Court held that the appeal before the Tribunal was not filed by the assessee against the order of Commissioner (Appeals), but by the Department which went to the Tribunal against the order of the Commissioner (Appeals). The court sent the matter back to the Tribunal and what was before the Tribunal was a matter by the Department. Factually as well as in law it was the Department’s matter which was revived. The pending appeal being a Departmental appeal the first proviso to section 3 of the 2020 Act would be applicable and only 50 per cent. of the disputed tax could be payable. Followed Co-Operative Rabobank U. A. v. CIT (IT) (2021)436 ITR 459 (Bom) (HC). Court also observed that from a conjoint reading of sections 2(1)(j)(A), (o)(i), 3, 5 and 6 of the 2020 Act, it was clear that there is no provision in the 2020 Act, which authorises recovery of interest paid earlier by the Department under section 244A of the 1961 Act as disputed tax. Therefore, there being no statutory mandate for the Designated Authority to recover interest as disputed tax by adding it to the amount of disputed tax in the manner sought to be done the addition of Rs. 7,75,272 to the disputed tax in form 3 was bad in law. The court quashed form 3 issued by the Designated Authority for assessment year 2003-04 and directed the Designated Authority to issue a fresh form 3 to the assessee determining the amount of disputed tax in accordance with the judgment. The Court also observed that while section 6 of the 2020 Act does not permit the Designated Authority to charge interest on tax arrears as defined under the 2020 Act, it may not be correct to say that there is a complete prohibition on recovery, as the restraint to institute proceedings is only in respect of an offence but not for recovery of interest on refund concerned in the present matter. The court observed that it was not necessary to go into whether the Department could have recourse to section 244A(3) of the 1961 Act as contended by the assessee or section 234D of the 1961 Act as contended by the Department, as it was always open for the Department to take steps as per law.(AY.2003-04)
Co-Operative Rabobank U. A. v. CIT(IT) (2021) 437 ITR 639 205 DTR 113/ 322 CTR 257/ ( 2022) 284 Taxman 175 (Bom.)(HC)
S. 3 : Disputed tax-Disputed arrears-Interest-Department appeal-Matter remanded to Assessing Officer-Designated Authority demanding 100 per Cent of Disputed tax as payable-Held to be not sustainable. [S. 2(1)(j), 2(1)(j)(o), 4, 5, 6, IT Act, 2(43), 234D, 244A (3), Art. 226]