Ita/245/2014 Of Hha Tank Terminal (P) Ltd v. The Assistant Commissioner Of Income Tax

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN & THE HONOURABLE MR. JUSTICE ASHOK MENON MONDAY ,THE 18TH DAY OF FEBRUARY 2019 / 29TH MAGHA, 1940 ITA.No. 245 of 2014 AGAINST THE ORDER/JUDGMENT IN ITA 61/COCH/2010 ofI.T.A.TRIBUNAL,COCHIN BENCH DATED 01.08.2014 APPELLANT/APPELLANT/ASSESSEE: HHA TANK TERMINAL (P) LTD.CC 24/1869, MURAF AREA, INDIRA GANDHI ROAD, WILLINGDON ISLAND, COCHIN-682 003. BY ADVS.SRI.JOSEPH MARKOSE (SR.)SRI.ABRAHAM JOSEPH MARKOSSRI.BINU MATHEWSRI.ISAAC THOMASSRI.NOBY THOMAS CYRIACSRI.TOM THOMAS (KAKKUZHIYIL)SRI.V.ABRAHAM MARKOS RESPONDENT/RESPONDENT/REVENUE: THE ASSISTANT COMMISSIONER OF INCOME TAXCIRCLE-1(2), ERNAKULAM, KOCHI-682 018. BY ADVS.SRI.JOSE JOSEPH, SC, FOR INCOME TAXSRI.P.K.R.MENON,SENIOR COUNSEL, GOI(TAXES) THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 18.02.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: K.VINOD CHANDRAN & ASHOK MENON, JJ. -------------------------------------------ITA No.245 of 2014 ------------------------------------------- Dated this the 18[th] day of February, 2019 J U D G M E N T Vinod Chandran, J. The questions of law arising in the above appealare the following:- (1) Whether the Income Tax Appellate Tribunalwas justified in having declined interest tothe assessee for the refund under Section244 of the Income Tax Act, 1961 (“Act” forshort) invoking sub-Section (2) of Section244A ? (2) Whether on the facts and in thecircumstances of the case, has not theTribunal understood the issue in the wrongperspective and is not the final decisionperverse insofar as the fact adjudication isconcerned ? 2.The issue arises in the assessment year2002-03. The original return of the assessee was filedon 29.10.2002 and a revised return on 22.03.2004. Theassessee was issued with an order dated 03.08.2006computing refund at Rs.34,53,882/-. There was nointerest computed under Section 244 and hence theassessee filed an application under Section 154, whichwas considered and Annexure-B order was passedcomputing the interest from 1.4.2002 to 31.10.2006, onwhich later date the entire refund was effected. 3.Subsequently, an assessment was completedunder Section 143(3) read with Section 147; which orderis produced as Annexure-C. The tax payable was as perSection 115JB (Minimum Alternate Tax) which exceededthe tax on the total income computed. The disputearose when a rectification was made under Section 154reducing the interest granted to the period between02.08.2006 to 31.10.2006 @ 0.5%. This rectificationorder produced as Annexure-D does not indicate as to why such a rectification was made. A representationwas filed by the assessee which was declined byAnnexure-E. The assessee then took up the matter inappeal, which was allowed as per Annexure-F findingthat the Assessing Officer (AO) did not have competenceto invoke Section 244A(2). Subsequent to that, on thebasis of the order issued by the Commissioner underSection 244A(2), Annexure-J order was passed. 4.The reason for reduction of interest was stated so in Annexure-J order: “a)Original return of income filed bythe assessee on 29.10.2002 was processedu/s 143(1) of the Act on 29.12.2002 andrefund thereon Rs.86,333/- was issued tothe assessee on time. b)Thereafter the revised return wasfiled on 22.03.2004 claiming a refund ofRs.1,71,76,655/-. To that extent atleast up to that date delay in grantingthe full refund is attributable to theassessee. c)Further the assessee has notfurnished Form No.29B (MAT computationstatement) as required u/s 115JB(4) alongwith the revised return but was filedonly on 02.08.2006. Thus it is evident that the delay in granting the refund isattributable to the assessee.” 4.The reason for reduction of interest was stated so in Annexure-J order: “a)Original return of income filed bythe assessee on 29.10.2002 was processedu/s 143(1) of the Act on 29.12.2002 andrefund thereon Rs.86,333/- was issued tothe assessee on time. b)Thereafter the revised return wasfiled on 22.03.2004 claiming a refund ofRs.1,71,76,655/-. To that extent atleast up to that date delay in grantingthe full refund is attributable to theassessee. c)Further the assessee has notfurnished Form No.29B (MAT computationstatement) as required u/s 115JB(4) alongwith the revised return but was filedonly on 02.08.2006. Thus it is evident that the delay in granting the refund isattributable to the assessee.” 5.Interest was found to be running only from02.08.2006 since Form-29B (MAT computation statement)as required under Section 115JB(4) was filed on02.08.2006. Later in the order it was found that suchstatement was filed on 07.09.2006. It was hence thatAnnexure-J confined the interest @ 0.5% between08.09.2006 to 31.10.2006. The first appeal and thesecond appeal before the Tribunal went against theassessee and hence the assessee is before us raisingthe aforesaid questions of law. 6.Sri.Joseph Markos, learned Senior Counsel forthe assessee, would contend that there is no questionof any delay attributable to the assessee, since theMAT under Section 115JB has to be computed by the AO asavailable from the books of accounts, the profit andloss statement and the returns produced before the AO.Hence, the filing of a statement under Form-29B is notat all significant for determining MAT or processing -6- the refund under Section 143(1). It is alsospecifically pointed out that the subsequent assessmentorder under Section 143 (3) read with Section 147 madeno modification to the original assessment ascarried out under Section 143(1). 7.The learned Standing Counsel, Government ofIndia (Taxes), Sri.Jose Joseph, on the contrary, wouldcontend that there is no assessment as such carried outunder Section 143(1). The verification does notnecessarily lead to determination of the total incomeor the tax payable and the same can only be said tohave been crystallised by an order under Section143(3). Section 115JB also by sub-Section (4) theretospecifically prescribes a statement to be filed by theaccountant which is in Form-29B along with the return.The delay in filing Form-29B hence has occasioned thedelay in refund also. The delay in refund beingattributable to the assessee, there cannot be anyinterest during the period of delay. -7- 8.The assessee has relied on (2012) 340 ITR 574 (Ker) [Commissioner of Income Tax v. South Indian Bank Ltd.]. Therein the assessee had not made a claim, inthe return, for provision made for bad debts underSection 36(1)(vii)(a). In the course of the assessmentproceedings, the assessee made a claim, which wasdeclined by the AO. In first appeal, the same wasallowed and while granting refund, the CIT declinedinterest up to 10.01.2001, the date on which theassessee had raised a claim for bad debts before the AOin the course of the assessment proceedings. ADivision Bench of this Court found that there is noprovision in the Act which restricts the interest up tothe time when a deduction is claimed, which is notoriginally claimed in the return. It was hence theassessee therein was granted full interest ascomputable under Section 244. 9.In the present case, the assessee had filedForum-29B only on 07.09.2006. However, the question is 9.In the present case, the assessee had filedForum-29B only on 07.09.2006. However, the question is as to whether in carrying out verification underSection 143(1) and processing the refund, the existenceof Form-29B is essential or not. In the present case,though Form-29B was filed only on 07.09.2006, it isseen that an intimation under Section 143(1) wasissued before that on 20.07.2003. A refund was alsoissued computing the tax payable under Section 115JB on03.08.2006. Hence, it is very clear that the filing ofForm-29B was not at all required for processing thereturn and granting the refund which had been doneprior to such filing of statement in Form- 29B. Hence,the date of filing of Form-29B cannot at all berelevant for attributing delay on the part of theassessee for processing of refund. 10.Now, the question arises as to clause (b) aswe extracted from the impugned order hereinabove.Admittedly, the assessee had filed the original returnon 29.10.2002, which was processed and a refund ofRs.86,333/- issued on 15.05.2003. Subsequently, -9- revised return was filed on 22.03.2004 claiming arefund of Rs.1,71,76,655/-. Hence, necessarily, therefund as now ordered by the AO can only relate back tothe date of filing of the revised return. The delay inclaiming the enhanced refund can only be attributableto the assessee and the same was claimed by a revisedreturn only on 22.03.2004. Hence for an amount ofRs.1,70,90,322/-, the interest can be computed onlyfrom 22.03.2004. 11.We hence answer the questions partly in favourof the assessee and partly in favour of the Revenue.We do not think that the orders of the lowerauthorities restricting the interest till 08.09.2006can be upheld. We have already found that Form-29B isnot at all significant for processing of the return asis seen from the facts of the case which indicate thatsuch processing having been done far earlier to thefiling of such statement. As to the delay attributableto the assessee, we have found that the claim for interest can arise only from the date of revisedreturn, i.e. 22.03.2004. The AO shall make suchmodifications as directed herein and grant interest tothe assessee from the date specified by us.The Income Tax Appeal is partly allowed. No orderas to costs. Sd/- K.VINOD CHANDRAN JUDGE Sd/- ASHOK MENONJUDGE ITA 245/14 APPENDIX APPELLANT'S EXHIBITS: ANNEXURE -ATRUE COPY OF THE INTIMATION UNDER SECTION 143(1) OF THE ACT ISSUED ON 20-7-2006 BY THE RESPONDENT.SECTION 143(1) OF THE ACT ISSUED ON 20-7-2006 BY THE RESPONDENT. ANNEXURE -BTRUE COPY OF ORDER DATED 21-11-2006 ISSUED BY THE RESPONDENT.ISSUED BY THE RESPONDENT. ANNEXURE -CTRUE COPY OF ASSESSMENT ORDER DATED 29-11-2006 ISSUED BY THE RESPONDENT.11-2006 ISSUED BY THE RESPONDENT. ANNEXURE -DTRUE COPY OF ORDER DATED 16-2-2007 ISSUED BY THE RESPONDENT.ISSUED BY THE RESPONDENT. ANNEXURE - E TRUE COPY OF ORDER DATED 22-5-2007 ISSUED BY THE RESPONDENT.ISSUED BY THE RESPONDENT. ANNEXURE - F TRUE COPY OF APPELLATE ORDER DATED 6-6-2007 PASSED BY THE COMMISSIONER OF INCOME TAX(APPEALS), COCHIN.2007 PASSED BY THE COMMISSIONER OF INCOME TAX(APPEALS), COCHIN. ANNEXURE - G TRUE COPY OF ORDER DATED 17-9-2007 ISSUED BY THE RESPONDENT.ISSUED BY THE RESPONDENT. ANNEXURE - HTRUE COPY OF NOTICE DATED 26-11-2007 ISSUED BY THE RESPONDENT.ISSUED BY THE RESPONDENT. ANNEXURE - I TRUE COPY OF OBJECTION DATED 30-11-2007TO THE NOTICE UNDER SECTION 154 FILED BY THE APPELLANT.TO THE NOTICE UNDER SECTION 154 FILED BY THE APPELLANT. ANNEXURE - JTRUE COPY OF ORDER DATED 6-12-2007 ISSUED BY THE RESPONDENT.ISSUED BY THE RESPONDENT. ITA 245/14 ANNEXURE - K ANNEXURE - L ANNEXURE - M ANNEXURE - N ANNEXURE - O jg TRUE COPY OF APPELLATE ORDER DATED 30-11-2009 ISSUED BY THE COMMISSIONER OF INCOME TAX(APPEALS)-II, COCHIN. ANNEXURE - G TRUE COPY OF ORDER DATED 17-9-2007 ISSUED BY THE RESPONDENT.ISSUED BY THE RESPONDENT. ANNEXURE - HTRUE COPY OF NOTICE DATED 26-11-2007 ISSUED BY THE RESPONDENT.ISSUED BY THE RESPONDENT. ANNEXURE - I TRUE COPY OF OBJECTION DATED 30-11-2007TO THE NOTICE UNDER SECTION 154 FILED BY THE APPELLANT.TO THE NOTICE UNDER SECTION 154 FILED BY THE APPELLANT. ANNEXURE - JTRUE COPY OF ORDER DATED 6-12-2007 ISSUED BY THE RESPONDENT.ISSUED BY THE RESPONDENT. ITA 245/14 ANNEXURE - K ANNEXURE - L ANNEXURE - M ANNEXURE - N ANNEXURE - O jg TRUE COPY OF APPELLATE ORDER DATED 30-11-2009 ISSUED BY THE COMMISSIONER OF INCOME TAX(APPEALS)-II, COCHIN. TRUE COPY OF SECOND APPEAL I.T.A. NO. 61/COCH/2010 DATED 15-1-2010 FILED BY THE APPELLANT BEFORE THE INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH. TRUE COPY OF ORDER DATED 21-10-2011 ISSUED BY THE INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH IN I.T.A. NO.61/COCH/2010. TRUE COPY OF JUDGMENT DATED 03-4-2014 PASSED BY THIS HONOURABLE COURT IN I.T.A.NO.31/2012 FILED BY THE APPELLANT. CERTIFIED COPY OF IMPUGNED ORDER DATED 01-08-2014 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH IN I.T.A.NO.61/COCH/2010 (WRONGLY TYPED ASI.T.A.NO.61/COCH/2014) FILED BY THE APPELLANT. [True Copy]