ESSEL MINING & INDUSTRIES LIMITED,WEST BENGAL vs. DCIT CENTRAL CIR-1(4), MUMBAI

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ITA 188/MUM/2021Status: DisposedITAT Mumbai07 October 2022AY 2007-084 pages
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What did the Tribunal hold?

The Tribunal held that the assessee is entitled to interest under Section 244A(1) of the Act on the refund for the period where the delay is not attributable to the assessee, following jurisdictional High Court decisions.

What were the facts?

The assessee claimed a foreign exchange fluctuation gain of Rs. 5.79 crores as a capital receipt, which was accepted by the Tribunal, leading to a refund. The Assessing Officer and CIT(A) rejected the assessee's claim for interest on this refund under Section 244A(1) of the Income Tax Act.

What were the issues?

Whether the assessee is eligible for interest under Section 244A(1) on a refund arising from a claim made for the first time during assessment proceedings.

Which sections of the Income-tax Act were involved?

Section 244A(1)

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Income Tax Appellate Tribunal, MUMBAI BENCH “E”, MUMBAI

Hearing: 13/09/2022Pronounced: 07/10/2022

Per contra, Shri Abhijit Chaudhari representing the Department vehemently 4. defended the impugned order and prayed for dismissing the appeal of assessee. The ld.Departmental Representative submitted that claim was first made by the assessee before the Assessing Officer. Fresh claim was not made by assessee by way of revised return of income. The claim of the assessee, which resulted in refund was accepted by the Tribunal after protracted litigation. Hence, assessee’s claim of interest u/s. 244A(1) has been rightly rejected by the Assessing Officer and the CIT(A).

5.

Both sides heard. In so far as facts are concerned they are undisputed. The short issue before us is, whether the assessee is eligible for interest u/s. 244A(1) of the Act on a claim made for the first time during assessment proceedings. We find that the Hon’ble Jurisdictional High Court in the case of CIT vs. Melstar International Technology Ltd. (supra) in somewhat similar circumstances allowed interest under section 244A(1) of the Act. The assessee therein claimed certain expenditure for the first time before the Tribunal. The Tribunal remanded the issue to CIT(A). The First Appellate Authority accepted assessee’s claim. This resulted in refund. The question of interest under section 244A(1) of the Act on such refund travelled to the Tribunal. The Tribunal directed payment of interest. On an appeal by the Department, the Hon’ble High Court following the decision rendered in the case of Ajanta Manufacturing Ltd. Vs. DCIT (supra) held that where issue of refund order was not delayed for any period attributable to the assessee, the assessee is eligible to claim interest to that extent in terms of section 244A(1) of the Act.

6.

Thus, in the light of the aforesaid decision and the facts of the case, we hold that assessee is entitled to interest u/s. 244A(1) of the Act, on the refund for the period, where delay is not attributable to the assessee.

7.

No other ground raised in the appeal was agitated before the Bench.

8.

In the result, appeal by assessee is partly allowed.

Order pronounced in the open court on Friday the 7th day of October, 2022.

1.

Sd/- Sd/- (G.S. PANNU) (VIKAS AWASTHY) अ�� /PRESIDENT �ाियक सद�/JUDICIAL MEMBER मुंबई/Mumbai, िदनांक/Dated: 07/10/2022 SL/VM Sr.PS �ितिलिप अ�ेिषत/Copy of the Order forwarded to : 1. अपीलाथ�/The Appellant , �ितवादी/ The Respondent. 2. आयकर आयु�(अ)/ The CIT(A)- 3. आयकर आयु� CIT 4. 5. िवभागीय �ितिनिध, आय.अपी.अिध., मुबंई/DR, ITAT, Mumbai 6. गाड� फाइल/Guard file. BY ORDER, //True Copy//

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