The Commissioner Of Income Tax v. Zuari Industries Ltd

IN THE HIGH COURT OF BOMBAY AT GOA TAX APPEAL NO. 23 OF 2009 THE COMMISSIONER OF INCOME TAX VersusZUARI INDUSTRIES LTD ... Appellant ... Respondent Mr. S. R. Rivonkar, Advocate for the Appellant.Mr. M. S. Sonak and Mr. J. Supekar, Advocates for the Respondent. P.C.: -Coram:NARESH H. PATIL &N. A. BRITTO, JJ.-Date:22nd February, 2010 Heard. 2. The learned Counsel appearing for the appellant submitted that inthe present case, the assessment year was admittedly, 2001-02 duringwhich the assessment was done and Revenue passed an order ofrefund. Provisions of Section 234 (D) of IT Act were amended w.e.f.1/06/2003 and the regular assessment was done on 29/03/2004. 3. The Assessing Officer, while exercising his powers under Section234 (D), directed the Assessee to deposit the amount refunded earlier,with interest. The order was challenged in appeal by the Assessee,before the Commissioner of Income Tax. The Commissioner partlyallowed the appeal by directing the Assessing Officer to chargeinterest under Section 234 (D) from 1/06/2003 till 31/03/2004. 4. Assessee as well as Revenue, both filed appeal before the IncomeTax Appellate Tribunal (ITAT). The appeal of the Assessee wasallowed and appeal filed by Revenue was dismissed. 5. The learned Counsel for the appellant submits that the provisionsof levy of tax in respect of the amendment of Income Tax Act, are tobe interpreted differently than the provisions relating to grant ofinterest, which is in the nature of compensation. In the facts of thecase, according to learned Counsel, the amount of refund wasenjoyed by the Assessee for certain period. The Assessing Officerdirected the Assessee to refund the said amount on which theAssessee was directed to pay interest. The learned Counsel placedreliance on the Special Bench judgment of ITAT, Delhi in the case ofINCOME TAX OFFICER V/s. EKTA PROMOTERS (P) Ltd. (2008)113 ITD 0719 (DELHI). 6. The learned Counsel Shri Sonak placed reliance on the cases ofT.S. BALARAM, INCOME TAX OFFICER V/s. M/s. VOLKARTBROTHERS reported in 1971(2) SCC 526, THE KARIMTHARUVITEA ESTATE LTD., V/s. THE STATE OF KERALA (AIR 1966 SC1385 (V 53 C 267), M/s. RELIANCE JUTE AND INDUSTRIESLTD. V/s. C.I.T., WEST BANGAL, CALCUTTA (1980) 1 SCC 139and GOVIND DAS & OTHERS V/s. THE INCOME TAXOFFICER & ANOTHER (1976) 1 SCC 906, based on which, theCounsel submitted that the amendment to the Act could not beimplemented retrospectively. The amendment could not be takeninto consideration merely because the Assessee was assessed after thedate of amendment. The Counsel further submitted that theAssessing Officer committed error in exercising his powers underSection 234 (D) and that the issue was debatable. There is no errorapparent. 7. The learned Counsel for the appellant, on instructions, submittedthat the Revenue did not challenge the order passed by the SpecialBench of ITAT. 8. We find substance in the submission advanced by the learnedCounsel appearing for the respondent that any amendment in the Actcoming into force after amendment to the Income tax Act, could notbe implemented and given effect to retrospectively. In the facts ofthe case, the subject assessment was done for 2001-02 assessmentyear and the regular assessment was done on 29/03/2004, obviouslyafter the said amendment, which was given effect to from 1/06/2003. In the light of the ratio laid down in the judgments cited supra, we arenot convinced to interpret the provisions relating to tax and interestdifferently. 9. We do not find any substantial question of law. The appealstands dismissed. NARESH H. PATIL, J. NH N. A. BRITTO, J.