THE COMMISSIONER OF INCOME-TAX, THIRUVANANTHAPURAM vs. THE KERALA MINERALS AND METALS LTD.

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ITA/67/2012HC KeralaKLHC01023989201204 December 2017Bench: HONOURABLE MR.JUSTICE K.VINOD CHANDRAN,HONOURABLE MR. JUSTICE ASHOK MENON5 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the assessee is entitled to interest on the excess tax paid. The Court affirmed the view of the ITAT and a learned Single Judge, which was further affirmed by a Division Bench of the same Court in W.A. No. 817/2010. The Court extracted Section 244A(1)(b) and its explanation. It reasoned that the explanation does not create a differentiation that limits interest payment only to tax paid after a demand under Section 156. Any amount due to the assessee under Section 244(1) encompasses all forms of refund, including self-assessed tax or tax paid pursuant to a notice under Section 156. The explanation's purpose is to indicate the date of liability for interest. Therefore, there was no illegality or perversity in the ITAT's judgment. The appeal was dismissed, affirming the order of the Tribunal in favour of the assessee.

What were the facts?

The appeal was filed by the Commissioner of Income-tax, Thiruvananthapuram, against an order of the Income Tax Appellate Tribunal (ITAT), Cochin Bench. The assessee is The Kerala Minerals and Metals Ltd. The core issue revolves around the assessee's entitlement to interest on a tax refund. The assessee had made a self-assessment of tax and paid an amount significantly exceeding the tax ultimately determined under regular assessment. The dispute concerns whether interest is payable on this excess self-assessed tax paid. The ITAT had ruled in favour of the assessee. The High Court's judgment refers to a previous Division Bench decision of the same court in W.A. No. 817/2010.

What were the issues?

1. Whether the assessee, having paid tax in excess of the regular assessment through self-assessment, is entitled to interest on the refund, as per Section 244A(1)(b) of the Income Tax Act, 1961. The Revenue contended that interest under Section 244A(1)(b) is payable only on tax paid after a demand is made under Section 156 of the Act. The Revenue argued that the explanation to Section 244A(1)(b) limits the liability to pay interest to such scenarios. The Assessee contended that any amount due to the assessee under the Act, as mentioned in Section 244(1), includes all forms of refund, whether from self-assessed tax or tax paid as per a notice under Section 156. The Assessee argued that the explanation merely indicates the date on which interest is liable to be paid and does not restrict the scope of refund eligible for interest.

Which sections of the Income-tax Act were involved?

Section 244A(1)(b),Section 156,Section 244(1)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN & THE HONOURABLE MR. JUSTICE ASHOK MENON MONDAY, THE 4TH DAY OF DECEMBER 2017/13TH AGRAHAYANA, 1939 ITA.No. 67 of 2012 () ---------------------- AGAINST THE ORDER OF THE ITA TRIBUNAL,COCHIN BENCH IN ITA NO.568/COCH/2009 DATED 21-10-2011 APPELLANT/APPELLANT: ---------------------- THE COMMISSIONER OF INCOME-TAX, THIRUVANANTHAPURAM

BY SR COUNSEL GOVERNMENT OF INDIA (TAXES) SRI.P.K.R. MENON BY SC, FOR INCOME TAX SRI.JOSE JOSEPH RESPONDENT/APPELLANT: -------------- THE KERALA MINERALS AND METALS LTD. CHAVARA, KOLLAM-691 584.

BY ADV. SRI.A.KUMAR THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 04-12-2017, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

IT APPEAL NO.67 OF 2012 ::2:: APPENDIX APPELLANT'S ANNEXURES: ANNEXURE A: TRUE COPY of the PROCEEDINGS OF THE ASSESSING OFFICER DATED 06.03.2007 ANNEXURE B: TRUE COPY OF THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) DATED 16.09.2009 ANNEXURE C: TRUE COPY OF the ORDER OF THE APPELLATE TRIBUNAL DT 21.10.2011 ANNEXURE D: TRUE COPY OF THE JUDGMENT OF THE HON'BLE HIGH COURT OF KERALA IN ITA NO. 493/2009 DT. 11.11.2009 ANNEXURE E: TRUE COPY OF THE JUDGMENT OF THE HON'BLE HIGH COURT OF KERALA IN WPC 26052/2004 DT 5.12.2008 RESPONDENTS ANNEXURES: NIL TRUE COPY P.A TO JUDGE jma

K. Vinod Chandran & Ashok Menon, JJ - - - - - - - - - - - - -- - - - - - - - - - - - - - - - I.T Appeal No.67 of 2012 - - - - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 04th day of December, 2017 J U D G M E N T K. Vinod Chandran, J The issue raised in the above appeal by the department is as to whether the assessee, who made a self assessment of tax and paid tax, far in excess of that determined under the regular assessment; is entitled to interest on the refund. The issue is no longer res integra having been answered by a Division Bench of this Court affirming the view of a learned Single Judge in W.A No.817/2010 dated 08.10.2013. 2. Extracting Section 244A (1) (b) of the Income Tax Act, 1961. It was held so: “The argument is that going by the explanation to Section 244A (1) (b) the

ITA 67/2012 : 2 : liability to pay interest is only in respect of the tax paid after a demand is made under section 156 of the Act. We do not think that such a differentiation can be made to the aforesaid provision and explanation does not give a different meaning at all. Any amount due to the assessee under the Act mentioned in section 244(1) clearly takes in all forms of refund, either self assessed tax or tax paid as per notice under Section 156 of the Act. As far as the explanation is concerned it only indicates the date on which the interest is liable to paid. That being the position, we do not think that there is any illegality or perversity in the judgment of the learned Single Judge. Accordingly, this appeal is dismissed. ”

ITA 67/2012 : 3 : In the aforesaid circumstance, the assessee would be entitled to the interest on the excess tax paid. The question raised in the Income Tax Appeal is answered against the Department in favour of the assessee, affirming the order of the Tribunal, respectfully following the binding precedent cited above.

Sd/- K. Vinod Chandran, Judge Sd/- Ashok Menon, Judge jma //true copy// P.A to Judge

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