9911796707
TMI Blog2010 (3) TMI 884X X X X Extracts X X X X X X X X Extracts X X X X ..... 00 held that the pass book benefit receivable cannot be taxed. The Assessing Officer passed an order dated 26-2-2001 giving effect to the order of the learned CIT(A) dated 24-11-2007; wherein the Assessing Officer excluded the pass book benefit receivable-amounting to Rs. 6,75,24,157 from the total income. In the said order giving effect to the order passed by the learned CIT(A), an amount of Rs. 2,55,01,434 inclusive of interest under section 244A of Rs. 82,85,812 was determined as refundable to the assessee as shown below : Particulars Rs. Rs. Total income as per order giving effect to the order of the learned CIT(A) 19,22,59,200 Tax on aforesaid income including surcharge 8,26,71,456 Less : Prepaid taxes ( a ) Tax deducted at source 57,96,691 ( b ) Advance Tax 9,50,00,000 10,07,96,691 Net tax refundable 1,81,25,235 Less : Interest under section 234C (25,550) 1,80,99,685 Add : Interest under section 244A 82,85 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, shall not be made under this section unless the authority concerned has given notice to the assessee of its intention so to do and has allowed the assessee a reasonable opportunity of being heard." Notice to the assessee and a reasonable opportunity of being heard is to be given before passing any order under section 154. It was submitted that the aforesaid order which has been rectified was passed on 26-2-2001. As per provisions of section 154(7), no order under section 154 can be passed after the expiry of four years from the end of the financial year in which the order sought to be amended was passed. It was submitted that the said period of four years expired on 31-3-2005. Accordingly, the aforesaid order giving effect to the order passed by learned CIT(A) cannot be amended beyond 31-3-2005. Hence the aforesaid notice giving an opportunity to the assessee under section 154 was time-barred and ought to be treated as null and void . It was submitted that the proceedings initiated under section 154 are barred by limitation and thus bad in law. It was further submitted that the appellate order passed by the ITAT, cannot save the limitation under section 154(7). If the notic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng to refund. Making a claim in respect of non-taxability of pass book benefit receivable in the appellate proceedings has not resulted in any delay in the proceedings granting the refund. Even if, the said claim was made in the return of income itself, it was unlikely that the said claim would have been allowed in the assessment order since the same issue was rejected in the assessment order passed for the assessment year 1996-97. No proceedings resulting in refund have been delayed for reason attributable to the assessee. 7. Without prejudice to the above submission, it was submitted that the only consequence of making the said claim in the return of income would have been a higher refund in the limitation granted on 18-1-1999. No part of proceedings resulting in the refund have been delayed for reasons attributable to the assessee and if the claim was made in the return of income itself, then possibly the assessee would have been granted the refund in the intimation passed under section 143(1)( a ) on 28-9-1998. Accordingly, the assessee would still have been entitled to interest under section 244A even in respect of the said claim from 1-4-1997 upto 18-1-1999 being the date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the written submissions filed by the learned AR of the appellant. A perusal of the impugned order passed under section 250 clearly indicates that the order to withdraw interest under section 244A has been passed by the Assessing Officer on the specific instruction of the CIT, City VI, Mumbai communicated in writing to the Assessing Officer vide letter dated 10-5-2001. It is felt that the subject order having been passed at the instance of CIT, City VI, Mumbai, the jurisdiction to decide this appeal would not vest with this office. The appropriate forum to contest this order would be the Hon ble ITAT, Mumbai. Consequently this appeal is dismissed". 11. We have heard the rival submissions. The learned counsel for the assessee reiterated the stand as was taken by the assessee before the Revenue authorities. The learned D.R. relied on the order of CIT(A) and further submitted that the decision of the Hon ble Orissa High Court in the case of Gangaram Chapolia Co. ( supra ) is not good law and relied on the following decisions of the Hon ble Supreme Court and Hon ble Bombay High Court wherein it has been held that failure to follow the principles of natural justice will rend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Hon ble High Court and rejected the plea of the assessee that the order should be held as null and void. The Hon ble Court highlighted the difference between orders which are null and void and orders which are illegal. The Hon ble Court held that where there was inherent jurisdiction but that was exercised in a wrongful manner then it was only an illegality capable of being cured. Similar view has been expressed in the other two decisions referred to by the learned D.R. In view of the above, we are of the view that the plea of the assessee that the order under section 154 passed by the Assessing Officer pursuant to the order of the ITAT is beyond time cannot be accepted. 13. We are however of the view that the order of the Assessing Officer cannot be sustained for other reasons. When a dispute arises as to whether any period has to be excluded while allowing interest under section 244A, then the Assessing Officer in terms of section 244A(2) has to make a reference to the Chief Commissioner or Commissioner. In the present case, the Assessing Officer in the order dated 26-2-2001 passed while giving effect to the order of CIT(A) dated 24-11-2000 allowed interest to the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lude period for which interest is to be paid if the proceedings resulting in the refund are delayed for reasons attributable to the assessee has been given to the Assessing Officer. The Assessing Officer has to afford opportunity of being heard to the assessee in case he desires to exclude period for which interest is to be paid on the ground that the proceedings resulting in the refund are delayed for reasons attributable to the assessee. If the assessee agrees to the proposed action of the Assessing Officer then there is no difficulty. If the assessee does not agree then the Assessing Officer has no other option but to refer the question as to the period to be excluded to the Chief Commissioner or Commissioner whose decision thereon shall be final. It goes without saying that the CIT or Chief Commissioner before deciding the issue has to afford opportunity of being heard to the assessee. Such orders of the CIT or Chief Commissioner are final. They are not orders against which an appeal will lie to CIT(A) under section 246-A. Thus the jurisdiction of the appellate forums under the Act has been excluded on such decision. In other words such orders are administrative orders and cann ..... X X X X Extracts X X X X X X X X Extracts X X X X
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