Itta/27/2009 Of Smt. Srikantadevi Baldwa v. Commissioner Of Income Tax And Anr

IN THE HIGH COURT FOR THE STATE OF TELANGANAAT HYDERABAD MONDAY, THE TWENTY THIRD DAY OF DECEMBERTWO THOUSAND AND TWENTY FOUR PRESENT THE HONOURABLE THE CHIEF JUSTICE ALOK ARADHEANDTHE HONOURABLE SRI JUSTICE J SREENIVAS RAO INCOME TAX TRIBUNAL APPEAL NO: 27 OF 2009 Appeal filed under Section 2604 of the lncome Tax Act, 1961 against theorder^dated 26.09.2008 passed in l.T.A No. 2tTtHydl1l for the Assessrient year1993-94 on the file of the lncome Tax Appellate Tri6unal, Hyderabad Benches [,,A,,,]9$.9.-Iv_dgtq!1d [prgler1g{ against the ][oider ][dated ][13.12i0o7 ][passed ][in ][tTA.No.]9$.9.-Iv_dgtq!1d [prgler1g{ against the ][oider ][dated ][13.12i0o7 ][passed ][in ][tTA.No.]404/lro-5(3)iclr(A)-vl2006-07 on the file of the conimissiondr of lncome Tax(A^ppe.als) PAN No. ACYPB " ^V_{VgqtqO_ad 0286D/1993-94 [preferred ]on [against ]the fite of the [the ][Order ]tncome [dated ]Tax [15.09.2006 ]Officer, Ward-5(3),[passed ][in]Hyderabad.(A^ppe.als) PAN No. ACYPB " ^V_{VgqtqO_ad 0286D/1993-94 [preferred ]on [against ]the fite of the [the ][Order ]tncome [dated ]Tax [15.09.2006 ]Officer, Ward-5(3),[passed ][in]Hyderabad. Between: Smt. Srikantadevi Baldwa, W/o Ramkrishna Baldwa, aged about 70 years, Occ:Business 5-8-352, Chirag Ali Lane, Abids, Hyderabad ...APPELLANT AND ' 1- Commissioner of lncome-Tax, Andhra pradesh-lV, Hyderabad. AayakarBhavan, Basheerbagh, Hyderabad.Bhavan, Basheerbagh, Hyderabad. 2. lncome Tax Officer, Ward-S [3], Aayakar Bhavan, Basheerbagh, Hyderabad. ...RESPONDENTS Counsel for the Appellant: Mr.Siddarth Toshnival, Learned Counsel repMr. K.L.RATHI, Learned CounselMr. K.L.RATHI, Learned Counsel Counsel for the Respondents: Sri. J V PRASAD (Senior Standing Counsel ForIncome-Tax) The Court delivered the following: JUDGMENT THE HON'BLE THE CHIEF WSTICE ALOK ARADHEANDTHE HON'BLE SRI JUSTICE J.SREENIVAS RAO I.T.T.A. No.27 of 2OO9 JUDGMENT : [(Per ]the Hon'bte Sn Justice J.Sreeniuos [Rao)] Mr. Sid<lharth Toshnival, learned counsel appea-rs [for]Mr.K.L. Rathi. Iearned counsel for the appellant/ assessee Mr. J.V. Prasad, learned Senior Standing Coutnsel [for]Income Tax Department for the respondents 2. This appeal under Section 260A of the Income Tax Act,1961 (hereinaJter referred to as "the Act") has been filed bythe assessee. The subject matter of the appeal pertains toassessment year 1993-94. The appeal was admitterl on thefollowing substantial question of law: "Whether the order dated 15.09.2006 passed bythe Assr:ssing Officer under Section 220(2\ of tlneIncome l'ax Act, 1961, is barred by limitation?" 3. Brief facts of the case: 3.1 Facts giving rise to filing of this appea-l briefly sl.ated arethat the assessee filed returns for the assessment year 1993-94 and the Income Tax Officer, Ward-1(9), Hyderaba<l passed order on 26.03.1996 under Section 143(3) of the Act on [a]total income of Rs.4,56,200/- and issued demand notice [for]Rs.2,99,8281- and thereafter demand notice and assessmbntorder were duly served on the assessee. Consequently, [an]order was passed by the Commissioner of Income Tax(Appeals)- 1, dated 28.08.1996. Thereupon another order waspassed on O2.O7.1997 by the Income Tax Officer, Ward-1(9),Hyderabad to give effect to the said appellate order. The totalincome of the assessee was revised at Rs.2,77,930/- and [the]consequential demand payable thereon was finallydetermined at Rs. 1,63, 153/- 3.1 Facts giving rise to filing of this appea-l briefly sl.ated arethat the assessee filed returns for the assessment year 1993-94 and the Income Tax Officer, Ward-1(9), Hyderaba<l passed order on 26.03.1996 under Section 143(3) of the Act on [a]total income of Rs.4,56,200/- and issued demand notice [for]Rs.2,99,8281- and thereafter demand notice and assessmbntorder were duly served on the assessee. Consequently, [an]order was passed by the Commissioner of Income Tax(Appeals)- 1, dated 28.08.1996. Thereupon another order waspassed on O2.O7.1997 by the Income Tax Officer, Ward-1(9),Hyderabad to give effect to the said appellate order. The totalincome of the assessee was revised at Rs.2,77,930/- and [the]consequential demand payable thereon was finallydetermined at Rs. 1,63, 153/- 3.2 Accordingly, competent authority issued notice dated04.08.2006 directing the assessee to pay an amount [of]Rs.1,63,153/- after adjusting the amount of taxes [paid]Rs.86,862/- and Rs.S,OOO/- in respect of the amounts [paid]towards penalties levied under Section 27l(ll(cl and 271(1)(b)of the Act respectively inclusive of the interest [payable ][under]Section 220(21 of the Act as on that date. Thereupon, [the]assessee submitted petition on l7.Oa.2OO6 for [granting]refund due on account of the penalty paid. The Income [Tax]Officer after considering the representation submitted by the ' [-- ].:".LY,"'.-..!r',' *t{ J7'\ assessee has [pa.ssed ]the [order holding ][that the ][assessee has]not paid the tax of Rs. 1,63,153/- [within ][the ][stipuiated ][time]allowed. under fiection 156 [of ][the ][Act i.e., ][within ][30 ][da1's ][from]the date of service of demand [notice ][and ][assessmenl ][order]and charged .nterest [invoking ][the ][provisions ][of ][Section]220(21 of the Act [through ][order ][dated ][15.09.2006']Thereupon, the assessee frled [application ][on ][03.1 ][l.2006]before the Income Tax Officer [for ][rectification ][of ][the ][order]dated 15.09.2006. The [Income Tax Officer rejected ][the ][said]application through his order [dated ][14.O2.2007.]3.3 Aggrieved by the said order, the [assessee ][filed ][appeal]beibre the Clommissioner of [Income ][Tax ][(Appr:a1s)-V,]Hyderabad and tLre Commissioner [dismissed ][the ][appeal]confirming the order of t-he [Income Tax ][Officer by order ][dated]13.12.2007 . Thereupon, the [assessee ][filed further ][appeal]before the Income Tax Appellate [Tribunal ][(hereinafter ][referred]to as "the Tribunal") and the Tribunal dismissed [the ][appeal]and confirmed the order of the Commissioner by [its ][order]dated 26.09.2008 holding that the provisions of Section [154]of the Act ure.not applicable and the Assessing Officer has rightly invoked the provisions of Section 220(21 of the Act.Thus, the assessee hled the present appeal. 4. Learned counsel for the assessee submitted that theAssessing Oflicer levied interest under Section 220(21 oi theAct after expiry of four years from the date of assessment andas per Section 154 of the Act, the Assessing Officer cannotlevy interest after four years. It is submitted that the assesseehas specifically raised the ground of limitation before theCommissioner of Income Tax (Appeals)-V, Hyderabad and theTribunal. Both the authorities without properly consideringthe same, simply confirmed the order of the Assessing Officerand the same is contrary to 1aw. In support of hiscontention, learned counsel for the assessee relied upon thejudgments in i! Nawab Mir Barkat Ali Khan Bahadur v.Assistant Controller of Estate Dutyr; iif Commissioner ofIncome-Tax v. U.B. Electronic Instruments Limited2;iiil Commissioner of Income-Tax (TDS) v. AnagramWellington Assets Management Company Limited3;ivf Director of Income-Tax (International Taxation) and ' 1tsea1 [zzz ][rrR ]672 [[(Ap)]] 1tsea1 [[(Ap)]], [201s] 371 rTR 314 (T&AP), [201s] 371 rTR 314 (T&AP) 3 [2O16] 389 ITR 6sa (Guj) ' 1tsea1 [zzz ][rrR ]672 [[(Ap)]] 1tsea1 [[(Ap)]], [201s] 371 rTR 314 (T&AP), [201s] 371 rTR 314 (T&AP) 3 [2O16] 389 ITR 6sa (Guj) another v. Executive Engineer, Bangalore Water Supplyand Sewerage Board v. Income-Tax Officer (InternationalTaxation)a; vf Ctix Capital Services Private Limited(formerly known as GE Money Financial Services PrivateLimited) v. .Ioint Commissioner of Incomu-1r*s; andvif Manik Chand Burman v. Income-Tax Offrcer6. 5.1 Per contra, learned Senior Standing Counsel submittedthat Section 1ii4 of the Act is applicable for only rectiltcationof assessment [,rrder ]and the same is not applicable to ,fo withlew of interest under Section 220(21 of the Act and theAssessing OlTicer levied interest through order dated15.09.2006 invoking the provisions of Section 220(2) of theAct. it is furthe.r submitted that the assessee filed applicationunder section 154 of the Act before the Assessing Officer forrectification of the said order. The said applicaticn wasrightly rejected bv the Income Tax Officer on 14.O2.2O()7. It isfurther submitted that the Commissioner of Appeals er,fterconsidering th<-. grounds raised by the assessee has rightlydismissed the rappeal on 13.l2.2OO7 alrd the said order was a 1zozo1 [+za ][rrR ][29.r(n$r)]s [,2023) ]459 ITR 47rl (Del)1zozo1 [+za ][rrR ][29.r(n$r)]s [,2023) ]459 ITR 47rl (Del)i' 119981 229 rTR 90 (A1l) confirmed by the Tribunal and there are no grounds tointerfere with the order passed b), the Tribunai. 5.2 It is contended that the provisions of Section 154 of theAct is only applicable for rectification of the error or mista_keand there is no mistake in the order and the AssessingOfficer exercising the powers conferred under the provisionsSection 220(2) of the Act rightly charged interest for thedelayed payment of tax by the assessee, as the assessee hasnot paid the tax for a period of more than six years. TheAssessing Officer has rightly charged the interest invokingthe provisions of Section 220(2) of the Act and there is nolimitation prescribed under the Act for charging interest. Insupport of his contention, he relied upon the decisions inif Bombay Gas Company Limited vs. Gopal Bhivaz;iif M/s.Hindustan Times Ltd. vs. Union of India andotherss and iiil Dr.Reddys Laboratories Limited,Hyderabad v. The Deputy Commissioner of Income Tax I,lnternational Taxation, Aayakar Bhavan, Basheerbagh, ' [1963La* Suit ][(SC) 143]8 AIR 1998 Supreme Court 688 Hyderabad & another (W.P.No. 1513 of 2OL9 of thisCourt|. 6. We have considered the submissions made on bothsides and have perused the record. The assessing offrcer byan order date<l 15.09.2006 under Section 220(2) of the Actheld that the a.ssessee is liable to pay a sum of Rs.1,63,153as interest as he had not paid the amount of tax within thestipulated tirne The said order was passed1n respect ofassessment ).ear 1993 94 . The assessee instead ofchallenging ttLe order dated 15.09.2006 passed by theassessing offict:r filed an application under Section 15.1 of theAct seeking rectification of the order dated 15.09.2006passed by the assessing officer. The aforesaid application wasrejected by the assessing officer on 14.O2.2OO77. Thereupon, the assessee hled appeal before theCommissioner of Income Tax (Appeals)-V, Hyderabad :urd theCommissioner of Income Tax (Appeals)-V, Hyderabaddismissed the appeal holding that the Assessing Offi<:er hasrightll, chargeC interest exercising the po'"r,'ers conferred under the provisions of Section 220(2) of the Act ald thesarne was confirmed by the Tribunal. 8It is lelevant to extract the provisions of Section 220(2)of the Act, which reads as follows: under the provisions of Section 220(2) of the Act ald thesarne was confirmed by the Tribunal. 8It is lelevant to extract the provisions of Section 220(2)of the Act, which reads as follows: "(2) If th.e amount specihed in any notice of demand undersection 156 is not paid within the period limited undersub-section (1), the assessee sha-ll be liable to pay simpleinterest at [one per cent] for every month oi p-art of "Sonth-.coqrpr-iqed [in ][the ][period ][commencing ][from the ][day]section 156 is not paid within the period limited undersub-section (1), the assessee sha-ll be liable to pay simpleinterest at [one per cent] for every month oi p-art of "Sonth-.coqrpr-iqed [in ][the ][period ][commencing ][from the ][day]immediately following the end of the perioJ mentioned insub-section (1) and ending with the day on which thealnou nt is paid."sub-section (1) and ending with the day on which thealnou nt is paid." Thus, the above said provision clearly revea_ls that theassessee is liable for payment of interest if the tax uunountdemanded under Section 156 of the Act within the stipulatedtime. In the case on hand, the assessee has not paid thedemanded arnount of Rs.1,63, 153/- towards tax due andpayable to the Department within the stipulated period andthe Income Tax Officer rightly exercised the powers conferredunder Section 220(2) of the Act. 9. Section 154 of the Act deals with rectification ofmistake. The aforesaid provision is applicable only in case ofarithmetical or clerical error.In the case on hald, there is noarithmetical [/error ],apparentin the order passed by the Assessing Officer under Section [220(2\ ][of ][the ][Ar:t. ][The]Tribunal whilt: dismissing the [appeal specifically ][held ][that]there is no error or mistake in [the ][order ][passed ][by ][the]Assessing Offir:er under Section [220(2\ ][of ][the ][Act. ][Hence ][the]provisions of Section 154 of the Act are not applicable 10. Insofar a.s decisions relied upon by [the learned ][counsel]for the assessee in Nawab Mir Barkat Ali [Khan ][Bahadur](supra), U.B. Electronic Instruments Limited [(supra),]Anagram Wellington Assets Management [Company]Limited (supra), Executive Engineer, Bangalore [Water]Supply and Sewerage Board [(supra), ]Clix Capital [Services]Private Limited (supra) and Manik Chand Burman [(supra)]are concerned, the same are an authoriQi [for ]the [proposition]that in case the statute does not [provide]a period oflimitation, the power has to be exercised within a [reasonable]time limit. The question whether or not the [power ]has beenexercised u,ith in a reasonable time, has to be decided in thefacts and crrcumstances of each case. Therefore, theaforesaid decisions are of no assistance to the assessee. i 1 . The Tribunal while considering the provisions ofSections 220(21 ar:d 154 of the Act and also the law,dismissed the appeal and conlirmed the order of ,theCommissioner as well as the orders of the Assessirig Officerby giving cogent reasons. Hence the contention of theCommissioner as well as the orders of the Assessirig Officerby giving cogent reasons. Hence the contention of thelearned counsel for the appellant that the Tribuna_l as well asCommissioner without considering the grounds raised by theassessee in respect of charging of interest invoking theprovisions of Section 220(21 of the Act beyond period oflimitation of four years dismissed the appeal, is not tenableon the ground that the Tribunal as well as Commissionerafter due verification of the records and also the provisions ofthe Act and law passed the order.provisions of Section 220(21 of the Act beyond period oflimitation of four years dismissed the appeal, is not tenableon the ground that the Tribunal as well as Commissionerafter due verification of the records and also the provisions ofthe Act and law passed the order. 12. The pi'inciples laici down in the above said judgment issquarely appiicable to the facts and circumstances of thecase on hand on the ground that the assessee in spite of thedemand notice issued under Section 1 54 of the Actdemanding an amount of Rs.1,63,153/-, which is payable tothe Department, has not paid the said amount within thestipulated time i.e., a period of 3O days. As per the provisionsof Section 22aQ) of the Act, the assessee is liable to pay ::11:: interest, especially as there is no specific time for fixa.tion oftime limit for charging interest. The power to lery theinterest, in the facts and circumstances of the case, has beehexercised withi:r a reasonable time 1 3. In view of the preceding analysis, the substantialquestion of la'w is answered against the assessee and infavour of revenue 14. In the result, rve do not find ary merit in this appealAccordingly, th e same fails and is hereby dismissed. Thereshall be no ord,3r as to costs Miscellaneous applications, if any pending, shall stand closed A.V.S.S.C.S.M.SARMAJOINT ISTRAR\ //TRUE [COPY'/] sfcrtou [oFFlcER] To 1. The [lncome ][Tax ][Appellate ][Tribunal' ][Hyderabad ][Benches] Til3%3?i'*'ssioner [or ][lncome ][rax ][(Appeals) ][- ][V' ][Hvderabad']; ffi , i'nii;;-iai [otrlcer ward-5(3) ][Hlderabad']i' 3ffi [33 ][3 ][U[k ',XS.*tSt?8EY.'?J"ME ][rAx ][toPUC]]6. Two [CD CoPies] PR/gh 6 A", SMC, HIGH COURT DATED: 2311212024 JUDGMENTITTA.No.27 of 2009 DISMISSING THE I.T.T.A .,6- S7a7.F5o()I()09JAl{2025C)):IAD.r:.S nAT a \-\i.