NORTH AMERICAN COAL CORPORATION INDIA P LTD,PUNE vs. ASST COMMISSIONER OF INCOME TAX, CIRCLE 2, PUNE

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ITA 688/PUN/2021Status: DisposedITAT Pune08 August 2022AY 2014-154 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal observed that the CIT(A) had not disputed the grant of interest, only that it should be as per the Act. Relying on the Supreme Court's decision in Tata Chemicals Ltd., the matter was remanded to the AO for re-adjudication.

What were the facts?

The assessee claimed TDS credit for AY 2015-16, the income for which was offered in AY 2014-15. The CIT(A) directed the AO to grant interest under Section 244A on the refund arising from this TDS credit, but the assessee was aggrieved by the quantum and period of interest.

What were the issues?

Whether the assessee is entitled to interest under Section 244A on TDS credit, and if so, from what date and at what rate, considering the Supreme Court's ruling.

Which sections of the Income-tax Act were involved?

Section 244A,Section 250,Section 253

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, ‘A’ BENCH, PUNE

For Appellant: Shri Siddarth Chaugule
For Respondent: Shri Arvind Desai

ORDER

PER PARTHA SARATHI CHAUDHURY, JM :

1.

This appeal preferred by the assessee emanates from the order of the ld. CIT(A)-3, Pune dated 11-06-2020 for A.Y. 2014-15 as per the following grounds of appeal.

“Based on the facts and circumstances of the case. the Appellant respectfully craves leave to prefer an appeal under section 253 of the Income Tax Act. 1961 (hereinafter referred to as 'the Act'), against the order dated 11th June 2020 issued by the Commissioner of income Tax (Appeals)- 3, Pune [hereinafter referred to as 'Ld. CIT(A),], under section 250 of the Act. The Grounds of Appeal raised by the Appellant, as set out below, are independent of. and without prejudice to, one another:

1. Granting TDS credit along with the consequential income tax refund 1.1. On the facts, and in the circumstances of the case, and in law, the Ld. CfT(A) has erred in not allowing TDS credit amounting to INR 902.634 appearing in the form 26AS of A Y 2015-16 (subsequent year), whereas the Income corresponding to such TDS credit has been offered to tax in A Y 2014-5 (current year)

2. Interest under section 244A of the Act on income tax refund arising due to TDS credit 2.1 On the facts, and in the circumstances of the case, and in law, the Ld. CfT(A) has erred in not granting correct interest under section 244A of the Act on the income tax refund arising due to TDS credit of INR 70,53,096.- 2.2 On the facts. and in the circumstances of the case, and in law, the Ld. CIT(A) has erred in not granting interest under section 244A of the Act from the date of payment of tax. “

North American Coal corpn. A.Y. 2014-15 2. At the outset, the ld. Counsel appearing for the assessee submitted that they are not pressing Ground NO. 1. Having heard the submissions of the ld. Counsel, Ground No. 1 is dismissed.

3. The only effective ground therefore, is ground No. 2 wherein the assessee is aggrieved stating that the ld. CIT(A) has erred in not granting correct interest u/s 244A of the Income-tax Act, 1961 (hereinafter referred to as “the Act”) in respect of refund arising due to TDS credit of Rs. 9,02,634/-. In this regard, the ld. CIT(A) has addressed the issue as follows:

8. GROUND NO. 3; In this regard the appellant has contended that the A.O erred in non-granting of INR 20,19,455/- calculated till July2019 on the above refund u/s 244A of the Income-tax Act, 1961. 8.1 DECISION: This prayer of the appellant is consequential in nature. The A.O is directed to grant interest as per provisions of the Act.

3.

Therefore, it is evident from the aforestated decision that the ld. CIT(A) has directed the ld. A.O to grant interest as per provisions of the Act. The ld. CIT(A) has not disputed to the grant of interest to the assessee. Therefore, there did not arise any grievance to file this appeal. However, at the time of hearing, the ld. Counsel has argued that the decision of the Hon‟ble Apex Court in the case of Union of India Vs. Tata Chemicals Ltd. (2014) 43 taxmann.com 240 (SC) wherein Hon‟ble Apex Court has held that the interest has to be given by observing as follows:

“39. In the present case, it is not in doubt that the payment of tax made by resident/depositor is in excess and the department chooses to refund the excess payment of tax to the depositor. We have held the interest requires to be paid on such refunds. The catechise is from what date interest is payable, since the present case does not fall either under clause (a) or (b) of section 244A of the Act. In the absence of an express provision as contained in clause (a), it cannot be said that the interest is payable from the 1st of April of the assessment year. Simultaneously, since the said payment is not made pursuant to a notice issued u/s 156 of the Act, Explanation to clause (b) has no application. In such cases, as the opening words of clause (b) specifically referred to “as in any other case”, the interest is payable from the date of payment of tax. The sequel of our discussion is the resident/deductor is entitled not only the refund of tax deposited u/s 195(2) of the Act, but has to be refunded with interest from the date of payment of such tax.”

North American Coal corpn. A.Y. 2014-15 4. The ld. D.R vehemently submitted that this appeal is not maintainable since there is no grievance at all from the order of the ld. CIT(A) which needs to be addressed by the Bench.

5.

Taking the totality of the facts and circumstances, we observe that there is no denial of granting interest to the assessee even in the order of the ld. CIT(A). The only thing which the ld. CIT(A) has stated that such grant of interest has to be in accordance with the provisions of the Act and which in our considered view is absolutely correct. Inspite of having no grievance on the proposition that the assessee is eligible for interest, the ld. Counsel has relied on the decision of the Hon‟ble Supreme Court in the case of Tata Chemicals Ltd. (supra), therefore, in the interest of justice, the matter is remanded back to the file of the ld. A.O to re-adjudicate as per law even considering the decision of the Hon‟ble Apex Court as relied upon by the assessee. Ground No. 2 is therefore, allowed for statistical purposes.

6.

In the result, the appeal of the assessee is partly allowed for statistical purposes.

Order pronounced in the open Court on this 8th August 2022.

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