The Commissioner Of Income Tax , Patiala v. M/S Punjab State Electricity Board, Patiala

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. ITA No. 516 of 2006Date of decision: 6.12.2010 The Commissioner of Income Tax , Patiala Vs. -----Appellant M/s Punjab State electricity Board, Patiala. ----Respondent CORAM:- HON'BLE MR JUSTICE ADARSH KUMAR GOELHON’BLE MR. JUSTICE AJAY KUMAR MITTAL Present:-Mr. Jatinder Joshi, Advocate for the appellant.Mr. Pankaj Jain, advocate for the respondent. Adarsh Kumar Goel,J. 1.The revenue has preferred this appeal under Section 260A ofthe Income Tax Act, 1961 (for short, ‘the Act’) against the order passed bythe Income Tax Appellate Tribunal Chandigarh Bench ‘B’ Chandigarhdated 24.2.2005 in ITA No.439/Chandi/1997 for the assessment year 1988-89, proposing to raise following substantial question of law:- “Whether on the facts and in the circumstances of thecase, the ITAT is right in law in holding that charging ofinterest in this case is invalid since the Hon’ble HighCourt has stayed the recovery of demand whereasprovisions for charging of interest are mandatory innature? 2. The assessee is a State Electricity Board. It accepted certain deposits for raising funds but failed to deduct surcharge on the amount paidby way of interest. On that account, demand was raised under section 201(1A) read with section 193 of the Act. On appeal, the CIT(A) upheld theplea of the assessee that the persons to whom interest was paid had already deposited the tax. The recipients of the interest were nationalised andcommercial banks and public undertakings and thus, there was no losscaused to the revenue. The appeal of the revenue against the said order hasbeen dismissed by the Tribunal. 3.We have heard learned counsel for the parties and perused the record. 4.It is not disputed by learned counsel for the parties that thematter is covered by order passed by this Court dated 28.6.2010 in the caseof the assessee being CWP No.16418 of 1994 and ITA Nos.104, 106 and109 of 2002. The appeals of the revenue were dismissed against order ofthe Tribunal holding that interest could be charged only upto to the date thesurcharge due was actually paid and not for the period after the payment.The Assessing Officer was given liberty to make necessary calculation inthe light of the said finding. The writ petition of the assessee was dismissedas infructuous in view of adjudication of the issue during pendency of thewrit petition. 5. In the present case, the Tribunal has referred to pendency ofthe writ petition wherein recovery of demand had been stayed on account ofwhich the issue was held to be academic. Liberty was given to the revenueto proceed in the matter in the light of the decision of the writ petition.6.In view of the fact that the writ petition has been decided, therevenue is at liberty to proceed in the matter in the light of judgment of thisCourt dated 28.6.2010. 7.The appeal is accordingly disposed of. (Adarsh Kumar Goel) Judge December 6, 2010‘gs’ (Ajay Kumar Mittal) Judge