Lal Chand & Co., New Delhi vs Department Of Income Tax

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH 'D ', NEW DELHI) BEFORE SHRI T.S. KAPOOR, ACCOUNTANT MEMBER AND SHRI C. M. GARG, JUDICIAL MEMBER I.T.A. No. 456/Del/2013 Assessment year : 2008-09 ACIT, Circle 38(1), Vs. M/s. Lal Chand & Co., New Delhi C-66, Y-3, Dilshad Garden, Shahadra, Delhi GIR / PAN:AAAFL3234D (Appellant) (Respondent) Appellant by : Ms. Paraminder Kaur, Sr. DR Respondent by : Shri K P Garg, CA ORDER

PER T.S. KAPOOR, AM:

This is an appeal field by Revenue against the order of Ld. CIT(A) dated 31.10.2012. The grounds of appeal taken by revenue are reproduced below:

"On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in:

1. In the facts and circumstances of the case, the CIT(A) has erred in concluding that withdrawal of interest u/s 244A and consequential interest u/s 234D of I T Act was incorrect without appreciating that as per record, excess tax liability of the assessee had been worked out u/s 143(3) of I T Act as against the refund claim of the assessee as per return of income and hence interest u/s 244A was liable to be withdrawn.

2. In the facts and circumstances of the case, the CIT(A) has erred in concluding that refund and interest u/s 244A had not been granted to the assessee, without appreciating the fact that the AO had passed order u/s 154/143(1) on 17.1.2011

3. In the facts and circumstances of the case, the CIT(A) has erred in concluding that the interest u/s 244A was less than the amount admissible on 17.1.2011 without specifying the defect in calculation made by the AO.

2 ITA No.456/Del/2013 4. In the facts and circumstances of the case, the CIT(A) has erred in law in rejecting the AO's calculations without affording any opportunity to the AO or without even calling for the assessment record.

Relief claimed in appeal As per the grounds of appeal & the order passed by Ld. CIT(A)- XXVIII, New Delhi be quashed."

2. At the outset, Ld. D.R. submitted that Ld. CIT(A) has passed wrong order as after considering additions made u/s 143(3), the refund does not become due to assessee and, therefore, assessee was not entitled to interest u/s 244A of the I. T. Act, 1961.

3. Ld. A.R. on the other hand submitted that the Revenue had given part credit of TDS only vide order dated 17.01.2011 on an application filed by assessee u/s 154 of the Act. Ld. A.R. further submitted that had this mistake which was apparent from record, was not made by Revenue, the assessee was duly entitled to refund and consequent interest u/s 244A. He heavily relied on the order of Ld. CIT(A).

4. We have heard rival parties and have perused the material on record. We find that the assessment was completed u/s 143(1) on 10.11.2009 by which a demand of Rs.13,68,110/- was raised. The above demand was created because the assessee was not given credit of TDS amounting to Rs.53,93,099/- which the Revenue has given vide rectification order dated 17.01.2011 and in this rectification order interest u/s 244A amounting to Rs.7,28,807/- was allowed. However, such interest was withdrawn vide rectification order date 10.08.2011 against which appeal was filed before Ld. CIT(A) and he granted the relief by holding as under:

"I have considered the grounds raised in appeal and the submissions made by the appellant. It is apparent from the ITR that the appellant 3 ITA No.456/Del/2013

has paid TDS of Rs.6757856/- and claimed refund of Rs.4287114/-. As per provisions of Section 143(1)(e) after processing the return the refund due to the assessee in pursuance of the determination of Income under clause (c) of Section 143(1) the refund due to the assessee is to be granted to the assessee. The provision for processing and consequent grant of refund due as per return of Income subject to the adjustments provided under Section143(1) is obligatory under the law. In this case keeping in View the TDS of Rs.6758056/-, the Interest on the amount of refund admissible was also to be granted. On the refund due U/s 143( 1) the Interest as allowed at Rs. 728807/ - vide order U /s 154 dt. 17.01.2011 was due in view of the provisions of section 143(1)(e). This amount of the TDS and resultant refund was not granted while passing the order U/s 143(1) 10.11.2009. However, the same being admissible was taken into account while passing the order U/s 154 (of order U/s 143(3) dt. 17.01.2011). Thus the refund claim U/s 143(1) was pending. Thus the Interest granted vide order dt. 17.01.2011 at Rs. 7288071- is less than the amount admissible to the assessee. The withdrawal of the same vide order dt. 10.08.2011 is incorrect. Further as no refund U/s 143(1) was actually given to the assessee vide order U/s 143(1) dt. 10.11.2009, the charge of Interest U/s 234D at Rs. 300955/ - is incorrect.

Accordingly, I hold that the appellant is eligible for interest u/s 244A on the entire amount of TDS. The Assessing officer is directed to calculate interest u/s 244A and 234D after verification of the TDS certificates filed in original (as claimed by the appellant), in accordance with law and as per provisions of the Act. Appeal on both the grounds is allowed. In the result, the appeal is allowed."

5. We find that the order of Ld. CIT(A) is quite exhaustive and, we do not find any infirmity in the above order, therefore, appeal filed by Revenue is dismissed.

6. Order pronounced in the open court on 13th Feb., 2015.

Sd./- Sd./- (C. M. GARG ) (T.S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER Date: 13th Feb., 2015 Sp 4 ITA No.456/Del/2013

Copy forwarded to:- 1. The appellant 2. The respondent 3. The CIT 4. The CIT (A)-, New Delhi.

5. The DR, ITAT, Loknayak Bhawan, Khan Market, New Delhi. True copy.

By Order

(ITAT, New Delhi).

S.No. Details Date Initials Designation 1 Draft dictated on 11/2 Sr. PS/PS 2 Draft placed before author 12,12, Sr. PS/PS Draft proposed & placed before the 3 JM/AM Second Member Draft discussed/approved by Second 12/2 4 AM/AM Member 5 Approved Draft comes to the Sr. PS/PS 13/2 Sr. PS/PS 6 Kept for pronouncement 13/2 Sr. PS/PS 7 File sent to Bench Clerk 13/2 Sr. PS/PS Date on which the file goes to Head 8 Clerk 9 Date on which file goes to A.R. 10 Date of Dispatch of order