF INCOME TAX,TRIVANDRUM. BY ADVS. SRI.P.K.R.MENON,SR.COUNSEL, GOI(TAXES)SRI.JOSE JOSEPH, STANDING COUNSEL FOR GOI(TAXES) RESPONDENT/RESPONDENT: STATE BANK OF TRAVANCORE,POOJAPPURA,TRIVANDRUM BY ADV. SRI.P.BALAKRISHNAN (E) THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 01.11.2018, ALONG WITH ITA.1590/2009, ITA.1427/2009, ITA.1398/2009, ITA.1317/2009, ITA.1054/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT:- THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN & THE HONOURABLE MR. JUSTICE ASHOK MENON THURSDAY, THE 01ST DAY OF NOVEMBER 2018 / 10TH KARTHIKA, 1940 I.T.A.No.1317 of 2009 AGAINST THE ORDER IN I.T.A.NO.1191/COCH/2004 DATED 21-07-2006 OF THE INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH, COCHIN APPELLANT/APPELLANT: THE COMMISSIONER OF INCOME-TAX,TRIVANDRUM. BY ADVS.SRI.P.K.R.MENON,SR.COUNSEL, GOI(TAXES)SRI.JOSE JOSEPH, STANDING COUNSEL FOR GOI (TAXES) RESPONDENT/RESPONDENT: STATE BANK OF TRAVANCORE,POOJAPURA, TRIVANDRUM. BY ADV. SRI.P.BALAKRISHNAN (E) THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 01.11.2018, ALONG WITH ITA.1590/2009, ITA.1427/2009, ITA.1398/2009, ITA.1574/2009, ITA.1054/2009, THE COURT ONTHE SAME DAY DELIVERED THE FOLLOWING: JUDGMENT [ ITA 1054/2009, ITA.1590/2009, ITA.1427/2009,ITA.1398/2009, ITA.1574/2009 & ITA.1317/2009 ] Vinod Chandran,J. The assessee-respondent in these cases is the StateBank of Travancore, which is now amalgamated with the StateBank of India. The question raised is as to whether theTribunal was correct in having granted interest on interestwith respect to the refund for the various periods. TheTribunal had granted the same on the basis of the decision inSandvik Asia Ltd.v. CIT[(2006) 280 ITR 643 (SC)]. The saidtwo-Judge decision was clarified by a later three-Judge Bench-in Commissioner of Incometax v. Gujarat Fluoro Chemicals[(2013) 358 ITR 291 (SC)]. 2. The admitted facts, for the assessment years1989-90, 1990-91, 1991-92, 1995-96, 1997-98 and 2001-02,which are identical sans the dates; are the following. Theassessments were completed and there were variousproceedings, including rectification, appeals, revision andso on and so forth. When the statutory proceedings werecompleted, there was a refund due to the assessee in allthese years. The refund was made with interest. The assessee connected cases claimed interest on interest, which the Tribunal permitted as per the afore-cited decision. 3. We need only extract the following paragraph fromGujarat Fluoro Chemicals(supra): “7. As we have already noticed, in Sandvikcase(supra) this court was considering the issuewhether an assessee who is made to wait for refundof interest for decades be compensated for thegreat prejudice caused to it due to the delay inits payment after the lapse of statutory period. Inthe facts of that case, this court had come to theconclusion that there was an inordinate delay onthe part of the Revenue in refunding certain amountwhich included the statutory interest and,therefore, directed the Revenue to pay compensationfor the same not an interest on interest”. connected cases claimed interest on interest, which the Tribunal permitted as per the afore-cited decision. 3. We need only extract the following paragraph fromGujarat Fluoro Chemicals(supra): “7. As we have already noticed, in Sandvikcase(supra) this court was considering the issuewhether an assessee who is made to wait for refundof interest for decades be compensated for thegreat prejudice caused to it due to the delay inits payment after the lapse of statutory period. Inthe facts of that case, this court had come to theconclusion that there was an inordinate delay onthe part of the Revenue in refunding certain amountwhich included the statutory interest and,therefore, directed the Revenue to pay compensationfor the same not an interest on interest”. The clarification has put it in the proper perspective andthe facts in the present case do not commend such a drasticmeasure of interest on interest. We, hence, allow the appealsand set aside the order of the Tribunal on the sole issue ofgrant of interest on interest on the refunds and answer thequestion of law in favour of the Revenue and against theassessee, following the decision in Gujarat Fluoro Chemicals(supra). Ordered accordingly. Parties are left to suffer their respective costs. Sd/-K.VINOD CHANDRANJUDGE Vku/- Sd/-ASHOK MENONJUDGE APPENDIX OF ITA 1054/2009 APPELLANT'S ANNEXURES: ANNEXURE-A TRUE COPY OF THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) DATED 28/11/2001. ANNEXURE-B TRUE COPY OF THE ORDER OF THE INCOME TAX APPELLATE TRIBUNAL DATED 21/7/2006. APPENDIX OF ITA 1590/2009 APPELLANT'S ANNEXURES: ANNEXURE-A TRUE COPY OF THE ORDER OF THE ASSESSING OFFICER DATED 14/5/97. ANNEXURE-B TRUE COPY OF THE ORDER OF THE CIT(A) DATED 28/11/2001 ANNEXURE-C TRUE COPY OF THE ORDER OF THE INCOME TAX APPELLATE TRIBUNAL DATED 21/7/2006. APPENDIX OF ITA 1427/2009 APPELLANT'S ANNEXURES: ANNEXURE-A TRUE COPY OF THE ORDER OF THE ASSESSING OFFICER DATED 31/3/2000 ANNEXURE-B TRUE COPY OF THE ORDER OF THE CIT (A) DATED 28/11/2001 ANNEXURE-C TRUE COPY OF THE ORDER OF THE INCOME TAX APPELLATE TRIBUNAL DATED 21/7/2006. APPENDIX OF ITA 1398/2009 APPELLANT'S ANNEXURES: ANNEXURE A TRUE COPY OF THE ORDER OF THE ASSESSING OFFICER DATED 26.3.2002. ANNEXURE B TRUE COPY OF THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) DATED 10.8.2004. ANNEXURE C TRUE COPY OF THE ORDER OF THE INCOME TAX APPELLATE TRIBUNAL DATED 21.7.2006 connected cases APPENDIX OF ITA 1574/2009 APPELLANT'S ANNEXURES: ANNEXURE A TRUE COPY OF THE ORDER OF THE ASSESSING OFFICER DATED 26.3.2004. ANNEXURE B TRUE COPY OF THE ORDER OF THE CIT (A) DATED 10.8.2004. ANNEXURE C TRUE COPY OF THE ORDER OF THE GNOME TAX APPELLATE TRIBUNAL DATED 21.7.206. connected cases APPENDIX OF ITA 1317/2009 APPELLANT'S ANNEXURES: ANNEXURE-A TRUE COPY OF THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) DATED 10/8/2004. ANNEXURE-BTRUE COPY OF THE ORDER OF THE INCOME TAX APPELLATE TRIBUNAL DATED 21/7/2006.