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Facts
The assessee challenged an order by the CIT(A) that treated their appeal as withdrawn. This stemmed from a prior appeal before the Tribunal, which was dismissed as withdrawn due to settlement under the Vivad Se Vishwas Scheme. The assessee had sought rectification for interest on refund and short credit of prepaid taxes.
Held
The Tribunal held that the CIT(A) was not justified in treating the appeal as withdrawn. Section 4(2) of the DTVSV Act applies only to the disputed interest that was the subject matter of the appeal before the Tribunal or CIT(A), and not to other disputes arising from a rectification application.
Key Issues
Whether an appeal before the CIT(A) for interest on refund could be deemed withdrawn due to a settlement under VSVS for a separate appeal before the Tribunal, and if interest is admissible on self-assessment tax.
Sections Cited
143(1), 143(3), 144C, 154, 244A, 140A, 4(2), 5(2)
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Income Tax Appellate Tribunal, MUMBAI BENCHES “G”, MUMBAI
Before: JUSTICE (RETD.) C V BHADANG & SHRI PRABHASH SHANKAR
By this appeal, the assessee is challenging the order dated 13.08.2025 passed by Addl./JCIT(A), Raipur (‘CIT(A)’ for short). The appeal relates to assessment year 2011-12.
The appellant filed its Return of Income (RoI) for the relevant year, which was processed under Section 143(1) of the Income Tax Act, 1961 (‘Act’ for short) vide an intimation dated 25.03.2013. Subsequently, in a rectification application under Section 154 of the Act, the refund payable to the appellant was determined at Rs.2,55,17,060/-. It appears that subsequently the case was taken up for scrutiny in which the Assessing Officer (‘AO’ for short) passed an order S.H. Kelkar & Co. under Section 143(3) r.w.s. 144C of the Act on 09.03.2015. The matter was carried in appeal in which the learned CIT(A) confirmed the order passed by the AO vide order dated 29.11.2016 against which the appellant filed an appeal before this Tribunal being ITA No. 1230/Mum/2017.
Subsequently, the AO passed an order dated 31.03.2017 giving effect to the order of the learned CIT(A) determining the refund at Rs.3,93,360/-, which was granted to the assessee on 17.04.2017.
The issue in this appeal only pertains to the quantum of interest payable on the refund under Section 244A of the Act.
On 09.04.2018, the assessee filed an application under Section 154 of the Act claiming further interest on the refund of Rs.42,50,000/- under Section 244A of the Act and short credit of prepaid taxes of Rs.10,00,000/-.
The AO vide order dated 28.05.2018 allowed the claim insofar as the prepaid tax credit is concerned, however, rejected the claim of interest under Section 244A of the Act. This order dated 28.05.2018 was challenged by the assessee before the learned CIT(A) in appeal no. CIT(A) 9, Mumbai/10029/2018- 19. In the meantime, the assessee opted for settlement under the Vivad Se Vishwas Scheme (VSVS) insofar as the dispute which was subject matter of appeal in is concerned. On the basis of Form no. 5 the Tribunal by order dated 10.12.2020 has dismissed the appeal as withdrawn.
Coming to the appeal pending before the learned CIT(A) arising out of order dated 28.05.2018, the learned CIT(A) has found that ITA No. S.H. Kelkar & Co. 1230/Mum/2017 having been withdrawn, the pending appeal “shall be deemed to have been withdrawn”. In that view of the matter, learned CIT(A) by the impugned order has treated the appeal as infructuous. This order is the subject matter of challenge in the present appeal. It is necessary to note that the learned CIT(A) has observed that the appeal is deemed to be withdrawn in view of the provisions of Section 4(2) r.w.s. 5(2) of the Direct Taxes Vivad Se Vishwas Act, 2020 (‘DTVSV Act’ for short).
We have heard parties. Perused record.
It is submitted by the learned AR that the learned CIT(A) was not justified in dismissing the appeal as “deemed to be withdrawn and infructuous”, particularly when the dispute arising out of order dated 28.05.2018 in application for rectification under Section 154 of the Act was not sought to be settled under the VSVS. The learned counsel has placed reliance on the decision of this Tribunal in M/s. Reliance Infrastructure Ltd. vs ACIT (ITA No. 2406/Mum/2021) and Inter Globe Air Transport (ITA No. 245/Del/2023 dated 23.05.2023) in order to submit that it is open for the assessee to opt for settlement of one or more of the disputes/appeals arising out of the same assessment year. The learned AR has pointed to the answer to Question no. 19 in the Frequently Asked Questions (FAQ) contained in CBDT Circular no. 9/2020 dated 22.04.2020, which has been relied upon in the decision in Reliance Infrastructure Ltd. (supra).
It is next submitted that interest under Section 244A of the Act is admissible even on the amount of self-assessment tax paid under Section 140A of the Act. Reliance in this regard is placed on the decision of Punjab & Haryana S.H. Kelkar & Co. High Court in M/s. Punjab Chemicals and Crop Protection Ltd., 370 ITR 481 (Punjab & Haryana) and Madras High Court in Rajaratna Mills Ltd. vs CIT, [2015] 64 taxmann.com 89 (Madras) in order to contend that the interest would be admissible even on the self-assessment tax paid/adjusted under Section 140A of the Act. It is, therefore, submitted that the claim of the appellant can be allowed throughout. In the alternative, it is submitted that the appeal may be restored to the file of the CIT(A).
We have considered the submissions.
It is apparent from the facts noted above that there were separate disputes pertaining to the order dated 09.03.2015 passed under Section 143(3) r.w.s. 144C of the Act which had culminated into an appeal before the Tribunal in and the dispute arising out of application under Section 154 of the Act filed by the appellant seeking interest on the refund under Section 244A of the Act and the short credit of prepaid taxes, which application was partly allowed so far as the claim of prepaid taxes is concerned. The learned CIT(A) in the impugned order has reproduced the application dated 04.01.2021 filed by the assessee seeking to withdraw only before the Tribunal. Thus, there is nothing on record to indicate that the assessee had opted for settlement under the VSVS so far as dispute which was pending before the learned CIT(A) in appeal no. CIT(A) 9, Mumbai/10029/2018-19. We find that the learned CIT(A) was not justified in holding that this appeal, which was pending before him, must be deemed to have been withdrawn in view of provisions of Section 4(2) r.w.s. 5(2) of the DTVSV Act.
“4(2) Upon the filing the declaration, any appeal pending before the Income- tax Appellate Tribunal or Commissioner (Appeals), in respect of the disputed income or disputed interest or disputed penalty or disputed fee and tax arrear shall be deemed to have been withdrawn from the date on which certificate under sub-section (1) of section 5 is issued by the designated authority.”
“5(2) The declarant shall pay the amount determined under sub-section (1) within fifteen days of the date of receipt of the certificate and intimate the details of such payment to the designated authority in the prescribed form and thereupon the designated authority shall pass an order stating that the declarant has paid the amount.”
It can be seen that Section 5(2) of the DTVSV Act only prescribes for payment of the amount determined under Section 5(1).
Section 4(2) of the DTVSV Act prescribes that the appeal pending before the Tribunal or the Commissioner (Appeals) “in respect of the disputed income, disputed interest, disputed penalty or disputed fee and tax arrears” shall be deemed to have been withdrawn from the date on which certificate under Section 5(1) of DTVSV Act is issued by the designated authority. It can thus clearly be seen that Section 4(2) would apply only to the disputed interest which is the subject matter of appeal before the Tribunal or the Commissioner (Appeals) and not otherwise. As noticed earlier, the dispute as to payment of interest under Section 140A of the Act on the self-assessment tax under Section 140A of the Act arising out of the rectification application was not pending before the Commissioner (Appeals). In that view of the matter, we find that the appeal deserves to be allowed as the learned CIT(A) has not examined the merits of the matter. Hence, the following order. The appeal is partly allowed. Matter
Order pronounced in the open court on 10.11.2025.