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Income Tax Appellate Tribunal, KOLKATA ‘B’ BENCH, KOLKATA
Before: Sri J. Sudhakar Reddy & Sri S.S. Godara]
IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘B’ BENCH, KOLKATA [Before Sri J. Sudhakar Reddy, Accountant Member & Sri S.S. Godara, Judicial Member] I.T.A. No. 879/Kol/2017 Assessment Year: 2003-04 The Peerless Gen. Fin. & Inv. Co. Ltd…………......…….............................................…………….…….……...Appellant 3, Esplanade East Kolkata – 700 069 [PAN: AABCT 3042 L] Deputy Commissioner of Income Tax , Circle-3(1), Kolkata…….…………..……………………..…. Respondent
I.T.A. No. 1385/Kol/2017 Assessment Year: 2003-04 Deputy Commissioner of Income Tax , Circle-3(1), Kolkata…….…………..……………………..…. Respondent The Peerless Gen. Fin. & Inv. Co. Ltd…………......…….............................................…………….…….……...Appellant 3, Esplanade East Kolkata – 700 069 [PAN: AABCT 3042 L] Appearances by: Shri S.K. Tulsiyan, Advocate & Sri S.De, FCA, appeared on behalf of the assessee. Shri Robin Choudhury, Addl. CIT, DR appearing on behalf of the Revenue. Date of concluding the hearing : August 21st, 2018 Date of pronouncing the order : September 7th , 2018 O R D E R Per J. Sudhakar Reddy :- These are cross-appeals directed against the order of the ld. Commissioner of Income Tax (Appeals)-17, Kolkata, (hereinafter the ‘ld. CIT (A)’), passed u/s 250 of the Income Tax Act, 1961 (the ‘Act’), for the Assessment Year 2003-04.
The Assessing Officer, in this case has passed an order u/s 154/251/154/154/251/143(3) of the Act, dt. 18/07/2008, which reads as follows:- “It is seen from the assessment records that there was some mistake in calculation u/s 244A of the Act, the order u/s 251/154/154/251/143(3) dt. 30.04.08. In order to rectify this mistake a notice u/s. 154 was issued to assessee-co. on 10.06.08. Later, a letter was issue to assessee-co. regarding interest u/s 234C. In reply to said notice A/R, Sri Subrata Dey appeared with a petition dt. 13.06.2018 which is placed on record.
2 I.T.A. No. 879/Kol/2017 Assessment Year: 2003-04 I.T.A. No. 1385/Kol/2017 Assessment Year: 2003-04 The Peerless Gen. Fin. & Inv. Co. Ltd Thereafter a letter was also filed by assessee-co. in connection of interest u/s. 234C which is in the record.”
2.1. As a mistake is apparent from the record, the order u/s 251/154/154/251/143(3) of the Act, dt. 30/04/2008, is rectified as under:- This order u/s 154/251/154/154/251/143(3) of the Act, was passed after the Assessing Officer after giving a showcause notice u/s 154 of the Act to the assessee, on 10/06/2008. A copy of this notice is at page 10 of the paper book. The “particulars of the mistake” to be rectified as per this showcause notice is extracted below for ready reference:-
3 I.T.A. No. 879/Kol/2017 Assessment Year: 2003-04 I.T.A. No. 1385/Kol/2017 Assessment Year: 2003-04 The Peerless Gen. Fin. & Inv. Co. Ltd
Thus the particulars of mistake proposed to be rectified is as follows:- “Mistake in calculation of interest u/s 244A”
2.2. The order dt. 30/04/2008 passed by the Assessing Officer is the order sought ot be rectified. This order is a consequential order. The Assessing Officer passed the consequential order giving effect to the order of the ld. Commissioner of Income Tax (Appeals)-I, Kolkata, dt. 22/01/2008, wherein at page 3 para 2, the ld. CIT(A) held as follows:- “Respectfully following the decision of the Hon’ble Supreme Court, the A.O. is directed to compute interest u/s 244A on the refunds of Rs.7,89,83,364 and Rs.29,55,87,064 upto 30.06.04 and also grant interest upto date on such unpaid interest” The consequential order in question is at page 8 of the paper book and is dt. 30/04/2008 and the operating portion reads as follows:-
4 I.T.A. No. 879/Kol/2017 Assessment Year: 2003-04 I.T.A. No. 1385/Kol/2017 Assessment Year: 2003-04 The Peerless Gen. Fin. & Inv. Co. Ltd “In pursuance of Ld. CIT(A)-I, Kol’s order in Appeal No.251/CIT(A)/Cir-3/07-08 dt.22.01.08, the appeal effect is being given and the order u/s 154/154/251/143(3) dt. 03.04.08 is revised as under:-”
2.2.1. The impugned order passed u/s 154 of the Act, dt. 30/04/2008 was challenged by the assessee before the ld. CIT(A). The ld. CIT(A) directed the Assessing Officer to check the computation of interest and allow interest u/s 244A to the assessee as per the directions of the ld. CIT(A) vide order dt. 22/01/2008.
Further aggrieved both the assessee as well as the revenue are in appeal before us.
There is a delay of 13 days in filing of the appeal by the revenue. After perusing the petition filed for condonation of delay, we are convinced that the revenue was prevented by sufficient cause from filing the appeal in time. Hence the delay is condoned and appeal admitted.
We have heard rival contentions. On careful consideration of the facts and circumstances of the case, perusal of the papers on record, orders of the authorities below as well as case law cited, we hold as follows:-
The first contention of the assessee is that the showcause notice issued by the Assessing Officer, proposing rectification of the order passed u/s 154 of the Act, dt. 30/04/2008, is non-speaking. He relies on the judgement of the Hon’ble Supreme Court in the case of ACIT vs. Shreyas Gramin Bank (2012) 210 Taxman 276 (SC), wherein it was held as follows:- “We have gone through the Notice under Section 154 of the Income Tax Act, 1961 [‘Act’, for short]. We find that the said notice is totally vague. The Assessing Officer has not even indicated as to on what basis he has allowed excess set-off. Notice under Section 154 of the Act, therefore, was not maintainable. The second notice under Section 148 of the Act was issued squarely on the basis of notice under Section 154 fo the Act. In the circumstances, the High Court was right in setting aside both the notices. We, therefore, see no reason to interfere with the impugned order.”
5 I.T.A. No. 879/Kol/2017 Assessment Year: 2003-04 I.T.A. No. 1385/Kol/2017 Assessment Year: 2003-04 The Peerless Gen. Fin. & Inv. Co. Ltd 6.1. A perusal of the notice issue proposing rectification in this case, in our view, is vague, as it states as follows:- “Mistake in calculation of interest u/s 244A” The nature of mistake is not stated. In fact this interest was granted on the direction of an appellate authority. Hence the proposition of law laid down in this case law applies to the facts of the case. Accordingly the impugned order passed u/s 154 of the Act, dt. 18/07/2018, has to be quashed. Be it as it may, the interest has been calculated as per the directions of the Appellate Authority i.e. the ld. CIT(A) in this case, vide its order dt. 22/01/2018. When an order is passed in compliance with the directions of an appellate authority, it cannot be change on the ground that there is a mistake apparent on record.
The Hon’ble High Court in the case of the CIT vs. The Peerless General Finance & Investment Co. Ltd. in G.A. No. 222 of 2014, order dt. 16/01/2015, has answered the following questions, in favour of the assessee:-
"1. Whether on the facts and circumstances of the case the Learned Tribunal is justified in law in holding that the Assessing Officer has no jurisdiction to exercise the power of rectification under section 154 of the Income Tax Act, 1961 ?
Whether on the facts and circumstances of the case, the Learned Tribunal was justified in law by not holding that Section 244A of the Income Tax Act, 1961 provides for interest on refunds under various contingencies, it is only that interest provided for under the statute which may be claimed by the Assessee from the Revenue and no other interest on such statutory interest?" The Hon’ble High Jurisdictional High Court, held as follows:-
“6. In the case of Gujarat Fluoro Chemicals (supra) in paragraph-8 Their Lordships opined that "we clarify that it is only that interest provided for under the statute which may be claimed by an assessee from the Revenue and no other interest on such statutory interest." 7. But in the case of Heg Ltd. (supra) Their Lordships construed the meaning of the words 'amount due' appearing in section 244A of the Income Tax Act and came to the conclusion that the interest becomes part of the amount due.
6 I.T.A. No. 879/Kol/2017 Assessment Year: 2003-04 I.T.A. No. 1385/Kol/2017 Assessment Year: 2003-04 The Peerless Gen. Fin. & Inv. Co. Ltd 8. In any event, the fact that the decision on a question of law on which the judgement is based has been reversed or modified by any subsequent decision of a superior court cannot be a ground for exercise of power under section 154 of the Income Tax Act. Reference in this regard may be made to a Division Bench judgement of this Court in the case of Jiyajeerao Cotton Mills Ltd. v. ITO [1981] 130 ITR 710 wherein the following views were taken :
"…We are, however, unable to accept the contention of Mr. Pal that the principle of retrospective legislation is applicable to the decisions of the Supreme Court declaring the law or interpreting a provision in a statute. The law is laid down or a provision in a statute is interpreted by the Supreme Court only when there is a debate or doubt on the interpretation of any provision of a statute requiring interpretation by the Supreme Court or when there is a conflict of judicial opinion on a provision of a statute between the different High Courts of India which is required to be resolved and settled by the Supreme Court. The law laid down by the Supreme Court, in our opinion, cannot be said to have retrospective operation in the sense that although a debate or doubt or a conflict of judicial opinion is resolved and settled by the Supreme Court, yet still that does not obliterate the existence of such debate or doubt or conflict that existed prior to the decision of the Supreme Court setting at rest such debate or doubt or conflict."
There is still another way of looking at it. Under Order 47 Rule 1 of the Code of Civil Procedure there is a provision for review. But the power of Court to review contains the following restriction. "..Explanation:— The fact that the decision on a question of law on which the judgment of the Court is based has been reversed or modified by the subsequent decision of a superior Court in any other case, shall not be a ground for the review of such judgment". 10. We are, as such, of the opinion that the learned Tribunal was justified in reversing the order passed in exercise of section 154 by the Assessing Officer.”
7 I.T.A. No. 879/Kol/2017 Assessment Year: 2003-04 I.T.A. No. 1385/Kol/2017 Assessment Year: 2003-04 The Peerless Gen. Fin. & Inv. Co. Ltd 7. Respectfully following the propositions of law laid down in the above judgment to the facts of the case on hand, we quash the impugned order passed by the Assessing Officer u/s 154/251/154/154/251/143(3) of the Act, dt. 18/07/2008.
In the result, appeal of the assessee is allowed and the appeal of the revenue is dismissed. Kolkata, the 7th day of September, 2018.
Sd/- Sd/- [S.S. Godara] [J. Sudhakar Reddy] Judicial Member Accountant Member Dated : 07.09.2018 {SC SPS}
Copy of the order forwarded to: 1. The Peerless Gen. Fin. & Inv. Co. Ltd 3, Esplanade East Kolkata – 700 069
Deputy Commissioner of Income Tax , Circle-3(1), Kolkata 3. CIT(A)- 4. CIT- , 5. CIT(DR), Kolkata Benches, Kolkata.