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Income Tax Appellate Tribunal, “D” BENCH, MUMBAI
आदेश / O R D E R भहावीय स िंह, उऩाध्मक्ष के द्वाया / PER MAHAVIR SINGH, VP: This appeal of assessee is arising out of the order of the Commissioner of Income Tax (Appeals)]-20, Mumbai, [in short CIT(A)], in dated 17.06.2019 for AY 2004- 05.
On the facts and circumstances of the case and in law, the learned CIT(A), erred in upholding the decision of the learned AO in not granting to the Appellant, interest under section 244A of the Act on the self-assessment tax paid, on the basis that the issue under consideration is contentious, and, therefore, not rectifiable under section 154 of the Act. The learned CIT(A), while upholding the order of the learned AO, has erred in disregarding the decision of the Hon’ble Supreme Court of India and the Hon’ble Jurisdictional High Court on the issue under consideration.
Brief facts are that the AO while giving effect to the order of Hon’ble Bombay High Court in appeal No. 4027 of 2010 dated 30.11.2011 a refund of Rs.19,36,980/- was issued by the Assessing Officer on 17.04.2017. Subsequently, the assessee vide application dated 16.07.2018 filed under section 154 of the Act claimed interest under section 244A of the Act on this refund of Rs.19,36,980/-and requested the Assessing Officer accordingly. The AO passed order on application under section 154 of the Act, vide order dated 20.08.2018 rejecting the claim of the assessee by stating that firstly, the refund has arisen on excess payment of self assessment tax and hence, interest
Before us, the learned Counsel for the assessee Shri Sunil M. Lala stated that the issue is squarely covered by the Jurisdictional high court in the case of Stock Holding Corporation of India Ltd. Vs. N.C. Tewari (2015)(373 ITR 282)(Bom.), wherein Hon’ble High Court after discussing the provision of section 244A(1) of the Act held that it is not covered under sub clause (a) of this provision but duly fall under sub clause (b) i.e. residuary clause fall under section 244A(1) of the Act. According to Hon’ble Supreme Court even self assessment tax attracts interest under section 244A(1)(b) of the Act. The relevant assessment year involved in appeal before us is 2004-05 and it is pre-amended year, when this fact was confronted to the learned Sr. DR, he only rely on the order of the CIT(A).
7. We have considered the rival submissions. On a bare analysis of Section 244A(1) of the Act it is clear that amount paid by the petitioner as tax on self assessment would not stand covered by Section 244A(1)(a) of the Act. This is so as it is neither the payment of tax by way of advance tax or by way of tax deducted at source. Thus tax paid on self assessment would fall under Section 244A(1)(b) of the Act, i.e. a residuary clause covering refunds of amount not falling under Section 244A(1) of the Act. The revenue contends that in the absence of tax on self assessment finding mention in Section 244A(1)(a) of the Act, no interest is payable under Section 244A(1) of the Act and Section 244A(1)(b) of the Act would have no application. This contention is opposed to the meaning of the provision disclosed even on a bare reading. If the tax paid is not covered by clause (a) of Section 244A(1), it falls within clause (b), which is a residuary clause. Besides, this contention stands negatived by the CBDT Circular bearing No.549 11.4 The provisions of the new section 244A are as under:— (i) Sub-section (1) provides that where in pursuance of any order passed under this Act, refund of any amount becomes due to the assessee then— (a) if the refund is out of any advance tax paid or tax deducted at source during the financial year immediately preceding the assessment year, interest shall be payable for the period starting from the 1st April of the assessment year and on the date of grant of the refund. No interest shall, however, be payable, if the amount of refund is less than 10 per cent of the tax determined on regular assessment; (b) if the refund is out of any tax, other than advance tax or tax deducted at source or penalty, interest shall be payable for the period starting from the date of payment of such tax or penalty and ending on the date of the grant of the refund. (Refer to example III in para 11.8).
The contention of revenue is that no interest at all is payable to the petitioner under Section 244A(1)(a) and (b) of the Act unless the amounts have been paid as tax. It would not cover cases where the payment is gratuitous as is evident from the fact that the petitioner in its computation after paying tax on self assessment of Rs.2.60 crores seeks a refund of Rs.47 lacs. According to him it has to be refund of amounts paid as tax. We find that Section 244A(1) of the Act commences with the word "when refund of any amount becomes due to the assessee under this Act...". Sub-clause (b) thereof commences