TMI Blog2011 (7) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... once an error is found that can always be directed to be corrected - Decided against the assessee - ITA No.179 of 2009 - - - Dated:- 11-7-2011 - MR. JUSTICE A.K. SIKRI, MR. JUSTICE M.L. MEHTA, JJ. For Appellant : Mr. C.S. Aggarwal, Sr. Advocate with Mr. V.P. Gupta, Advocate. For Respondent: Mr. Sanjeev Sabharwl, Sr. Stadning Counsel. A.K. SIKRI, J. 1. This appeal was admitted on the following questions of law: 1. Whether the Tribunal was correct in law in issuing directions to the AO to recalculate the amount of refund, which refund had been allowed to the assessee on the basis of an order passed under Section 254/143(3) dated 25.02.2004/28.06.2004, which order had become final and was also not the subject matter of appeal before it? 2. Whether the directions given in order in para 20 were necessary and did not amount to setting up a new case, which case was not set up in the order made u/s 154 of the Act and was the subject matter of appeal? 2. The questions of law as formulated while clearly demonstrate that a very limited issue, in a narrow compass, arises in this appeal preferred by the appellant/assessee. Challenging a portion of the order pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f refunds/payments. The matter, on merits, was, however, taken in appeal before the Tribunal which appeal was disposed of vide orders dated 17.09.2002. 3. The Tribunal disposed of this appeal on 17.09.2002 directing the AO to assess the interest of ₹ 2,69,84,301/- in the Assessment Year 1993-94. We may note here that the present controversy has arisen while giving effect to this order passed by the Tribunal. 4. The AO passed orders dated 25.02.2004 under Section 254/143(3) of the Act giving effect to the aforesaid order of the Tribunal. As per this order, a total income is assessed with Rs.9360/- and tax relief was given calculating the amount refundable to the assessee at Rs.2,26,40,638/-. Interest on this refundable amount was also calculated and arrived at Rs.2,37,76,490/- thereby showing a sum of Rs.4,64,09,202/- as a total refundable income. As pointed out above, in the revised return filed by the assessee on 13.09.1993, it had filed TDS certificate of Rs.60,15,566/-. This certificate pertains to the aforesaid interest income and when the interest income was found relatable to the Assessment Year 1993-94, the assessee was naturally not entitled to TDS credit of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Department made fresh demands and the assessee repaid within time the taxes as assessed and demanded. The Department demanded interest under Section 220(2) of the Income Tax Act, 1961, on the tax assessed for the period commencing from the date of refund of the tax upon the appellate order till the date the taxes were finally paid after disposal of the reference. The assessee filed writ petitions in the High Court challenging the demand of interest, contending that it was not in default because it had paid the taxes in compliance with the original notices of demand and it had not failed to comply with the demand and it had not failed to comply with the demand made under Section 156. The High Court dismissed the writ petitions holding that Section 3(2) of the Taxation Laws (Continuation and Validation of Recovery Proceedings) Act, 1964, kept alive the earlier demand notices even though payment in full had been made pursuant thereto and treated those earlier notices as having been kept alive till the assessment orders were upheld by the higher forum. On appeals to the Supreme Court: Held, reversing the decision of the High Court, (i) that the condition precedent under section 220 was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r as this challenge is concerned, the Tribunal has not accepted the contention of the Revenue and has affirmed the order on this ground. 10. At the same time, the Tribunal also found that once charging of interest under Section 220(2) of the Act is held to be invalid, the issue relating to withdrawal of credit of TDS allowed in the Assessment Year 1992-93 hangs in the air. These observations came to be passed as in the light of discussion by the Tribunal, in the earlier part of the order dealing with the contention of the Revenue that while giving effect to the order of Tribunal, the AO had prepared two ITNS-150, instead of one. If he had prepared one ITNS-150, the demand by way of reversal of refund on account of credit for TDS shifted to Assessment Year 1993-94 would have been first adjusted from the refund of Rs.2,26,40,638/- and interest under Section 244A would have been computed on the balance refund payable to the assessee. Therefore, the assessee was eligible for lesser refund on account of interest under Section 244A of the Act. It was pointed out that as a result of deleting interest under Section 220(2) of the Act, the assessee had got more refund than what was legit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , these two income tax computations forms one for refund due to and other for amount payable by the assessee cannot be seen in isolation of each other. They are complementary to each other and to be read together. For this conclusion, the Tribunal referred to the judgment of the Supreme Court in the case of Kalyankumar Ray Vs. Commissioner of Income Tax [191 ITR 634] holding that that the ITNS-150 Form is a part of assessment proceedings and dealt with the mistake of the AO in the following manner: From the above discussion and the decision of the Hon‟ble Supreme Court in the case of Kalyankumar Ray (supra), it is clear that ITNS-150 forms part of the assessment proceedings. The word assessment‟ is used in the Act in a number of provisions in a comprehensive sense and includes all proceedings starting with the filing of the return or issue of notice and ending with determination of tax payable by the assessee as held by Hon‟ble Supreme Court in the case of S. Sankapa Vs. ITO [1968] 68 ITR 670(SC). The assessing officer in order to rectify the mistake of non-withdrawal of TDS credit in assessment year 1992-93 in order to rectify the mistake of non-withdrawa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ese directions, the Tribunal has exceeded its jurisdiction. 13. This becomes crystal clear from the following analysis of the Tribunal given in para 20 after upholding the deletion of interest charged under Section 220(2) of the Act: 20. However, a balance has to be maintained in the findings made in the order. We have also held that after regular assessment, intimation drawn u/s 143(1)(a) cannot be rectified as the same does not survive. Once charging of interest u/s 220(2) in the second ITNS-150 is held invalid, the issue relating to withdrawal of credit of TDS allowed in assessment year 1992-93 hangs in air. The assessing officer has followed wrong procedure to withdraw refund allowed to assessee by preparing two separate ITNS-150 instead of drawing one consolidated ITNS-150. In consolidated ITNS-150, from the total tax paid by way of TDS and regular payment he should have deducted the amount of refund already granted and on balance refund payable interest u/s 244A should have been paid. This is a procedural lapse on part of assessing officer who can be rectified as per the law. In our view TDS credit (refund) for assessment year 1992-93 can be withdrawn by drawing one ..... X X X X Extracts X X X X X X X X Extracts X X X X
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