TMI Blog2008 (7) TMI 454X X X X Extracts X X X X X X X X Extracts X X X X ..... of the case and in law, the CIT(A) has erred in directing the AO to allow proportionate credit of TDS of Rs. 68,98,588 in either asst. yr. 1992-93 or in asst. yr. 1993-94." 4. First, we take up the appeal for asst. yr. 1992-93. In order to decide the controversy on charging of interest under s. 220(2) of the Act, it will be necessary to know the sequence of events out of which the present appeal has arisen. The assessee filed return of income for asst. yr. 1992-93 on 30th Dec, 1992 declaring income at nil. The AO processed the return of income under s. 143(1)(a) on 29th June, 1993 and allowed refund for TDS of Rs. 8,83,022 and interest thereon under s. 244A of Rs. 1,32,458 aggregating to Rs. 10,15,480. Thereafter, the assessee filed a revised return on 13th Sept., 1993 along with another set of TDS certificates amounting to Rs. 60,15,566. This return of income was also processed under s. 143(1)(a) on 30th March, 1994 allowing refund of Rs. 64,36,655 which included interest under s. 244A of Rs. 4,21,089. Thus, the assessee was allowed refunds on two occasions i.e. on 29th June, 1993 and 30th March, 1994 aggregating to Rs. 74,52,135 (10,15,480 + 64,36,655) on account of TDS and in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erest income of Rs. 2,69,84,301 was assessed in asst. yr. 1993-94, but credit for TDS relating to this income continued to be allowed by the AO in asst. yr. 1992-93. As per the provisions of s. 199 of the Act, the credit for the TDS was to be allowed in the year in which such income was assessable to tax. Addl. CIT, Range-11 Delhi, accordingly, directed the AO to withdraw the credit of TDS of Rs. 68,98,588 in asst. yr. 1992-93 and allow the same in asst. yr. 1993-94. 8. Thereafter, the AO issued notice under s. 154 to amend order passed under s. 143(1)(a) for asst. yr. 1992-93 dt. 30th March, 1994 to which the assessee had no objection provided interest was properly charged /allowed. The AO passed order under s. 154 withdrawing TDS credit from asst. yr. 1992-93 vide order dt. 28th June, 2004. However, the office of the AO prepared two sets of ITNS-150 even dt. 28th June, 2004, one ITNS-150 (referred as first) for allowing refund for tax paid at Rs. 2,26,40,638 which included an amount of Rs. 654,36,655 on account of TDS refund adjusted. The AO computed interest under s. 244A of Rs. 2,37,76,490 and worked out refundable amount of Rs. 4,64,09,202. The other ITNS-150 (referred as se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f interest under s. 244A of the Act. He further submitted that as a result of deleting interest under s. 220(2) of the Act by the learned CIT(A), the assessee has got more refund than what was legitimately due to it. Revenue cannot be made to suffer because of the mistake committed by AO in making two separate ITNS-150, for single order passed under s. 154 of the Act. 12. On the other hand, the learned Authorised Representative of the assessee submitted that the AO has passed two separate orders, one under s. 254/143(3). dt. 25th Feb., 2004 to give effect to the order of the Tribunal and another under s. 154/143(1)(a) dt. 28th June, 2004 to rectify intimation earlier issued. The subject-matter of appeal before the learned CIT(A) and the Tribunal is the order passed under s. 154/143(1)(a) of the Act. Since there were two separate orders and the AO had separately determined refund/demand pursuant thereto, it cannot be now contended by Revenue that the AO should not have calculated interest on demand created on withdrawal of TDS credit and the same could have been set off against each other and interest should have been calculated only on the net amount. He has further submitted tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... although has deleted the addition, but given the directions to assess the same in the asst. yr. 1993-94 as income from other sources. It is, therefore, proposed to withdraw the credit for TDS amounting to Rs. 68,98,588 from asst. yr. 1992-93 and allow the same in the asst. yr. 1993-94." 14. From the plain reading of the said notice, it is clear that AO intended to amend intimation dt. 30th March, 2004 in order to withdraw the credit for TDS amounting to Rs. 68,98,588 from asst. yr. 1992-93 and allow the same in the asst. yr. 1993-94. The assessee gave no objection to proposed rectification of order under s. 143(1)(a) subject to the condition that interest was properly charged/allowed. Therefore, the assessee agreed for payment of interest on demand and right to receive interest on refunds as per the provisions of law. The AO in order dt. 28th June, 2004 has specifically stated that in order passed on 25th Feb., 2004 under s. 254/143(3), the credit for TDS amounting to Rs. 68,98,588 on the interest income was wrongly allowed although the interest income on which aforementioned TDS was deducted was reduced from income for asst. yr. 1992-93. The AO after discussing the provisions o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the return and accompanying documents can do only obvious corrections and he has no power to enter into debatable issues. If some relief can be granted on the basis of the information given in the return that may be granted and if some relief on the basis of the information furnished in the return, is not admissible, then that may be disallowed and more than that nothing can be done by the AO. In connection, the CBDT issued Circular No. 549 [[1990) 82 CTR (St) 1 : [1990] 182 ITR (St) 1], dt. 31st Oct., 1989. The circular points out, inter alia, that under the new scheme for assessment, the requirements of passing an assessment order in all cases where returns of income are filed, has been dispensed with and the issue of an acknowledgment slip to the assessee will be the end of the matter, if he had correctly paid tax and interest, if any, due on the basis of the return, but if on the basis of the return, any amount is found due from the assessee, it can be recovered and if any refund is due to the assessee, it can be granted without passing an assessment order. The assessment order will be passed only in a very limited number of cases, selected for scrutiny. 15.1 Where a retur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a adjustment which could be made on basis of record available to AO which is filed by assessee along with return. Since notice under s. 143(2) is a notice of regular assessment, a notice under s. 143(2) could be issued even after intimation under s. 143(1)(a) but no intimation could be issued under s. 143(1)(a) after issuance of notice under s. 143(2). 16.2 The views expressed by Hon'ble Gujarat High Court in the case of Lakhanpal National Ltd. and Hon'ble Calcutta High Court stand fortified by the decision of Hon'ble Supreme Court in the case of CIT v. Gujarat Electricity Board [2003] 181 CTR (SC) 28 : [2003] 260 ITR 84 (SC) as explained in the following words : "There is no dispute that s. 143(1)(a) of the Act enacts a summary procedure for quick collection of tax and quick refunds. Under the scheme if there is a serious objection to any of the orders made by the AO determining the income, it is open to the assessee to ask for rectification under s. 154. Apart therefrom, the provisions of s. 143(1)(a)(i) indicate that the intimation sent under s. 143(1)(a) shall be without prejudice to the provisions of sub-s. (2). The legislature, therefore, intended that, where the summary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontaining the computation of tax, though there was no form prescribed for the assessment of the income. This sub-rule was dropped in 1964. Thereafter, the matter has been governed by the Departmental instructions. Under these, two forms are in vogue. One is the form of what is described as 'assessment order' [IT-30 or ITNS-65]. The other is what is described as the 'Income-tax computation form' or 'form for assessment of tax/refund' (ITNS-150). The practice is that, after the 'assessment order' is made by the ITO, the tax is calculated and the necessary columns of ITNS-150 are filled up showing the net amount payable in respect of assessment year. This form is generally prepared by the staff, but it is checked and signed or initialed by the ITO and the notice of demand follows thereafter. The statute, does not, in terms, require the service of the assessment order or the other form on the assessee and contemplates only the service of the notice of demand. It seems that while the 'assessment order' used to be generally sent to the assessee, the other form was retained on the file and a copy occasionally sent to the assessee. ITNS-150 is also a form for determination of tax payable a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lementary to each other and will constitute part and parcel of order passed under s. 154 on 28th June, 2004. The order passed under s. 154 on 28th June, 2004, thus, will be rectification of order dt. 25th Feb., 2004 passed under s. 254/143(3) giving effect to the order of Tribunal. 18. In view of above discussion, we are unable to accept the contention of learned Authorised Representative of the assessee that AO has passed two orders i.e. one on 25th Feb., 2004 giving effect to the order of Tribunal and other on 28th June, 2004 rectifying intimation dt. 30th March, 1994. As held above, the order passed under s. 154 on 28th June, 2004, is nothing but the rectification of order dt. 25th Feb., 2004 passed under s. 254/143(3) giving effect to the order of Tribunal. 19. Now, coming to the issue relating to chargeability of interest under s. 220(2), no doubt interest under this section can be charged if there is a demand notice and there should be a default in paying the amount so demanded within the time stipulated in the notice. In principle learned CIT(A) is correct in holding that interest under s. 220(2) is chargeable when an assessee is in default for payment of tax specified i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thdrawing TDS credit in asst. yr. 1992-93 and allowing refund of correct amount of tax paid and interest thereon under s. 244A of the Act. 21. Before we part with the matter, in asst. yr. 1992-93, the Revenue raised additional grounds of appeal to be admitted. The additional ground of appeal taken by the Revenue was dismissed by a separate order dt. 27th May, 2008 after hearing both the parties for the reasons that the same did not arise out of order of CIT(A) and was vague in nature and required investigation of facts. 22. As regards the appeal filed by the Revenue for asst. yr. 1993-94, it relates to the direction given to AO to allow credit of TDS in the year to which the income assessable to tax. There is nothing wrong in the direction given by the learned CIT(A). Perhaps, confusion has been created in the manner in which the said direction was given. There is no dispute that under s. 199 of the Act, the credit of TDS will be allowed in the year in which such income is assessable to tax. The AO is directed to allow credit of TDS in the assessment year in which the amount on which tax deducted has been assessed. 23. In the result, the appeal filed by the Revenue for asst. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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