Vikrambhai Somabhai Patel, , Ahmedabad vs Assessee

आयकर अपील य अ धकरण, अहमदाबाद यायपीठ 'सी', अहमदाबाद । IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH " C " BENCH, AHMEDABAD सम ी एन.एस.सैनी, लेखा सद य एवं ी कुल भारत, या यक सद य । BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER And SHRI KUL BHARAT, JUDICIAL MEMBER

MA No.167/Ahd/2014 - A.Y. 2007-08 ( in आयकर अपील सं./in I.T.A. No. 62/Ahd/2011 - AY 2007-08)

Shri Vikrambhai Somabhai बनाम/ The ITO, Patel Vs. Ward-2(3) C/o.S L Patel & Co. Ahmedabad Nr.Bank of Baroda Delhi Chakla, Ahmedabad (original appellant) (original respondent) थायी ले खा सं . /जीआइआर सं . / PAN/GIR No. : AEUPP 6088 H (अपीलाथ# /Applicant) .. ($%यथ# / Respondent)

अपीलाथ# ओर से / Applicant by : Shri Ms. Urvashi Shodhan, AR $%यथ# क' ओर से/Respondent by : Shri Roopchand, Sr.DR

ु वाई क' तार*ख / सन Date of Hearing 17/04/2015 घोषणा क' तार*ख /Date of Pronounce ment 29/04/2015

आदे श / O R D E R

PER SHRI KUL BHARAT, JUDICIAL MEMBER :

This miscellaneous application has been filed by the Assessee on 09.10.2014 (arising out of ITA No.62/Ahd/2011 for AY 2007-08) seeking for modification of the order dated 23/05/2014 passed by the ITAT "C" Bench, Ahmedabad.

MA No.167 /Ahd/2014 (in ITA No.62/Ahd/2011 Shri Vikrambhai Somabhai Patel vs. ITO Asst.Year-2007-08 -2-

2. The ground for moving the present application is with regard to ground No.4 raised in ITA No.62/Ahd/2011, wherein the ground was dismissed by the Tribunal as being consequential in nature. The ld.counsel for the assessee reiterated the submissions made in the application. It is contended by the ld.counsel for the assessee that during the course of hearing, it was argued that interest on any shortfall of advance tax or self assessment tax arising due to amendment introduced subsequent to filing return of income is not chargeable since the applicant is prevented by reasonable cause not to take into account the amended provisions. In support of this contention, the ld.counsel for the assessee placed a reliance on the decision of the Coordinate Bench (ITAT "B" Bench Ahmedabad) in the case of Intas Exports vs. ACIT in ITA Nos.1819 & 1820/Ahd/2008 for AYs 2003-04 & 2004-05 respectively, dated 30/07/2010.

2.1. On the contrary, ld.Sr.DR submitted that there is no error or mistake is pointed out by the ld.counsel for the assessee as there is no error in the order sought for to be modified. Therefore, there is no reasonable ground for modification of the Tribunal's order dated 23/05/2014(supra).

MA No.167 /Ahd/2014 (in ITA No.62/Ahd/2011 Shri Vikrambhai Somabhai Patel vs. ITO Asst.Year-2007-08 -3-

3. We have heard the rival submissions and perused the material available on record. We find that the assessee had raised the ground No.4 in ITA No.62/Ahd/2011, which reads as under:-

"4. Levy of interest u/s.234B of the Act is not justified"

3.1. The Tribunal while passing the order in ITA Nos.1819 & 1820/Ahd/2008 held that levy of interest u/s.234B of the Act is consequential in nature. The ld.counsel for the assessee has heavily placed reliance on the decision of the Coordinate Bench rendered in the case of Intas Exports vs. ACIT (supra). In ITA No.1819/Ahd/2008 the ground No.8 is with regard to levy of interest u/s.234B of the Act. The Hon'ble Coordinate Bench has decided the issue in paras-7 to 8 of its order by observing as under:-

"7. Ground No.8 for Assessment Year 2003-04 and Ground No.9 for Assessment Year 2004-05 are in respect of charging of interest u/s.234B and 234C of the I.T. Act, 1961.

7.1. In this regard, the vehement contention was that the effect of the amendment was the reason for charging of interest on short payment of tax either advance tax or self assessment. The Learned Authorised Representative of the assessee further vehemently contested that the proviso inserted by the Taxation Laws (Amendment) Act, 2005 were after the filing of the return in the year 2003 and 2004 respectively. Therefore, the assessee was prevented by reasonable and sufficient cause not to take into account the amended provisions of the I.T. Act, 1961. It was, further contested that though the amendment took place in the year 2005, but it was with retrospective effect from 01/04/1998, therefore, these two assessment years had also come within the ambits MA No.167 /Ahd/2014 (in ITA No.62/Ahd/2011 Shri Vikrambhai Somabhai Patel vs. ITO Asst.Year-2007-08 -4-

of the amended provisions. In support of the argument, Learned Authorised Representative of the assessee has also placed on record a copy of Circular of CBDT bearing No.2/2006 dated 17/01/2006 which had explicitly mentioned that section 80HHC is to be read with section 28 of the I.T. Act, 1961 in the light of the amendment of Taxation Law (Amendment) Act, 2005. The Board has directed that the demand so created should be recovered over a period of five years. In support of this, a reliance on the decision of Hon'ble ITAT Delhi Bench "B" in the case of Eastman Industries Ltd. vs. Dy.CIT reported as (2009) 120 ITD 362 (Delhi) has been placed. An another decision of Respected Co-ordinate Bench "A" Ahmedabad in the case of M/s.Polyset Products Private Limited vs. The Jt.CIT bearing ITA No.1650/Ahd/2002 (By assessee) & ITA No.1958/Ahd/2002 (By Revenue) for Assessment Year 1998-99 order dated 28/09/2006 and Sun Petrochemicals Pvt.Ltd. (ITA No.1010/Ahd/2009 dated 05/06/2009 has also been cited in support of the aforesaid claim of non-charging of interest u/s.234-B & 234-C of the I.T. Act, 1961.

8. On hearing the rival submissions, we find force in the arguments of Learned Authorised Representative of the assessee because the assessee was not aware of the forthcoming amendments, therefore, short payment of tax was made, however, the said default for which the interest u/s.234B & 234C was charged could not be attributable to the assessee. We, therefore, direct the Assessing Officer to re-calculate the charge of interest under these two sections only after excluding the quantum of the disallowance discussed hereinabove."

3.2. In the light of the above decision of the Coordinate Bench, we hereby recall the Tribunal's order dated 23/05/2014 passed in ITA No.62/Ahd/2011 for AY 2007-08 and direct the Registry to fix the assessee's appeal in ITA No.62/Ahd/2011 for AY 2007-08 for a limited purpose of deciding ground No.4 in respect of charging of interest MA No.167 /Ahd/2014 (in ITA No.62/Ahd/2011 Shri Vikrambhai Somabhai Patel vs. ITO Asst.Year-2007-08 -5-

u/s.234B of the Act in due course. Accordingly, notice be issued to both the parties.

4. In the result, the miscellaneous application filed by Assessee is disposed of as discussed hereinabove.

Order pronounced in the Court on Wednesday, the 29th day of April, 2015 at Ahmedabad.

Sd/- Sd/- (एन.एस.सैनी) (कुल भारत) लेखा सद य या यक सद य ( N.S. SAINI ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 29/ 04 /2015

ट*.सी.नायर, व. न.स./T.C. NAIR, Sr. PS आदे श क !त#ल$प अ%े$षत/Copy of the Order forwarded to : 1. अपीलाथ# / The Applicant. 2. $%यथ# / The Respondent. 3. संबं4धत आयकर आयु6त / Concerned CIT

4. आयकर आयु6त(अपील) / The CIT(A)-XVI, Ahmedabad

5. 7वभागीय $ त न4ध, आयकर अपील*य अ4धकरण, अहमदाबाद / DR, ITAT, Ahmedabad

6. गाड; फाईल / Guard file.

आदे शानुसार/ BY ORDER,

स%या7पत $ त //True Copy// उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील य अ धकरण, अहमदाबाद / ITAT, Ahmedabad