THE SOUTH INDIAN BANK LIMITED,THRISSUR vs. DCIT, THRISSUR

Brief facts of the case are that the assessee is a private scheduled bank, engaged in the business of banking. The return of income for the A.Y. 2007-08 was filed on 12/11/2007 declaring The South Indian Bank Ltd.. income of Rs. 2,65,00,020/-. Subsequently, the same was revised on 25/09/2008 declaring total income of Rs. 5,06,00,592/-. Against the said return of income, the assessment was completed by the Addl. CIT, Range-1, Trichur(for short, 'AO')vide order dated 29/09/2008 passed u/s. 143(3) of the Income Tax Act, 1961 (for short, 'the Act') at a total income of Rs. 211,21,24,830/- after making certain disallowances. On appeal before CIT(A)vide order dated 04/12/2013 granted partial relief. On further appeal to the ITAT in dt. 24/12/2014, the assessment order was modified at a total income of Rs. 144,91,03,583/-. While passing modification order vide order dated 06/07/2020, the AO had not granted interest u/s. 244A(1A) of the Act.

Being aggrieved, the appellant-bank filed an appeal before the CIT(A), who vide impugned order dismissed the appeal by holding that the provisions of section 244A(1A) are not retrospective and are effective only w.e.f. 01/06/2016. Accordingly, appeal was dismissed.

Being aggrieved, the appellant-bank is in appeal before this tribunal in the present appeal.

We have heard the rival contentions and perused the material available on record. The issue that arises for our determination is with regard to computation of amount of eligible interest on refund due to the appellant bank. The amount of refund was determined The South Indian Bank Ltd.. pursuant to the consequential order passed to the order of ITAT. While determining the amount of refund, it appears that the AO had not granted interest u/s. 244A. Section (1A) was inserted by the Parliament by Finance Act, 2016 w.e.f. 01.06.2016 governing grant of interest in such situations. Undisputedly, the consequential order to the ITAT order was passed on 06/07/2020after the provisions of section 244A(1A) came into effect w.e.f. 01/06/2016. The CBDT has clarified that the consequential order giving effect to the appellate order passed after 01/06/2016 interest u/s. 244A is allowable and also reference can be made to the decision of Nima Specific Family Trust vs. ACIT(12 ITR-OL 566). Therefore, in view of this legal position, we are of the considered opinion, the appellant is entitled for interest us/ 244A(1A) of the Act. Accordingly, the matter is restored to the file of AO to grant interest on the refund determined on the consequential order after affording a reasonable opportunity of hearing.