R. K. Garg v. Commissioner Of Income Tax, Chandigarh And Another

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 212 of 2010 (O&M) Date of decision: 27.8.2010 R. K. Garg ....Appellant vs Commissioner of Income Tax, Chandigarh and another ...Respondent Coram: Hon'ble Mr. Justice Adarsh Kumar GoelHon'ble Mr. Justice Rajesh Bindal Present: Mr. Akshay Bhan, Advocate for the appellant. Rajesh Bindal,J. The assessee is in appeal before this court under Section 260A of theIncome Tax Act, 1961 (in short “the Act”) against the order dated 7.5.2009 passedby the Income Tax Appellate Tribunal, Chandigarh Bench (A), Chandigarh(hereinafter referred to as “the Tribunal”) in ITA No. 1010/CHANDI/2008 for theassessment year 2005-06, raising the following substantial questions of law:- “(i)Whether in facts and circumstances of the case, theaction of the authorities below in holding that theamount of interest is taxable as the same cannot besaid to have accrued to the assessee as the matter isstill pending adjudication is legally sustainable inthe eyes of law?action of the authorities below in holding that theamount of interest is taxable as the same cannot besaid to have accrued to the assessee as the matter isstill pending adjudication is legally sustainable inthe eyes of law? (ii)Whether in fact and circumstances of the case, theaction of the authorities below, in not following thejudgment of the various Court including theHon'ble Apex Court and this Hon'ble Court islegally sustainable in the eyes of law?action of the authorities below, in not following thejudgment of the various Court including theHon'ble Apex Court and this Hon'ble Court islegally sustainable in the eyes of law? (iii)Whether in fact and circumstances of the case, theaction of the authorities below, the impugned ordersAnnexure A-1 to A-3 are legally sustainable in theeyes of law?”action of the authorities below, the impugned ordersAnnexure A-1 to A-3 are legally sustainable in theeyes of law?” Briefly the facts are that while framing the assessment for theassessment year 2001-02, certain additions were made by the Assessing officer. Inthe appeal, the Commissioner of Income Tax (Appeals) (for short, “the CIT (A)”). accepted the plea raised by the assessee and deleted the additions. Along with therefund, the assessee was held entitled to interest under Section 244-A of the Act.The revenue went in appeal before the Tribunal against the order passed by theCIT (A) accepting the appeal filed by the assessee. Along with the refund, theinterest was received by the assessee in the financial year 2004-05. It wasconsidered for assessment in the assessment year 2005-06 by the assessing officervide order dated 29.11.2007. In appeal, the order of assessment bringing theamount of interest received by the assessee on the amount of refund was upheld bythe CIT (A). Even the Tribunal also upheld that order. It is against this order thatthe assessee is in appeal before this court. Learned counsel for the assessee submitted that the matter in disputebeing pending, the interest awarded thereon should not be taxed till such time thedispute attains finality as there can be a chance that the order awarding interestmay be set aside and in that eventuality the assessee may have to refund back thatamount. The same should be assessed to tax only in the year it attains finality. After hearing learned counsel for the assessee, we do not find anymerit in the submissions made. Once the assessee has received the amount of interest, the same hasrightly been brought to tax by the assessing officer in the year it was received.However, in case subsequently there is any variation in the order in the pendinglitigation, the same can very well taken care of in proceedings under Section 154of the Act, as has been rightly upheld by the Tribunal. For the reasons mentioned above, we do not find any substantialquestion of law arises in the present appeal. Accordingly, the same is dismissed. (Rajesh Bindal)Judge 27.8.2010 vs (Adarsh Kumar Goel)Judge