EARLY MAN FILM PRIVATE LIMITED,MUMBAI vs. DEPUTY COMMISSIONER OF INCOME TAX, MUMBAI

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ITA 1467/MUM/2026Status: DisposedITAT Mumbai19 May 2026AY 2022-235 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the interest under Section 244A should be computed only on the differential portion of the refund granted after the rectification. The Assessing Officer was directed to recompute the interest after providing an opportunity to the assessee.

What were the facts?

The assessee claimed a refund which was processed with a lower interest under Section 244A. After rectification, the entire prepaid taxes were granted, but a demand was raised due to a recalculation of interest under Section 244A. The CIT(A) upheld this demand.

What were the issues?

The key issue was the correct computation of interest under Section 244A of the Income Tax Act on a refund granted after rectification proceedings.

Which sections of the Income-tax Act were involved?

Section 244A,Section 154,Section 143(1),Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “E” BENCH, MUMBAI

Before: SHRI VIKRAM SINGH YADAVSHRI SANDEEP SINGH KARHAIL

For Appellant: Shri Yash Mehta (virtually appear)
For Respondent: Shri Hemanshu Joshi, Sr. DR

IN THE INCOME TAX APPELLATE TRIBUNAL “E” BENCH, MUMBAI BEFORE SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER SHRI SANDEEP SINGH KARHAIL, JUDICIAL MEMBER

ITA No. 1467/Mum./2026 (Assessment Year : 2022-23) Early Man Film Private Limited 101 Saturn, 729 Palimala Road, Bandra West, Mumbai - 400050 ……………. Appellant PAN : AADCE2691P v/s

Deputy Commissioner of Income Tax, Aayakar Bhavan, Maharishi Karve Road, M.K. Road, Marine Lines ……………. Respondent Mumbai - 400020 Assessee by : Shri Yash Mehta (virtually appear) Revenue by : Shri Hemanshu Joshi, Sr. DR

Date of Hearing – 30/04/2026 Date of Order – 19/05/2026

O R D E R PER SANDEEP SINGH KARHAIL, J.M. The assessee has filed the present appeal against the impugned order dated 31/12/2025, passed under section 250 of the Income Tax Act, 1961 (“the Act”) by the learned Additional / Joint Commissioner of Income Tax (Appeals)-1, Hyderabad [“learned Addl. / Joint CIT(A)”], which in turn arose from the rectification order passed under section 154 of the Act, for the assessment year 2022-23.

2.

In this appeal, the assessee has raised the following grounds: “On the facts and in the circumstances of the case and in law, the order passed by the learned Commissioner of Income Tax (Appeals) under section 250 of

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the Income-tax Act, 1961 vide DIN: ITBA/APL/S/250/2025- 26/1084271474(1) is bad in law, erroneous and liable to be set aside. 2. On the facts and in the circumstances of the case and in law, the learned Commissioner of Income Tax (Appeals) erred in confirming the demand of IN 1,40,790 raised by the Centralized Processing Centre, which is unjustified and unsustainable, without considering and dealing with the submissions made by the appellant and failed to appreciate the facts of the case and the provisions of the Income-tax Act, 1961 while passing the impugned order thereby rendering the impugned order non-speaking and in violation of the principles of natural justice. 3. On the facts and in the circumstances of the case and in law, the learned Commissioner of Income Tax (Appeals) erred in not providing appropriate interest under section 244A of the Income-tax Act, 1961, to which the appellant is lawfully entitled.”

3.

The solitary grievance of the assessee is against the incorrect computation of interest under section 244A of the Act, which resulted in a demand of Rs.1,40,790/-.

4.

We have considered the submissions of both sides and perused the material on record. The brief facts of the case are that the assessee is a company actively engaged in the business of Video Tape Production. For the year under consideration, the assessee filed its return of income on 03.11.2022, declaring a total income of Rs.58,80,500/- and after considering the taxes already paid, claimed a refund of Rs.93,85,710/-. The return filed by the assessee was processed vide intimation dated 02.03.2023 issued under section 143(1) of the Act, determining a total refund of Rs.92,09,500/-, which included interest under section 244A on the refund at Rs.5,21,292/-. Thus, as against the refund amount of Rs.93,85,710/- only a refund of Rs.86,88,209/- was granted to the assessee. Since, as per the assessee, the entire credit of prepaid taxes amounting to Rs. 1,08,65,712/- was not granted and the same was restricted to Rs. 1,01,68,213/-, the assessee filed a rectification

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application under section 154 of the Act. Vide order dated 18.05.2023 passed under section 154 of the Act, the entire credit of prepaid taxes amounting to Rs. 1,08,65,712/- was granted to the assessee, resulting in a total refund of Rs. 96,67,280/-, which includes interest of Rs. 2,81,572/- under section 244A of the Act. Thus, the entire refund of Rs.93,85,710/- was granted to the assessee. Since a refund of Rs. 92,09,500/- was already granted to the assessee vide intimation issued under section 143(1) of the Act, the balance amount of Rs. 4,57,780/- was computed as refundable to the assessee.

5.

Being aggrieved by the reduction in the amount of interest under section 244A of the Act, the assessee again filed a rectification application under section 154 of the Act. Vide order dated 06.09.2023 passed under section 154 of the Act, the interest under section 244A of the Act was recomputed to Rs.1,40,786/- and thus the total refund was computed on Rs.95,26,494/-. Since the amount of Rs. 96,67,280/- was determined as refundable to the assessee vide rectification order passed on 18.05.2023, a demand of Rs. 1,40,790/- was levied on the assessee.

6.

In the appeal by the assessee against the rectification order dated 06.09.2023 passed under section 154 of the Act, the learned Additional / Joint CIT(A) upheld the demand of Rs. 1,40,790/- on account of excess interest granted to the assessee under section 244A of the Act. Being aggrieved, the assessee is in appeal before us.

7.

During the hearing, the learned Authorised Representative (“learned AR”) reiterated the submission made by the assessee before the First

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Appellate Authority. On the other hand, the learned Departmental Representative vehemently relied upon the order passed by the learned Additional / Joint CIT(A).

8.

Having considered the submissions of both sides and perused the material available on record, in the present case, it is undisputed that the entire credit of prepaid taxes amounting to Rs.1,08,65,712/- as claimed by the assessee was granted. Further, the refund of Rs. 93,85,710/- was also granted to the assessee after the rectification order dated 18.05.2023 was passed under section 154 of the Act. Therefore, the solitary dispute before us is only regarding the computation under section 244A of the Act. From the perusal of the record, it is evident that vide intimation issued under section 143(1) of the Act, only a refund of Rs.86,88,209/- was granted to the assessee, which resulted in an interest of Rs.5,21,292/- under section 244A of the Act. Pursuant to the rectification application filed by the assessee, the entire refund of Rs.93,85,710/- was granted to the assessee. Therefore, the subsequent interest payable under section 244A of the Act should only be confined to the differential portion of refund which was granted to the assessee pursuant to the rectification order dated 18.05.2023, i.e. over and above the refund of Rs.86,88,209/- granted vide intimation issued under section 143(1) of the Act. Since the issue is only qua the computation of interest under section 244A of the Act and all the other claim of the assessee regarding credit of prepaid taxes and refund as computed in the ITR has already been accepted by the Revenue, we direct the Jurisdictional Assessing Officer to compute the interest under section 244A of the Act, as per law, after

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granting necessary opportunity of hearing to the assessee. If, upon computation of such interest under section 244A of the Act, it is found that the assessee has already been granted a higher total income tax refund, as per law, then the assessee shall be liable to pay the balance amount to the Revenue, as per law. It is reiterated that no order shall be passed without affording reasonable and adequate opportunity of hearing to the assessee. The assessee is also directed to fully cooperate in the proceedings. We order accordingly. With the above directions, the impugned order is set aside, and the grounds raised by the assessee are allowed for statistical purposes.

9.

In the result, the appeal by the assessee is allowed for statistical purposes. Order pronounced in the open Court on 19/05/2026

Sd/- Sd/- SANDEEP SINGH KARHAIL VIKRAM SINGH YADAV JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 19/05/2026 Prabhat Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); (4) The DR, ITAT, Mumbai; and (5) Guard file. By Order

Assistant Registrar ITAT, Mumbai

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