, ""
IN THE INCOME TAX APPELLATE TRIBUNAL" I" BENCH, MUMBAI
BEFORE S/SHRI B.R.BASKARAN (AM) AND SANJAY GARG, (JM)
.. , ,
Stay Application Nos.165 and 166/Mum/2015
Arising out of I.T.A. Nos.3140 and 3169/Mum/2015
( / Assessment Year : 2008-09)
IKG Associates, / Asstt. Commissioner of Income
The IL and FS Financial Center, Tax, 23(1), Mumbai.
Plot No.C-22, G Block,
Vs.
Bandra-Kurla Complex,
Bandra (E),
Mumbai-400051.
( /Appellant) .. ( / Respondent)
. / . /PAN/GIR No. :AAAAI1978E
/ Applicant by Shri D V Lakhani
/ Assessee by Shri H Padmanabhan
/ Date of Hearing : 26.6.2015
/Date of Pronouncement :26.6.2015
/ O R D E R
Per B.R.BASKARAN, Accountant Member:
Both these stay applications have been filed by the assessee seeking
the stay of outstanding demand.
2. We heard the parties and perused the record. We notice that the
assessment in the hands of the assessee was completed on 21.12.2010
u/s 143(3) of the Act, wherein the AO levied interest under section 234C of
the Income Tax Act, 1961 (the Act) amounting to Rs.11.05 crores. The
assessee filed a rectification petition u/s 154 of the Act, wherein it was
2 SA No.165 and 166/M/2015
pointed out that the assessee did not earn any income prior to 15.12.2007
and hence the question of paying advance tax on 15.9.2007 and
15.12.2007 does not arise. The AO was convinced with the submissions of
the assessee and accordingly held, vide his order dated 25.02.2011, that
the assessee is not liable to pay interest u/s 234C of the Act.
Subsequently, the AO issued another notice u/s 154 of the Act on 2.8.2012
in order to disallow the interest expenditure of Rs.11.89 lakhs, which was
paid without deduction of Tax at source. In the order dated 14.11.2013
passed u/s 154 consequent to the above said notice, the AO again levied
interest u/s 234C of the Act. Subsequently on 17.4.2004, the assessee
filed another rectification petition seeking withdrawal of interest levied u/s
234C of the Act. In response thereto, the AO sent a letter dated 11.6.2014
seeking further details. Subsequently, the AO issued another notice dated
4.7.2014 of the Act under section 154 of the Act. Finally, the AO passed
one more order u/s 154 of the Act on 28.7.2004, wherein he confirmed the
charging of interest u/s 234C of the Act. In the mean time, the assessee
had preferred appeal before Ld CIT(A) against the order dated 14.11.2013
passed under section 154 of the Act, wherein interest u/s 234C was
charged by the AO. Subsequently, the assessee preferred appeal before
Ld CIT(A) against the order dated 28.7.2014 passed by the AO u/s 154 of
the Act, wherein the AO had confirmed levy of interest u/s 234C of the
Act. Thus, it is seen that the assessee has filed two appeals challenging
the interest charged u/s 234C of the Act for the same year, i.e., the year
under consideration. Both the appeals were dismissed by the ld.CIT(A)
and hence the assessee filed these two appeals before the Tribunal.
3. The ld. Counsel appearing for the assessee submitted that the
assessee has earned business income and interest income only in the
month of March, 2008 and hence the assessee there was no occasion for
the assessee to pay any advance tax in the Month of September, 2007 and
3 SA No.165 and 166/M/2015
December, 2007, since the assessee could not visualize about the earning
of income in the month of March, 2008. Accordingly he submitted that the
assessee could not be forced to perform impossibility. The ld. Counsel
relied upon the decision rendered by the Hyderabad Bench of the
Tribunal in the case of ACIT V/s Jindal Irrigation Systems Ltd (56 ITD
164) and submitted that the Tribunal has deleted the interest charged
under section 234C of the Act on the reasoning that the assessee cannot
be forced to perform impossibility and hence interest u/s 234C is not
leviable.
4. On the contrary, the ld. DR invited our attention to the provisions of
section 234C and submitted that the said provision provided for non
charging of interest only if there is a failure to estimate the income from
capital gain, winning from lotteries, cross-word and race etc specified in
section 2(24)(ix) of the Act.
5. Having heard the rival contentions, we are of the view that balance
of convenience is in favour of the assessee for granting absolute stay of
the outstanding demand, since there is prima facie case in its favour. In
any case, the merits of the contentions of the assessee can be examined
only at the time of hearing of appeal. Accordingly, we direct the Revenue
not to enforce the collection of outstanding demand for the year under
consideration for a period of six months from the date of this order or till
the date of disposal of these appeals, which ever period expires earlier. At
the request of the assessee, both the appeals are posted for hearing on
6.8.2015. Since, the date of hearing is announced in the open court in the
presence of both the parties, there is no necessity to send formal notice of
hearing to the parties. It is also directed that the assessee should not
seek adjournment on the date fixed for hearing without a reasonable
4 SA No.165 and 166/M/2015
cause, failing which the present stay order will be subject to review by
Division Bench hearing the appeals.
6. In the result, both the stay applications are allowed.
Pronounced accordingly in the open court on 26th June, 2015.
26th June, 2015
Sd sd
( /SANJAY GARG) ( .. / B.R. BASKARAN)
/ JUDICIAL MEMBER / ACCOUNTANT MEMBER
Mumbai: 26th June,2015.
. ../ SRL , Sr. PS
/Copy of the Order forwarded to :
1. / The Appellant
2. / The Respondent.
3. () / The CIT(A)- concerned
4. / CIT concerned
5. , , /
DR, ITAT, Mumbai concerned
6. / Guard file.
/ BY ORDER,
True copy
(Asstt. Registrar)
, /ITAT, Mumbai
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