ASSISTANT COMMISSIONER OF INCOME TAX vs. M/S. ISMT LIMITED,, PUNE

This appeal by the Revenue against the order dated 26-09-2016 passed by the Commissioner of Income Tax (Appeals)-12, Pune [„CIT(A)‟] for assessment year 2007-08.

The only issue is to be decided is as to whether the CIT(A) justified in deleting the interest levied u/s. 234B and 234C of the Act on the revised book profit in the facts and circumstances of the case.

Heard both the parties and perused the material available on record. The assessee is a company and engaged in the manufacturing of specialized seamless tubes. Originally the assessee filed return of income on 31-10-2007 declaring a total income at Rs.Nil. Again on 29-03-2008 a revised return of income filed declaring total income at Rs.Nil in view of insertion of Clause (h) in Explanation -1 to section 115JB of the Act with retrospective effect. The AO completed assessment on such revised return of income on 20-12-2010 u/s. 143(3) of the Act inter alia making an addition of Rs.20,320/- on account of club expenses and levied interest u/s. 234B and 234C of the Act on revised book profit in view of above said amendment. The assessee challenged the same before the CIT(A) and addition made on account of club expenses were deleted and interest levied u/s. 234B and 234C of the Act was confirmed. As aggrieved, the assessee challenged the same before the Tribunal. As it emanates from both the orders below in para 4 of the AO and para 11 of the CIT(A) that this Tribunal granting relief in favour of the assessee regarding the interest levied u/s. 234B and 234C of the Act. Against which the Department preferred an appeal before the Hon‟ble High Court of Bombay, which is pending as of now.

As matter stood thus, on 09-08-2011 a search action u/s. 132 of the Act was conducted in the case of assessee wherein the CEO of the company representing the assessee made disclosure of additional income of Rs.65.02 crores. We also note he specifically stated that the said disclosure made in terms of statement u/s. 132(4) of the Act would also be added back to the book profits of the concerned block years. In response to notice u/s. 153A the assessee filed return of income declaring a total income of Rs.Nil on 01-02-2013. The AO determined the book profit at Rs.137,19,56,439/- and charged interest u/s. 234B and 234C of the Act vide its order dated 31-03-2015 passed u/s. 153A r.w.s. 143(3) of the Act.

As aggrieved by the order passed u/s. 153A/143(3) of the Act, the assessee challenged the said assessment order before the CIT(A) and contended that this Tribunal granted relief in respect of levy of interest u/s. 234B and 234C of the Act and the interest so levied by the AO in the assessment order passed u/s. 153A r.w.s. 143(3) of the Act is bad under law. We note that the CIT(A) considered the submissions of assessee in para 11 of the impugned order and opined since there is no order contrary to the findings of this Tribunal, held the AO was not justified in imposing the interest u/s. 234B and 234C of the Act and deleted the interest levied.

The ld. DR, Shri Deepak Garg submits that the Department of Revenue not satisfied with the order of this Tribunal filed an appeal before the Hon‟ble High Court of Bombay challenging the relief granted u/s. 234B and 234C of the Act which is pending before the Hon‟ble High Court of Bombay. We find that having perused the record no order brought before us showing reversing or modifying the order of this Tribunal in granting relief to the assessee.

The ld. AR, Shri Rajan Vora submits that the AO ought not to have levied interest u/s. 234B and 234C of the Act as the same issue was decided by this Tribunal in the original assessment proceedings u/s. 143(3) of the Act in favour of the assessee. The Revenue challenged the same before the Hon‟ble High Court of Bombay and there was no contrary order either by reversing or modifying the order of this Tribunal. He submits that the CIT(A) rightly held the order of this Tribunal is holds the field today and supported the impugned order. We find force in the arguments of ld. AR the AO ought not to have levied interest as there was no order from Hon‟ble High Court of Bombay reversing the finding of Tribunal, therefore, in our opinion, the finding rendered by the CIT(A) is justified. Therefore, we do not find any infirmity in the order of CIT(A). Accordingly, the grounds raised by the Revenue are dismissed.

In the result, the appeal of Revenue is dismissed.