Calcutta High Court
Kolkata vs M/S. Philips Electronics India ... on 9 February, 2022
OD - 26
ORDER SHEET
IN THE HIGH COURT AT CALCUTTA
SPECIAL JURISDICTION (INCOME TAX)
ORIGINAL SIDE
IA NO. GA/2/2017
(Old No. GA/1322/2017)
In
ITAT/150/2017
PRINCIPAL COMMISSIONER OF INCOME TAX, KOLKATA-4,
KOLKATA
VS.
M/s. PHILIPS ELECTRONICS INDIA LTD.
BEFORE :
THE HON'BLE JUSTICE T.S. SIVAGNANAM
AND
THE HON'BLE JUSTICE HIRANMAY BHATTACHARYYA
Date : February 9, 2022.
[Via Video Conference]
Appearance :
Mr. Smarajit Roy Chowdhury, Adv.
Mr. Radha Mohan Roy, Adv.
... for the appellant
Mr. J. P. Khaitan, Sr. Adv.
Mr. Pratyush Jhunjhunwala, Adv.
Mr. A. K. Dey, Adv.
...for the respondent
The Court : This appeal filed by the revenue under Section 260A
of the Income Tax Act, 1961 (the Act) is directed against the order
dated 20th July 2016 passed by the Income Tax Appellate Tribunal "C"
Bench, Kolkata in ITA Nos. 1169 & 1294/Kol/2013 for the
assessment year 2007-08 on the following substantial questions of
law:-
i) Whether in the facts and circumstances of the case, the
Hon'ble Income Tax Appellate Tribunal - "C" Bench,
Kolkata was justified in holding that the section 234C of
the Income Tax Act, 1961 was applicable to the assessee
only from the 4th Quarter i.e. 15th March, 2007 and not
from the 3rd Quarter i.e. 15th December, 2006?
ii) Whether the liability of the payment of advance tax by the
assessee on the income under the heading "long term
gains" become legally due on 15th March, 2007 and not
from 15th December, 2006?
iii) Whether the ITAT erred in law in reversing the order of
the learned CIT (A) relying on a judgment reported in 337
ITR 470 (Emami Ltd. Vs. CIT) when the facts and
questions of law are totally different from the instant
case?"
We have heard Mr. Smarajit Roychowdhury, learned
Counsel and Mr. Radhamohan Roy, learned Counsel for appellant and
Mr. J.P. Khaitan, learned Senior Counsel with Mr. A.K. Dey, learned
Counsel for the assessee. When the case was heard on 24th January,
2022 the learned Counsel appearing for the respondent submitted
that revenue cannot pursue the appeal on the ground of low tax effect.
In fact, it was explained to us as to how the Circular issued by the
CBDT would be attracted to the facts of the case. In order to enable
the appellant/department to give necessary instruction to the learned
standing Counsel, we adjourned the matter by directing it to be put
up specifically in the list today. It appears that no written instruction
has been given to the learned standing Counsel, therefore, we
proceeded to consider as to whether the appeal is a case where the tax
effect is lower than the threshold limit. The assessment order dated
25.05.2011 has levied interest under Section 234C to the tune of
Rs.1,53,71,896/- for the period of four quarters. The assessee was on
appeal against the said order before the Commissioner of Income Tax
Appeals XII, Calcutta (CITA). By order dated 24.6.2011 the appeal was
partly allowed holding that interest under Section 234C can be
charged only from the third quarter i.e. from December, 2006. The
assessee not being satisfied with the order filed an appeal before the
Tribunal. The Tribunal allowed the appeal in its entirety by the
impugned order. The correctness of the order of the Tribunal is
challenged in this appeal. On perusal of the substantial questions of
law, we find that revenue is aggrieved by the order passed by the
CIT(A) and would contend that the liability to pay interest under
Section 234C should start from the third quarter i.e. from 15.12.2006.
We find that before the Tribunal the revenue has filed the cross
appeal. Nevertheless, before us in this appeal the revenue has
restricted their grounds only questioning the correctness of the order
passed by the CIT(A) and did not seek for restoration of the order
passed by the assessing officer. Thus if that portion of the order of the
CIT(A) remains intact, as the revenue is not aggrieved by same, then
interest liability would be half of what had been charged by the
assessing officer in his order dated 25.05.2011.
Mr. Smarajit Roychowdhury, learned Counsel appearing for the
revenue produced a written instruction given by the Joint
Commissioner of Income Tax Range-12 stating that the tax effect is
Rs.1,53,71,896/-. This instruction has been based upon the figure
arrived at by the assessing officer for the relevant assessment year. In
the preceding paragraphs we have discussed as to how the order
stood modified by the CIT(A) wherein partial relief was granted to the
assessee and the assessee took up the matter to the Tribunal where
they were granted full relief. We have also noted that the appeal filed
by the revenue is questioning the correctness of the relief granted by
the CIT(A) as to whether interest needs to be calculated from third
quarter or from fourth quarter and interest from the first two quarters
is not called in question. Therefore, we are satisfied that this appeal
will be below the threshold limit fixed by the CBDT Circular.
Accordingly, the appeal stands disposed of on the ground of low
tax effect. Substantial questions of law are left open.
The written instruction is kept on record.
Consequently, the connected application stands disposed of.
(T. S. SIVAGNANAM, J.)
(HIRANMAY BHATTACHARYYA, J.)
GH/sp3
