Case Law Details
DDIT Vs Linklaters (ITAT Mumbai)
Introduction: A recent decision by the Income Tax Appellate Tribunal (ITAT) in the case of DDIT vs. Linklaters, Mumbai, sheds light on an important aspect of tax liability. The central issue at hand is whether interest under Section 234B of the Income Tax Act is applicable when certain income qualifies for deduction. This article delves into the details of the case and the ITAT’s ruling.
Detailed Analysis:
1. Background of the Case: The case revolves around an appeal filed by the Revenue against an order passed by the Commissioner of Income Tax (Appeals) for the assessment year 2005-2006. It’s essential to note that the same issue had been previously addressed by the Tribunal in the assessee’s own case (Linklaters Vs. ITO) and reported in (2010) 40 SOT 51. The Departmental Representative argued that the current appeal should follow the precedent set in the earlier decision, as there were no distinguishing features or changes in facts or law. The counsel for the assessee sought an adjournment, stating that an application for the formation of a Special Bench had been made in another similar case, and the assessee was contemplating filing a miscellaneous application against the Tribunal’s previous order. However, the request for an adjournment was not granted.
2. ITAT’s Decision: The ITAT considered the facts and circumstances of the case and noted that no Special Bench had been constituted, and no miscellaneous application had been filed against the previous order in the assessee’s own case. The ITAT emphasized that when a particular issue has been decided by the Tribunal in an earlier year in the assessee’s favor, and there are no changes in facts or laws, there is no basis for deviating from the previous ruling. Consequently, the ITAT allowed one ground and dismissed another in the present appeal based on their previous judgment in the assessee’s favor.
3. Interest Under Section 234B: The significant issue in this case was the applicability of interest under Section 234B of the Income Tax Act. Both the Departmental Representative and the counsel for the assessee agreed that several orders by the Tribunal had held that when income qualifies for tax deduction, there is no obligation to pay interest under Section 234B. The Tribunal also cited a precedent in the assessee’s own case, where interest under Section 234B had been deleted. Consequently, the ITAT ruled in favor of the assessee on this ground, following the established legal principles and precedents.
Conclusion: The ITAT’s decision in the case of DDIT vs. Linklaters (Mumbai) highlights the importance of consistent legal precedents in tax matters. The ITAT emphasized that when there are no distinguishing features or changes in facts or laws, a decision in the assessee’s favor in an earlier case should be followed. This ensures that taxpayers receive fair and uniform treatment from tax authorities.
In this specific case, the ITAT clarified that when certain income qualifies for deduction, interest under Section 234B of the Income Tax Act is not applicable. This ruling aligns with previous tribunal decisions, reinforcing the importance of adhering to established legal principles in tax matters.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
This appeal by the Revenue arises out of the order passed by the Commissioner of Income-tax (Appeals) on 28 .02.2008 in relation to the assessment year 2005-2006.
2. At the very outset the learned Departmental Representative contended that the issues raised in this appeal have already been decided by the Tribunal in assessee’s own case reported at Linklaters Vs. ITO (IT) [(2010) 40 SOT 51]. It was, therefore, prayed that the same view be followed in the absence of any distinguishing feature on the facts of the case or law as already decided by the Tribunal and those prevailing in the instant case. The learned Counsel for the assessee, on the other hand, requested for adjournment giving reasons that some other assessee, on similar issue, has made application to “L” Bench for formation of Special Bench and the assessee was also considering for filing a miscellaneous application against the order of the Tribunal as afore-noted.
3. Having heard both sides and perused the relevant material on record it is noted that no Special Bench has been constituted so far on the issue as has been decided by the Tribunal in assessee’ s own case. Further no Miscellaneous application has been filed against the afore-said order. Once the Tribunal has decided a particular issue in assessee’ s own case in an earlier year and there is no change in facts or law in the subsequent year, then there is no scope for deviating from the view originally taken by the Tribunal. In view of these facts it was conveyed that the adjournment was not possible.
4. On merits the learned Departmental Representative contended that ground 1 was decided by the Tribunal against the assessee whereas ground no.2 was in assessee’s favour. This submission was not accepted by the ld. AR. As the facts and circumstances of the year in question are similar to those already decided by the tribunal in assessee’ s own case and no distinguishing feature has been brought to our notice, respectfully following the view taken by the Tribunal in assessee’ s own case in the earlier year we allow ground no.1 and dismiss ground no.2 in the present appeal.
5. The only other effective ground is against not charging of interest u/s.234B of the Act. Both sides are in agreement that there are several orders passed by the Tribunal holding that when a particular income is such on which tax is deductible, then there is no obligation for paying interest u/s.234B. The tribunal, in assessee’s own case in ITA Nos.3057 & 3058/Mum/2007 for assessment years 2002-2003 and 2003-2004, has ordered for the deletion of levy of interest u/s.234B. Following the precedent, we dismiss this ground of appeal.
6. In the result, the appeal is partly allowed.
Order pronounced on this 27th day of December, 2010.
