UNION BANK OF INDIA,MUMBAI vs. DCIT (LTU) 2, MUMBAI

Per Manoj Kumar Aggarwal (Accountant Member) 1. The captioned appeals by assessee for Assessment Years [AY] 2003-04, 2007-08, 2009-10 & 2010-11 contest separate orders of Ld. first appellate authority. The revenue has filed cross-objections against the same. Since common issues are involved, we dispose-off the same by way of this common order for the sake of convenience and brevity. First we take up appeal & cross-objection for AY 2003-04. & CO No.211/Mum/2018, AY 2003-04 2.1 The grounds raised

2. The Ld. CIT(A) failed to note that since interest u/s 244A as computed in the order sheet involved issues both in law and on facts, the CIT(A) ought to have adjudicated the issue even when the rectification petition was pending.

3. The CIT(A) failed to note that AO had while computing interest u/s 244A wrongly segregated the refund granted into tax refund and interest refund and adjusted the tax refund from tax refund due and interest refund from interest refund due instead of adjusting the entire refund granted first against the interest refund due and thereafter against the tax refund due. The grounds raised by revenue in cross objection reads as under: - The ground of appeal filed by assessee has become infructuous in view of the fact that the Hon’ble Supreme Court has decided the issue of computation of interest u/s 244A of the Income Tax Act, in the case of CIT vs Gujarat Flouro Chemicals (Special leave petition no.11406 of 2008) in favour of the Revenue.” 2.2 Facts in brief are that the assessee is a Public Sector Bank who is finally assessed at Rs.216.84 crores on 12/12/2014 after giving effect to the appellate orders. Consequently, certain refund has accrued to the assessee. The assessee is aggrieved by method of adjustment of the refund granted to the assessee from time to time. As per the contentions to 1828/Mum/2017 CO.Nos.211 to 214/Mum/2018 Union Bank of India of Ld. Auhtorized Representative for Assessee [AR], Shri C.Naresh, the refund granted to the assessee should first be adjusted towards interest component and thereafter, to principal component in terms of order of this Tribunal rendered in assessee’s own case for AY 2008-09 [72 Taxmann.com 348], a copy of which has been placed on record. Per Contra, Ld. Departmental Representative [DR], Ms. Vidisha Kalra CIT- DR, submitted that the assessee is merely seeking interest on interest which is not mandated by law and squarely covered against the assessee by the decision of Hon’ble Apex Court rendered in CIT Vs. Gujarat Fluoro Chemicals [Special leave petition no.11406 of 2008]. The Ld. AR has controverted the same on the strength of a computation chart as placed before us in written submissions dated 03/08/2018.

3. We have carefully considered the same and perused relevant material on record. At the outset, the findings of Ld. CIT(A) are extracted here-in-below:- 3. The only ground raised in this appeal is that the Assessing Officer hs not computed correct amount of interest u/s. 244A. In this regard, it is noted that the Assessing Officer has not discussed this issue in the order and hence same does not arise from it. However, appellant submitted that an application u/s 154 dated 09.12.2016 raising the same issue, has been filed by it in the office of the Assessing Officer, which is pending. IT was requested that suitable directions may be issued to the Assessing Officer in this regard. Request of the appellant is quite reasonable. Accordingly, the Assessing Officer is directed to dispose of the appellant’s petition u/s 154 expeditiously.

The issue, in assessee’s own case for 2008-09 after considering the cited decision of Hon’ble Apex Court, has been concluded by this Tribunal in the following manner:- "Thus, since the statute itself has already prescribed a particular method of adjustment in explanation to section 140A (1), then justice, fairness, equity and good conscience demands that some method should be followed while making adjustment for refund of taxes, especially when no contrary provision has been to 1828/Mum/2017 CO.Nos.211 to 214/Mum/2018 Union Bank of India provided. Under these circumstances and aforesaid discussion, we find that the judicial proprietary demands that order of the Tribunal of earlier years must be followed and therefore we direct the AO to re-compute the amount of interest u/s. 244A by first adjusting the amount of refund already granted towards the interest component and balance left if any shall be adjusted towards the tax component" Upon due consideration, we find that the issue has already been adjudicated by the Tribunal in assessee’s own case. Therefore, without delving much deeper into the issue, Ld. AO is directed to re-compute the amount refundable to the assessee in terms of the decision of this Tribunal for AY 2008-09 by disposing-off application u/s 154 filed by the assessee. The assessee is directed to file the necessary computations / details in this regard. Needless to add that the assessee shall not be entitle for any interest on interest, whatsoever, in terms of the cited decision of Hon’ble Apex Court.

in this respect under the appeal as well as cross-objections stands allowed for statistical purposes. 5.2 The assessee, in AYs 2007-08 & 2010-11, by way of ground number 4.1 & 3.1 respectively, is also aggrieved by the fact that interest u/s 244A for the month of payment of tax or granting of refund has not to 1828/Mum/2017 CO.Nos.211 to 214/Mum/2018 Union Bank of India been provided to the assessee as against specific provisions for the same in Rule 119A. Accordingly, the Ld. AO is directed to consider the same in the light of Rule 119A. This ground for both the years stand allowed for statistical purposes.

6. The assessee, in AY 2007-08, by way of ground number 3, is also aggrieved by the fact that Ld. AO has not set off correct amount of brought forward losses as finally ascertained consequential to the orders of appellate authorities. We find that the assessee has already filed rectification application dated 13/12/2016 against the same. We find the adjustment to be consequential in nature and therefore direct the Ld. AO to consider the same in the light of application u/s 154 filed by the assessee. This ground stand allowed for statistical purposes.

7. Resultantly, the appeals as well as cross objections for all these three years stands allowed for statistical purposes. Conclusion

8. Resultantly, all the appeals as well as cross objections stands allowed for statistical purposes.

Order pronounced in the open court on 03rd October, 2018.