ACIT 2(2)(1), MUMBAI vs. ICICI PRUDENTIAL AMC LTD, MUMBAI

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “C”, MUMBAI BEFORE SHRI C.N. PRASAD, HON'BLE JUDICIAL MEMBER AND SHRI G. MANJUNATHA, HON'BLE ACCOUNTANT MEMBER ITA NO. 3540/MUM/2017 (A.Y: 2007-08) A.C.I.T, Circle – 2(2)(1) v. M/s. ICICI Prudential AMC Ltd., Room No. 545, 5th Floor, 8th Floor, Peninsula Tower, Aayakar Bhavan, M.K. Road, Peninsula Corporate Park, Mumbai-400 020 Lower Parel, Mumbai- 400 013 PAN: AAACI 1000 K (Appellant) (Respondent) Assessee by : None Department by : Shri Abi Rama Kartikeyan

Date of Hearing : 14.11.2018 Date of Pronouncement : 30.01.2019

O R D E R PER C.N. PRASAD (JM) 1. This appeal is filed by the Revenue against the order of the Ld. Commissioner of Income–tax (Appeals)-6, Mumbai [hereinafter in short “Ld.CIT(A)”] dated 10.02.2017 for the Assessment year 2007-08.

2 ITA NO. 3540/MUM/2017 (A.Y: 2007-08) M/s. ICICI Prudential AMC Ltd., Act and thus interest on Self-Assessment tax paid is not covered by clause (b) u/s 244A(1) of the I T Act also. 2. For these and other grounds that may be urged at the time of hearing, the decision of the CIT(A) may be set aside and that of the AO restored.” 3. In spite of issue of notice none appeared on behalf of the assessee

nor any adjournment was sought. Thus, we proceed to dispose of this

appeal on hearing the Ld. DR on merits.

below. We find that the issue in appeal is squarely covered by the

decision of the Hon’ble Jurisdictional High Court in the case of Stock

Holding Corpn. Of India Ltd. v. CIT [53 taxmann.com 106] and decisions

of various other High Courts. We noticed that the Ld. CIT(A) following the

said decisions allowed the claim of the assessee for interest u/s. 244A on

excess self-assessment tax paid. While allowing the claim of the

assessee the Ld. CIT(A) observed as under: -

“6.2 Ground No.2: 6.2.1 Vide this ground, appellant has agitated against non-granting of interest u/s.244A on self-assessment tax. The appellant claimed a refund of Rs.5,35,42,419/- in its return of income. The order was revised u/s.154 of the Act on 20.11.2012 for granting of TDS credit. On going through the records, the AO noticed that the assessee had been granted interest u/s.244A on self-assessment tax paid of Rs.60,00,000/-. Further, the tax credit by way of TDS and advance tax amounting to Rs.30,87,76,231/- was in excess of tax payable not only with reference to returned income but also as per assessed income. As assessee had paid self-assessment tax in excess, the AO sought explanation from the assessee and proposed to withdraw the interest u/s.244A paid on self-assessment tax. In response, the assessee submitted that they were entitled for interest u/s.244A receivable by them u/s.244A(1)(b). However, the AO rejected the contention of the assessee since assessee had suo moto paid excess tax by way of self- assessment tax. 6.2.2 During the course of appellate proceedings, a written submission was filed which finds place in para 5 of this order. It was submitted by the appellant that

3 ITA NO. 3540/MUM/2017 (A.Y: 2007-08) M/s. ICICI Prudential AMC Ltd., clause 'a' of section 244A(1) of the Act covers interest on refund arising on account of tax paid by way of advance tax, TDS etc. It was further submitted that clause 'b' of section 244(1) covers interest on refund in "any other case". According to the appellant, its case is covered by the interest arising on account of payments of tax other than the payments covered u/s.244A(1)(a). Since the payment of self- assessment tax is not specifically covered by section 244A(1)(a) of the Act, the same should be covered u/s.244A(1)(b) of the Act. 6.2.3 In support of its claim, appellant placed reliance on the following case laws:- (i) Stock Holding Corporation of India Ltd. v. CIT(53 taxmann.com 106)(Bom HC) wherein it was held that interest is payable u/s.244A of the Act from the date of payment of the tax paid on account of self-assessment to the date of grant of refund. "7. 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 u/s.244A(1)(b) of the Act, i.e. a residuary clause covering refunds of amount not falling u/s.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 u/s.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......" (ii) CIT v. Birla Corporation Limited (66 taxmann.com 276) wherein the Hon'ble Calcutta High Court has held as under:- "32. U/s.154 of the Act only a "mistake apparent from the record" is rectifiable. Thus the precondition to invoke section 154 is the presence of a mistake and that the same must be apparent from the record. The power to rectify a mistake u/s. 154, however, does not extend to revision or review of the order. The word apparent means something, which is clearly visible or understood or obvious. Therefore a mistake which can be rectified u/s. 154 is one which is patent, which is obvious and whose discovery is not dependent on argument or elaboration. The rectification of an order does not imply that the original order is replaced by a completely new order. In the instant case the assessing officer has attempted to substitute the original order which is not permissible u/s. 154." 26. we are of the opinion that Clause (b) of Sub-Section 1 of Section 244A is residual in nature and provides for interest on refund of excess self- assessment tax paid by the assessee. Furthermore the explanation to section 244A(1)(b) would have no application since the tax in question was not paid consequent to any notice of demand u/s. 156, rather it was paid u/s. 140A. Hence according to mandate of section 244A(1)(b) interest is

4 ITA NO. 3540/MUM/2017 (A.Y: 2007-08) M/s. ICICI Prudential AMC Ltd., payable on refund of excess self assessment tax from the date of payment of such tax to the date when the refund is granted...." 35. Section 244A does not mandate that interest cannot be allowed on self assessment tax paid u/s. 140A. As discussed earlier, it cannot be said that interest u/s.244A can be allowed only in cases where excess payments of tax is made consequent to a notice of demand u/s. 156. The language of the Act is clear and there is ambiguity in it. Hence the assessee is clearly entitled to claim interest u/s.244 A on refund of excess self assessment tax." iii) CIT v. M.M.T.C. Ltd. (246 ITR 725)(Delhi HC) wherein the Hon'ble Delhi High Court has held that a decision on a debatable point of law or a disputed question of fact is not a mistake apparent from record. The plain meaning of the word 'apparent' u/s. 154 of the Act is that it must be something which appears to be so ex-fade and it is incapable of argument or debate. It, therefore, follows that a decision on the debatable point of law or fact or failure to apply the law to a set of facts, which remains to be investigated, cannot be corrected by way of rectification u/s. 154 of the Act. (iv) ITO v. Volkart Bros. (82 ITR 50)(SC) wherein the Hon'ble Supreme Court has held that a mistake apparent on the record must be an obvious and patent mistake and not something which can be established by a long drawn process of reasoning of points on which there may be conceivably two opinions. A decision on a debatable point of law is not a mistake apparent from the record. (v) CIT v. Punjab Chemical & Crop Protection Ltd. (57 taxmann.com 283)(P&H HC) wherein the Hon'ble Punjab & Haryana High Court has held as under:- "11. It may be observed that in so far as the nature of payment of tax is concerned, the tax deducted at source, advance by way of self- assessment, after its adjustment in the tax liability of the assessee on regular assessment loses its original character and becomes tax paid in pursuance of the liability. Once that is so, it cannot be held that the assessee is only entitled to interest under section 244A(1)(b) on tax deducted at source or advance tax and not on self-assessment tax paid under section 140A of the Act which was found to be paid in excess. The assessee shall be entitled to interest under section 244A(1)(b) of the Act on the refund of self-assessment tax as well." (vi) Sutlej Industries v. CIT (325 ITR 331) (Delhi HC) wherein the Hon'ble Delhi High Court has held that in case the self-assessment tax paid by the assessee u/s. 140A is refunded, the assessee would be entitled to interest thereon since the self-assessment tax falls within the expression 'refund of any amount'. The computation of interest on self-assessment tax has to be in terms of section 244A(1)(b), i.e. from the date of payment of such amount up to the date on which refund is actually granted. (vii) CIT v. Vijaya Bank (12 taxmann.com 485)(Karnataka HC) wherein the Hon'ble Karnataka High Court held that the assessee's case did not fall under clause (a) or Explanation to clause (b) of section 244A(1).The said excess payment should be refunded along with interest from the date of payment of such tax till the date of refund.

5 ITA NO. 3540/MUM/2017 (A.Y: 2007-08) M/s. ICICI Prudential AMC Ltd., "13. In the instant case, it is not in dispute that the assessee had paid a sum of Rs.15.5 crores on 29.06.2002, even before the date of filing of the returns. It is that amount which is ordered to be refunded as excess payment. Though the occasion to order for refund arose after the assessment order in which the payment of tax was adjusted towards the tax liability, the case does not fall under clause (a) of Explanation to clause (b). The said excess payment is to be refunded with interest from the date of payment of such tax that is from 29.06.2002, till the date of refund. This is precisely what the Appellate Commissioner as well as the Tribunal has said. It is in accordance with law. No illegality nor any case for interference is made out. The substantial question of law is answered in favour of the assessee and against the revenue." (viii) CIT v. Cholamandalam Investment & Finance Co. Ltd. (166 Taxman 132) wherein the Hon'ble Madras High Court has held that the law is well-settled that even for the refund of tax paid u/s. 140A on self-assessment, the assesses is entitled to interest. Further, it is also trite of law that wherever the assessee is entitled to refund, there is a statutory liability on the revenue to pay interest on such refund on general principles to pay interest on sums wrongfully retained. (ix) Tifco Holdings Ltd. v. ACIT [ITA No.5224/Mum/2014] while dealing with the issue of interest u/s.244A on tax paid by way of self-assessment, the Hon'ble Mumbai Tribunal followed the decision in the case of Stock Holding Corporation (supra) and held as under: " We have considered the submissions of the parties and perused the material available on record. At the outset, learned counsel for the assessee submitted, the issue in dispute has been decided in favour of the assessee by the Hon'ble Jurisdictional High Court in Stock Holding Corporation India Ltd, v/s CIT [2015/ 53 Taxmann.com 106 (Bom.). A copy of judgement was also placed before the Bench. On a perusal of the aforesaid Judgement of the Hon'ble Jurisdictional High Court, it is observed while deciding identical nature of dispute of grant of interest under section 244A, on refund arising out of payment of self-assessment tax under section 140A, the High Court in very clear terms held that self- assessment tax paid under section 140A, comes within the purview of section 244A(1)(b) of the Act, hence, assessee is entitled to receive interest under section 244A on the refund arising out of self-assessment tax....." (x) Maharaja Shree Ummaid Mills Ltd. v. DCIT [ITA Nos.271/JP/2015] wherein the Hon'ble Jaipur Tribunal following the decision in the case of Birla Corporation Limited (supra), held that the scope of clause (b) of section 244A(1) is much wider and the revenue is liable to pay the interest on the excess amount required to be refunded in respect of the self-assessment tax to the date of refund granted. 6.2.4 Respectfully following the decisions of honourable High Courts cited above, the appeal of the assessee is allowed. AO is directed to examine the claim of the appellant and grant interest on excess payment of self-assessment tax paid of Rs.60,00,000/- as per provision of law.

6 ITA NO. 3540/MUM/2017 (A.Y: 2007-08) M/s. ICICI Prudential AMC Ltd., 5. On a perusal of the Ld. CIT(A) order, we find that the Ld. CIT(A) followed the decision of the Hon’ble Jurisdictional High Court in the case of Stock Holding Corpn. Of India Ltd. v. CIT (supra) which is squarely covered the issue. Thus, we do not find any inference in the order passed by the Ld. CIT(A). Ground raised by the Revenue is rejected.

Order pronounced in the open court on the 30th January, 2019

Sd/- Sd/- (G. MANJUNATHA) (C.N. PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai / Dated 30/01/2019 Giridhar, Sr.PS

Copy of the Order forwarded to: 1. The Appellant 2. The Respondent. 3. The CIT(A), Mumbai. 4. CIT 5. DR, ITAT, Mumbai 6. Guard file.

//True Copy// BY ORDER (Asstt. Registrar) ITAT, Mum