The Commissioner Of Income Tax – 4, Mumbai v. Dsp Merrill Lynch Limited

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.5370 OF 2010 The Commissioner of Income Tax – 4, Mumbai..Appellant.Versus DSP Merrill Lynch Limited..Respondent. Mr.Vimal Gupta, Senior Advocate with Ms.Padma Divakar for the appellant.Mr.Percy J Pardiwala, Senior Advocate with Mr.B.D. Damodar i/by Kanga & Company for the respondent. P.C. : 1.The question of law raised by the Revenue in this appeal reads thus : “Whether on the facts and in the circumstances of the case and in law the Tribunal was justified in holding that the provisions of Section 234D of the Income-tax Act could not be applied retrospectively for Assessment Years prior to AY 2004-2005 even though the order under Section 154 levying interest under Section 234D of the Income-tax Act for assessment year 1996-1997 was framed after 1-6-2003 and interest levied under Section 234D pertained to the period 1-12-1997 to 20-02-2004 ?” 3.The Income Tax Appellate Tribunal by following the Special Bench decision in the case of Income Tax Officer V/s. Ekta Promoters Private Limited reported in (2008) 117 TTJ 289 (Delhi) has held that Section 234D is applicable from assessment year 2004-2005 and, hence, interest under Section 234D claimed by the Revenue relating to the assessment year 1996-1997 cannot be sustained. 4.Over-ruling the aforesaid judgment of the Income Tax Appellate Tribunal in the case of Ekta Promoters Private Limited (supra), this Court in the case of Commissioner of Income Tax V/s. Indian Oil Corporation (Income Tax Appeal no.2012 of 2011) decided on 12[th] September 2012 has held that Section 234D would apply for assessment year even prior to assessment year 2004-2005. Thus, the issue relating to the applicability of Section 234D for assessment year prior to AY 2004-2005 depending upon the facts of each case stands concluded in favour of the Revenue. 5.However, in the present case the Commissioner of Income Tax (A) had deleted the interest levied under Section 234D on the ground that on the date on which assessment order under Section 143(3) of the Act was passed, Section 234D was not on the statute book and, therefore, interest under Section 234D levied pursuant to an order passed under Section 154 of the Act after the insertion of Section 234D cannot be sustained. Since the Income Tax Appellate Tribunal has not considered this aspect of the matter, while setting aside the order of the Income Tax Appellate Tribunal dated 19[th ]November 2008, we restore the above issue to the file of the Income Tax Appellate Tribunal for fresh decision on merits and in accordance with law. All contentions of both the parties are kept open. 6.The appeal is disposed of in above terms with no order as to costs. (M.S. Sanklecha, J.) (J.P. Devadhar, J.)