Twenty First Century Finance Ltd, New ... vs Assessee

M/s Twenty First Century Finance Ltd., Vs. ACIT, H-1, Zamrudpur Community Centre, Company Circle 3(6), Kailash Colony, New Delhi. New Delhi.

(Appellant) (Respondent)

Assessee By : Shri Salil Agarwal, Advocate, Shri Gautam Jain & Shri Shailesh Gupta, CAs. Department By : Shri J.P. Chandrakar, Sr. DR

Date of Hearing : 25.02.2015 Date of Pronouncement : .02.2015

ORDER PER R.S. SYAL, AM:

This appeal by the assessee is directed against the order passed by

the CIT(A) on 20.3.2008 in relation to the assessment year 1997-98. ITA No.2148/Del/2008

2. It is a recalled matter inasmuch as the earlier order passed by the

Tribunal on merits on 3rd July, 2009 came to be recalled vide its later

order dated 9th October, 2013 for the disposal of ground nos. 3-5.5 of the

appeal.

3. Briefly stated, the facts of the case are that the ld. CIT(A) passed

the impugned order dismissing the appeal in limine not condoning the

delay. The assessee in its appeal before the Tribunal challenged the

action of the ld. CIT(A) in treating the appeal as time barred through

ground Nos.1 and 2. The merits were challenged before the tribunal

through ground nos.3-5. The Tribunal dismissed the assessee's appeal

on merits by holding that it was liable to pay interest u/s 201(1A) of the

Income-tax Act, 1961 (hereinafter called 'the Act'). Now, with the

recalling of the Tribunal order in respect of ground nos. 3-5, the position

which emerges is that the decision on merits earlier given against the

assessee is recalled and the question of time barred appeal having been

filed before the ld.CIT(A) stands impliedly decided in favour of the

2 ITA No.2148/Del/2008

assessee. Now we have to dispose of ground no. 3 to 5 of the appeal

afresh.

4. It can be seen that the impugned order passed by the ld. CIT(A)

emanated from the order passed by the AO u/s 201(1A) of the Act

passed on 17.2.1997 in relation to the Financial year 1996-97. The AO

observed in this order that there was a failure on the part of the assessee

in terms of section 194A. Such failure related to the Financial years

1993-94 and 1994-95 in which the assessee deducted tax at source, but,

either did not deposit or late deposited the same. That is how, it was

treated as a case of continuation of default in respect of interest u/s

201(1A) pertaining to the defaults occurring in the Financial years 1993-

94 and 1994-95, for which the assessee was saddled with a liability of

Rs.57,57,128/-. This order was passed by the ACIT, Company Circle

3(6), New Delhi. The contention of the assessee is that this order passed

on 17.2.1997 was never sent to the assessee. It was only on 28.12.2006,

when certain recovery proceedings were taken up against the assessee

that a copy of this order was supplied.

3 ITA No.2148/Del/2008

5. At this stage, we want to mention that DCIT (TDS) passed an

order on 24.1.2000 noting that there was failure on the part of the

assessee in terms of section 194A relating to financial year 1993-94. As

per this order, total interest liability u/s 201(1A) was determined at

Rs.44,01,699/- relating to the period from the date of default till the

passing of order in January, 2000. A copy of this order is available on

pages 28-33 of the paper book. It can be seen from this order that in

respect of defaults committed on 31.3.1994, the assessee has been

subjected to interest u/s 201(1A) for a period of default of 70 months.

Thus, it is evident that such a charging of interest started from 31.3.94

and ended up to the year 2000, which covers Financial year 1996-97, in

respect of which the present proceedings are underway before us. The

assessee preferred appeal against the order passed by the DCIT, TDS, on

24.1.2000 before the ld. CIT(A) relating to assessment years 1994-95,

1995-96 and 1996-97. Such appeals were dismissed by the ld. CIT(A)

vide his order dated 5.3.2001, a copy of which is available on pages 1

onwards of the paper book. The assessee preferred further appeal before

the Tribunal against the CIT(A)'s order dated 5.3.2001. Such appeal 4 ITA No.2148/Del/2008

was dismissed by the Tribunal vide its order dated 25.7.2008, a copy of

which is available on pages 58 onwards of the paper book. The assessee

approached the Hon'ble Delhi High Court against the Tribunal order

dated 25.7.08. The Hon'ble High Court vide its judgment dated

8.11.2010, a copy of which is available on pages 1 to 5 of the second

paper book, remitted the matter to the CIT(A) for a fresh adjudication.

Pursuant to this judgment of the Hon'ble Delhi High Court, the ld.

CIT(A) passed an order on 15.9.2011, a copy of which is available on

pages 9-25 of the paper book. The ld.CIT(A) after noticing the

judgment of the Hon'ble Supreme Court in the case of Hindustan Coca

Cola Beverages Ltd. Vs. CIT, 293 ITR 226 (SC) held that the assessee

cannot be treated in default u/s 201(1) and (1A) to the extent of taxes

deposited by the payee companies. He sent the matter back to the AO

for re-computing interest u/s 201(1A) from due date or end of the

financial year till the date of payment of taxes by the deductees, being

the filing of returns by the payee companies. The Revenue preferred

appeal against this order of the ld. CIT(A). The Tribunal vide its order

dated 7.12.2012, a copy of which is available on pages 6-8 of the 2nd 5 ITA No.2148/Del/2008

paper book, dismissed the appeals filed by the Revenue, thereby

upholding the view taken by the ld.CIT(A) on the question of charging

of interest u/s 201(1A).

6. From the above narration of facts, it is clear that the subject matter

of the present appeal is the assessee's liability to pay interest u/s

201(1A) for the financial year 1996-97 for which the order was passed

by the AO on 17.2.1997. It is observed that the DCIT (TDS) passed

order on 24.1.2000 for the years including Financial year 1996-97,

which is the subject matter of the present appeal. It, therefore, transpires

that two orders have been passed by the income-tax authorities in respect

of the same assessment year and for the same default, viz., one on

17.2.1997 and the other on 24.1.2000. Since the proceedings from the

assessment order dated 24.1.2000 have attained finality inasmuch as the

issue has travelled up to the Hon'ble High Court and pursuant to the

direction so given, the ld. CIT(A) has passed the consequential order, we

cannot go ahead with the proceedings arising out of the earlier order

passed by the AO on 17.2.1997. Since the proceedings out of this order

6 ITA No.2148/Del/2008

have merged into the order passed by the DCIT (TDS) on 24.1.2000, the

former order automatically becomes irrelevant and non-sustainable.

There can be no question of any recovery emanating from this order

dated 17.2.1997, as two orders on one point for the same year cannot

stand. We, therefore, hold that the assessee cannot be treated separately

as in default out of the proceedings emanating from the order passed by

the AO on 17.2.1997. The proceedings arising out of the order passed

by the DCIT (TDS) on 24.1.2000 have been separately going on, which

will take care of the liability in respect of interest u/s 201(1A) for the

financial year 1996-97, if any. Resultantly, the proceedings flowing out

of the order passed by the AO on 17.2.1997 are hereby set aside.

7. In the result, the appeal is allowed.

The order pronounced in the open court on 27.02.2015.

Sd/- Sd/- [I.C. SUDHIR] [R.S. SYAL] JUDICIAL MEMBER ACCOUNTANT MEMBER

Dated, 27th February, 2015. dk 7 ITA No.2148/Del/2008

Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT (A) 5. DR, ITAT

AR, ITAT, NEW DELHI.

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