TMI Blog2014 (8) TMI 157X X X X Extracts X X X X X X X X Extracts X X X X ..... he opening and the closing value of the investment and the bulk of the tax exempt income arising by way of interest on tax-free bonds – Revenue ought to have required the assessee to substantiate its claim of the working of suo motu disallowance u/s.14A with reference to its accounts, and which would include the underlying vouchers as well –relying upon Godrej & Boyce Mfg. Co. Ltd. v. Dy. CIT [2010 (8) TMI 77 - BOMBAY HIGH COURT] – the matter is remitted back to the Ao for fresh adjudication – Decided in favour of Assessee. - I.T.A. Nos. 2726, 2727 & 2729/Mum/2013 - - - Dated:- 23-7-2014 - Shri Sanjay Arora, AM And Dr. S. T. M. Pavalan, JM,JJ. For the Appellant : Shri K. K. Ved Ms. I. A. Singh For the Respondent : Shri Satyanarayan Raju ORDER Per Sanjay Arora, A. M. This is a set of three Appeals by the Assessee, i.e., for three years, being assessment years (A.Ys.) 2001-02, 2002-03 2009-10, arising out of separate Orders by the Commissioner of Income Tax (Appeals)-13, Mumbai ( CIT(A) for short) of even date (01.01.2013), partly allowing the assessee s appeals contesting its assessments u/s.143(3) r/w s. 254 of the Income Tax Act, 1961 ( the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 113 ITD 719 (Del) (SB). The Revenue having not carried the matter in further appeal, the Assessing Officer (A.O.) was obliged not to charge interest u/s.234D while passing the appeal-effect giving order u/s.143(3) r/w s. 254 on 29.11.2010. The retrospective amendment in law, as afore-referred, came only subsequently, i.e., per FA, 2012. The ld. CIT(A), before whom this specific issue was raised by the assessee in appeal, i.e., the levy of interest u/s.234D despite it having been cancelled by the tribunal (per Gd. No. 6 before him), did not address the same, but merely confirmed the said levy in view of the retrospective amendment, since affirmed by the hon ble high court in Indian Oil Corpn. Ltd. (supra). Could an order be possibly challenged by not giving effect thereto, as done by the A.O.?, the ld. Authorized Representative (AR) would asseverate before us, and which in his opinion was the moot question arising before us in-as-much as the assessment order and the appellate order (in the first round) merged with that by the tribunal qua the said matter/s of appeal. 2.2 The Revenue s stand, on the other hand, was that the levy stood upheld by the ld. CIT(A) not on the basis of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unal in the assessee s own case, the A.O. s order is, to that extent, bad in law. The law is not remedy-less, and the recourse to be followed is again to be found and pursued within the frame-work of law. The assessee could move the hon ble high court under its writ jurisdiction for quashing the levy of interest. It could move the A.O. u/s.154, requiring him to rectify the order giving appeal effect, being inconsistent with the clear direction by the tribunal. It could prefer an appeal, as it actually does, against the said order. It could move the tribunal to stay the operation of the order, i.e., to that extent, in-as-much as the said order is in clear breach and violation of its direction. It could even seek its (tribunal s) indulgence to refer contempt of court proceedings to the hon ble high court. The assessee, in adopting the appellate process, followed one of the permissible remedies available in law, which are not mutually exclusive. However, by the time the first appellate authority came to decide the matter, the law itself had changed, with retrospective effect, rendering the levy of interest u/s.234D, as made, good in law. The ld. CIT(A) was bound to take cognizance of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terest under the Act cannot be appealed against, being the compensatory and mandatory, except where the assessee limits himself to the ground that he is not liable to the levy at all, and which is not so in the instant case. The assessee s appeal, in view of the admitted legal position of interest u/s.234D being chargeable, is thus not maintainable in law. As regards its quantum, the assessee has not brought any material on record to show that it has communicated with the Department in the matter, and which has declined to or not cooperated with it in the matter of furnishing the requisite information, which the assessee is well entitled to. There is also, on the basis of the material on record, nothing to suggest of the assessee having moved an application u/s.154, submitting its working of interest, seeking rectification for the difference, if any. In other words, no prima facie case for our indulgence is also made out. Under the circumstances, we decline to. The assessee is at liberty to adopt the course permissible in law; we having already unequivocally expressed it s entitlement to the relevant details, being in fact a part of its assessment (refer: ITO vs. Kalyankumar Ray ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tors, may require decision making at, and thus involvement, of the higher management, entailing incurring cost. In fact, as we observe, there is not much difference between the opening and the closing value of the investment and, two, the bulk of the tax exempt income arising by way of interest on tax-free bonds. The Revenue, in our view, ought to have required the assessee to substantiate its claim of the working of suo motu disallowance u/s.14A with reference to its accounts, and which would include the underlying vouchers as well. The A.O., upon making such enquiry as he deems fit and proper in the matter, is to form his opinion, expressing his satisfaction or dissatisfaction, as the case may be, in the matter. This examination and process, as apparent, has not been undertaken, which, as explained by the hon ble jurisdictional high court in the case of Godrej Boyce Mfg. Co. Ltd. v. Dy. CIT [2010] 328 ITR 81 (Bom), is mandatory, forming, in fact, part of both, the law - per section 14A, which is a complete code in itself, as well as the delegated legislation in the form of rule 8D. We, accordingly, restore this matter back to the file of the A.O. to allow the assessee an opport ..... X X X X Extracts X X X X X X X X Extracts X X X X
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