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Income Tax Appellate Tribunal, BANGALORE BENCH ‘A’, BANGALORE
Before: SHRI ABRAHAM P GEORGE & SHRI VIJAY PAL RAO
This appeal by the revenue is directed against the order dated 15- 12-2014 of CIT(A)-12, Bangalore for the assessment year 2011-12. The revenue has raised the following grounds.
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“1. The ld.CIT(A) failed to appreciate the decision of the case of Ansaldo Energia SPA Vs ADIT 115 TTJ(Chennai) 942 and the decision of the Hon’ble SC in the case of CIT Vs Anjum M.H.Ghuswallla & Others (252 ITR 1) wherein it was held that the levy of interest 234A, 234B & 234C is mandatory in nature.
2. The ld.CIT(A) erred in directing the AO to delete the interest u/s 234B which defects the intent and purpose of the provisions contained in Section 209(1)(d) of the IT Act, 1961 and will nullify the powers of the revenue and is detrimental to the interest of revenue.
The assessee company is a tax resident of Switzerland and filed its return of income for the assessment year under consideration on 30-09- 2011, declaring total income at Rs.Nil. The AO while computing the assessment, assessed the total income of the assessee at Rs.9,96,27,925/- and after giving the benefit of DTA as well as tax deducted at source, the tax payable was computed at Rs.5,48,173/-. The AO has levied interest u/s 234B of the IT Act, 1961. The assessee challenging the action of the AO in levying the interest u/s 234B before the CIT(A). The CIT(A) has deleted the interest levied u/s 234B by following the order of the Tribunal in assessee’s own case for the assessment year 2010-11.
We have heard the learned DR as well as the counsel for the assessee and considered the material available on record. At the outset, we note that the issue of levy of interest u/s 234B has been considered and 3 IT(IT)A No.168(Bang)2015 decided by this Tribunal in assessee’s own case for the assessment year 2010-11 vide order dated 17-04-2015 in in para-3 to 4 as under;
“3. We see no reasons to take any other view of the matter than the view so taken by Hon’ble Courts above, and by coordinate benches following these views of Hon’ble High
Courts. On a rather recent decision of this Tribunal, in the case of DDIT vs Synopsys International Ltd and vice versa
(IT(IT)A Nos 1321 and 1296/Bang/14; order dated 7th April
2015), the legal position has been summed up as follows:
“6. We have heard the rival contentions, perused the material on record and duly considered facts of the case in the light of the applicable legal position.
In response to a question from the bench, learned Departmental Representative pointed out that there is no judicial precedent on this issue by Hon’ble jurisdictional High Court, though now there is a decision of Delhi High Court on this issue, in favour of the revenue, in the case of DIT Vs Alcatel Lucent Inc USA [(2014) 264 ITR 240 (Del)]. Learned counsel for the assessee submits that even this decision of Hon’ble Delhi High Court is no longer good law in view of subsequent decision of the same Hon’ble High Court, which takes into account the amendment in section 209(1)(d) and holds the same to be only prospective in effect with effect from 1st April 2012, in the case of DIT Vs GE Packaged Power Inc&Ors [(2015) TII – 02- HC- DEL- INTL]. It is thus submitted that the decisions of the non jurisdictional Hon’ble High Court are unanimously in favour of the assessee. In any case, according to the learned counsel, the issue is covered in favour of the assessee by decision of a coordinate bench in assessee’s own case.
8. We see merits in the erudite contentions of the learned counsel. As he rightly states, the issue is squarely covered, in 4 IT(IT)A No.168(Bang)2015
favour of the assessee, by decisions of Hon’ble non jurisdictional High Courts, and that even the decisions of non- jurisdictional High Court, being from a higher tier of the judicial forums, bind us. As regards the decision of Hon’ble Delhi High Court in the case of Alcatel Lucent (supra), as learned counsel has pointed out, nothing really turns on that because not only that this decision has been in effect overruled by a subsequent bench in Delhi High Court in the case of GE Packaged Power Inc(supra), confining the ratio of this decision to peculiar facts of the said case, even if there are conflicting views of non jurisdictional High Court and we donot have the benefit of guidance from the Hon’ble jurisdictional High Court, the view in favour of the assessee is required to be accepted. In coming to this view, we find support from the decision of a coordinate bench of this Tribunal in the case of Tej International Pvt Ltd Vs DCIT [(2000) 69 TTJ 650 (Del)] wherein it was observed thus:
………In the hierarchical judicial system that we have, better wisdom of the Court below has to yield to higher wisdom of the Court above and, therefore, once an authority higher than this Tribunal has expressed an opinion on that issue, we are no longer at liberty to rely upon earlier decisions of this Tribunal even if we were a party to them. Such a High Court being a non- jurisdictional High Court does not alter the position as laid down by Hon’ble Bombay High Court in the matter of CIT vs. Godavari Devi Saraf (1978) 113 ITR 589 (Bom). Therefore, we do not consider it permissible to rely upon the earlier decisions of this Tribunal even if one of them is by a Special Bench. It will be wholly inappropriate for us to choose views of one of the High Courts based on our perceptions about reasonableness of the respective viewpoints, as such an exercise will de facto amount to sitting in judgment over the views of the High Courts something diametrically opposed to the very basic principles of hierarchical judicial system. We have to, with our highest respect of both the Hon’ble High Courts, adopt an objective criterion for deciding as to which of the Hon’ble High Court should be followed by us.
We find guidance from the judgment of Hon’ble Supreme Court in the matter of CIT vs. Vegetable Products Ltd. 1973 CTR (SC) 177 : (1972) 88 ITR 192 (SC). Hon’ble Supreme Court has laid down a principle that "if two
5 IT(IT)A No.168(Bang)2015 reasonable constructions of a taxing provisions are possible, that construction which favours the assessee must be adopted". This principle has been consistently followed by the various authorities as also by the Hon’ble Supreme Court itself. In another Supreme Court judgment, Petron Engg. Construction (P) Ltd. &Anr. vs. CBDT &Ors. (1988) 75 CTR (SC) 20 : (1989) 175 ITR 523 (SC), it has been reiterated that the above principle of law is well established and there is no doubt about that. Hon’ble Supreme Court had, however, some occasions to deviate from this general principle of interpretation of taxing statute which can be construed as exceptions to this general rule. It has been held that the rule of resolving ambiguities in favour of tax-payer does not apply to deductions, exemptions and exceptions which are allowable only when plainly authorised. This exception, laid down in Littman vs. Barron 1952(2) AIR 393 and followed by apex Court in Mangalore Chemicals & Fertilizers Ltd. vs. Dy. Commr. of CT (1992) Suppl. (1) SCC 21 and Novopan India Ltd. vs. CCE & C 1994 (73) ELT 769 (SC), has been summed up in the words of Lord Lohen, "in case of ambiguity, a taxing statute should be construed in favour of a tax-payer does not apply to a provision giving tax-payer relief in certain cases from a section clearly imposing liability". This exception, in the present case, has no application. The rule of resolving ambiguity in favour of the assessee does not also apply where the interpretation in favour of assessee will have to treat the provisions unconstitutional, as held in the matter of State of M.P. vs. Dadabhoy’s New ChirmiryPonri Hill Colliery Co. Ltd. AIR 1972 (SC) 614.
In view of the above discussions and respectfully following the esteemed views of Hon’ble non jurisdictional High Court in the cases of Krupp Udhe GmbH (supra),NGC Network Asia LLC (supra) and Maersk Co Ltd (supra), as also of the coordinate bench in assessee’s own case, we uphold the stand of the CIT(A) and decline to interfere in the matter.”
Respectfully following the above precedents, we uphold the relief given on this issue by the Commissioner of Income- tax(A) and decline to interfere in the matter.
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4. The learned DR has submitted that levy of interest u/s 234B is mandatory in nature. He has further submitted that the Tribunal while deciding the issue for the assessment year 2010-11 has not considered the decision of the Chennai Benches of the Tribunal in the case of Ansaldo Energia SPA Vs ADIT(Intl.Taxation) 15 TTJ 942(Chennai). We also note that even in the case of Ansaldo Energia SpA the Tribunal has accepted the proposition that to the extent of tax deducted at source it should be reduced from the total tax for the purpose of computing the interest u/s 234B of the IT Act, 1961. In the case in hand, there is no dispute that the entire receipt of the assessee was subjected to TDS. Therefore, in view of the various decisions as followed by this Tribunal in assessee’s own case for the assessment year 2010-11, the decision relied upon by the learned DR will not help the case of the AO. Accordingly, following the earlier decision of this Tribunal in assessee’s own case, we do not find any error or illegality in the impugned order of the CIT(A) qua this issue.
In the result, the appeal of the revenue is dismissed.
Pronounced in the open court on 22nd June, 2015.