Dismissed

M/S.State Bank of Travancore v. Chief Commissioner of Income Tax

Kerala HC14 Mar 2018RP/369/2017

Case brief

AI extract

What is this about?

This Review Petition challenged a judgment denying interest under Section 244A of the Income-tax Act due to delay in correcting TDS certificate defects. The Court examined if a previous Division Bench ruling supporting the Revenue was applicable to distinguish the facts of the current case before dismissing the petition.

What the court decided

AI extract

M/S.State Bank of Travancore Vs Chief Commissioner of Income Tax — Income Tax | Kerala HC (2018)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT:

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THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE

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WEDNESDAY, THE 14TH DAY OF MARCH 2018 / 23RD PHALGUNA, 1939

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RP.No. 369 of 2017 IN WPC. 19283/2007

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REVIEW PETITIONER/PETITIONER

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M/S.STATE BANK OF TRAVANCORE HEAD OFFICE, POOJAPPURA, TRIVANDRUM-695012, REPRESENTED BY ITS DEPUTY GENERAL MANAGER (FINANCE AND ACCOUNTS)

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BY ADVS.SRI.A.KUMAR SMT. G.MINI(1748)

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RESPONDENTS/RESPONDENTS:

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1. CHIEF COMMISSIONER OF INCOME TAX

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AYAKAR BHAVAN, THIRUVANANTHAPURAM-695003.

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2. ASSISTANT COMMISSIONER OF INCOME TAX

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CIRCLE (I), THIRUVANANTHAPURAM-695003.

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3. DEPUTY COMMISSIONER OF INCOME TAX (ASSESSMENT) SPECIAL RANGE, THIRUVANANTHAPURAM.

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4. THE CENTRAL BOARD OF DIRECT TAXES DEPARTMENT OF REVENUE, MINISTRY OF FINANCE,

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GOVERNMENT OF INDIA, NEW DELHI-110001.

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BY SRI.JOSE JOSEPH, SC, FOR INCOME TAX

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THIS REVIEW PETITION HAVING BEEN FINALLY HEARD ON 24-01-2018,THE COURT ON 14/03/2018 PASSED THE FOLLOWING:

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RP NO.369/2017 IN WPC NO.19283/2007

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APPENDIX

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REVIEW PETITIONER'S EXHIBITS

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ANNEXURE A: CERTIFIED COPY OF THE JUDGMENT DATED 23.09.2016 IN WRIT PETITION NO.19283 OF 2007.

//True Copy//

PS to Judge

A.M.SHAFFIQUE, J

ORDER

This review petition has been filed seeking to review the judgment dated 23.9.2016 in W.P.(C).No.19283 of 2007 inter alia contending that an earlier judgment of a Division Bench of this Court with reference to the very same subject matter could not be placed when the matter was heard. Learned counsel for the petitioner relies on Commissioner of Income-tax, Thiruvananthapuram v State Bank of Travancore [2014] 42 taxmann.com 572 (Kerala). That was a case filed by the revenue challenging an order passed by the lower authorities, directing payment of interest under section 244A of Income-tax Act, 1961 for the delay caused by the assessee for correcting the TDS certificates. It was held at paragraph 4 as under.

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“4. As per the decisions referred to above, once the credit for TDS given, automatically logical consequence is determination of interest on the tax credit. Similarly the authorities below opined that the interest cannot be denied for the time taken by the appellant assessee to cure the defects in the TDS certificates as no amount is due from the assessee so far as TDS certificates and the amount was lying with the revenue. The interest is payable on account of the amount in excess of what is payable was remaining

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R.P. No.369 of 2017

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with the revenue and not for the delay caused by the revenue in determining the refund of the amount. In that view of the matter as the excess amount was remaining with the revenue, interest is to be paid on the amount to be refunded to the appellant assessee. We find no good reason to differ from the two opinions of the Divisions Benches of Bombay and Punjab and Haryana High Courts, therefore we decline to interfere. Accordingly, the appeal is dismissed.”

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Learned counsel for the petitioner submits that in the present case also the issue is related to denial of interest under 244A of the Act on the finding that there was delay on the part of assessee in curing the defects in the TDS certificates. When an identical case has been decided by the Division Bench as referred earlier, the petitioner is also entitled to have the same benefit to be adopted in the present case also.

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As far as the present case is concerned, this Court upheld an order passed by the Chief Commissioner by which it was found that interest was not payable to the petitioner for the period of delay which occurred in curing the defects in the TDS certificates. This Court having taken note of Section 244 A (1) and (2) opined that if the delay is on the part of the department in finalizing the difference, interest is payable from the date on which it becomes due. However, in terms of sub Section (2), if the delay in the proceedings resulting in refund is

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R.P. No.369 of 2017

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with reference to finalisation of returns and is not in regard to the proceedings for refund, with reference to contention that the period taken is for curing the defects in the TDS certificates cannot be a reason which could be attributable to the assessee.

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Based on the counter affidavit filed by the first respondent, this Court had taken note of the fact that the delay was substantial and when the statute clearly specifies that the interest need not be paid if the proceedings of refund is delayed for reasons attributable to the assessee, and the respondents having refused interest on the basis of a factual finding placing reliance on a statutory provision, there is no reason to interfere in the said direction. The question to be considered is whether the judgment referred above is to be applied to the facts of the present case.

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Commissioner of Income-tax, Thiruvananthapuram v

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State Bank of Travancore (supra) was a case filed by the Revenue, wherein the department itself has arrived at a conclusion that interest is not required to be paid under Section 244A. In fact, the Commissioner of Income Tax (Appeals) allowed the appeal filed by the assessee, against which the Revenue approached the Tribunal and the Tribunal confirmed the view placing reliance on the decision of the

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Bombay High Court in CIT v. Larsen & Turbo Ltd. [2011] 330 ITR 340 and decision of Punjab & Haryana High Court in CIT v. Punjab State Co-operative Bank [IT Appeal No.674 of 2008, dated 16.12.2008], wherein the orders passed by the Revenue was not interfered by the Bombay High Court as well as the Tribunal.

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It is pointed out by the learned Standing Counsel for the Revenue that this Court had decided the case after evaluating the scope of Section 244A (2), which clearly indicates that if the proceedings resulting in the refund of delay for the reasons attributable to the assessee, whether wholly or in part, the period of the delay so attributable shall be excluded from the period for which interest is payable. Statue also indicates that, if any question arises as to the period to be excluded, it has to be decided by the Principal Chief Commissioner or the Chief Commissioner. Under what all circumstances can such an eventuality arise is a matter to be considered by a competent authority. Once the competent authority had taken such a decision, this Court, in a petition under Article 226 of the Constitution of India will not go into the merits of the contention, unless the decision is illegal or perverse. Each case has to be decided on its own facts.

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R.P. No.369 of 2017

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7. In CIT, Thiruvananthapuram v State Bank of

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Travancore (supra), the Division Bench was considering a case in which interest was directed to be paid by the Commissioner of Income Tax, which was confirmed by the Tribunal. The said case rests on its own facts. In the present case, the Commissioner of Income Tax had denied the grant of interest on specific grounds which had been indicated in the order itself and it was after arriving at a conclusion that such a power is vested with the Commissioner, that this Court had upheld the view expressed by the Commissioner.

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