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Income Tax Appellate Tribunal, “I” BENCH, MUMBAI
PER MAHAVIR SINGH, JM:
This appeal by the Revenue is arising out of the order of Commissioner of Income Tax (Appeals)-14, Mumbai, [in short CIT(A)] in
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appeal No. CIT(A)-14/IT-41/13-14 dated 27-02-2015. The Assessment was framed by the Addl. Commissioner of Income Tax, Circle-7(3), Mumbai (in short Addl. CIT/ AO) for the assessment year 2009-10 order dated 22.03.2013 under section 143(3) read with section 144C(3) of the Income Tax Act, 1961(hereinafter ‘the Act’).
The only issue in this appeal of Revenue is against the order of CIT(A) allowing the claim of the assessee in respect to interest on self- assessment under section 244A(1)(b) of the Act. For this Revenue has raised the following two grounds: -
“(i) The Learned CIT (A) has erred on facts and in law in allowing the claim of the assessee in respect of interest U/s 244A(l)(b) on refund, without properly appreciating the factual and legal matrix as clearly brought out by the Assessing Officer in the order.
(ii) The Learned CIT (A) has erred on facts and in law in directing the AO to grant interest on refund from the date of taxes paid including self-assessment tax ignoring the Explanation to section 244A(1)(b) of the Income-tax Act,1961, which means only amount paid in response to notice u/s 156 eligible for refund.”
Briefly stated facts are that the AO originally processed return of income for AY 2009-10 under section 143(1) of the Act dated 30-03-2011 by raising a demand of ₹ 3,71,41,570/- as against the refund claimed by assessee in the revised return, e-file, at ₹ 5,99,66,866/-. The assessee filed an application dated 11.04.2011 in respect of an error in
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computation of long term capital gains and total income. The AO understated the advance tax payment and also granted short credit for TDS. The assessee company also requested for grant of interest on the refund. The AO passed rectification order under section 154 of the Act dated 05.03.2012 and granted refund of ₹ 2,62,32,165/-. But did not grant interest under section 244A(1)(b) of the Act on self-assessment tax paid by assessee. The assessee filed an appeal before CIT(A) against rectification order passed under section 154 of the Act dated 05.03.2012 for short grant of TDS credit and not allowing interest under section 244A(1)(b) of the Act on self-assessment tax paid by assessee company. The CIT(A) passed an appellate order on 09.10.2012 directing the AO to grant credit for TDS and to pass an speaking order on granting of interest on self-assessment tax under section 244A(1)(b) of the Act. The AO to give an appeal effect to the order of CIT(A) dated 09.10.2012, passed order dated 12.03.2013 and granted credit for TDS for a sum of ₹ 1,78,81,510/-. But the AO did not grant interest on refund of ₹ 4,66,63,682/- arising out of self-assessment tax paid by assessee company amounting to ₹ 20 crores. The AO’s observation was that interest under section 244A(1)(b) of the Act is not applicable as the refund amount on the self-assessment tax is less than 10% of the assessed tax. Aggrieved against this order, the assessee preferred the appeal before CIT(A). The CIT(A) vide order dated 27.02.2015 allowed the claim of interest on self-assessment tax by observing in para 3.1 and 3.2 as under: -
“3.1 I have gone through the income tax computation form, ITNS 150A and seen that the total tax liability was determined at Rs.1,09,22,76,176/- against which pre-paid taxes have been taken at Rs.1,15,12,76,245/-
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resulting into refund of Rs.5,90,00,069/-. On this, for the late payment of advance tax, the AO has charged 234B an amount of Rs.84,59,996/- and 234C an amount Rs.35,76,391/- resulting into refund of Rs. 4,66,63,682/-. Then after taking refund amount already issued earlied Rs.2,62,32,165/-, the AO has determined the refund amount at …2,04,31,517/-.
3.2 I have also gone through section 244A(1)(b) and noted that the section is applicable in a case where the refund is on account of any tax other than the one collected at source u/s.206C or paid by advance tax or paid u/s. 199 and on the same the interest will be calculated @ 1 1/2 for every month or part of the month from the date of payment of tax on which refund is granted. In view of this wording of the section, which Clearly says in provision that for refund amount of refund has to be greater than tax determined by minimum by 10%, I am in agreement with the appellant that the same does not say that Self-Assessment tax paid alone, has to be higher than 10% of assessed tax. Further, following the ratio of decision given by Hon'ble Punjab and Haryana High Court as well as ITAT, Kolkata, as cited above, the issue is totally in favour of the appellant and hence the AO is directed to grant interest on refund from the date of taxes paid including Self-
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Assessment tax. The ground taken by appeal is allowed.”
Aggrieved, now Revenue is in appeal before Tribunal.
We have heard the rival contentions and gone through the facts and circumstances of the case. Before us, the learned Sr. Departmental Representative heavily relied on AO’s order. On the other hand, the learned Counsel for the assessee argued that this issue is settled by Hon’ble Bombay High Court in the case of Stock holding corporation vs. NC Tewari [2015] 373 ITR 282 (Bombay) wherein, after considering the provisions of section 244A (1b) of the Act, the Hon’ble High Court considered this issue and allowed the claim of the assessee vide para 12 to 14 as under: -
“12. Similarly, the next contention urged on behalf of the revenue that the payment of interest should only be made from the date of notice under Section 156 of the Act is issued to the petitioner in terms of Explanation to Section 244A(1)(b) of the Act cannot be accepted for two reasons. Firstly, as held by the Supreme Court in Tata Chemicals Ltd.(supra), the Explanation would have effect only where payments of tax have been made pursuant to notice under Section 156 of the Act. In this case, the payment has not been made pursuant to any notice of demand but prior to the filing of the return of income in accordance with Section 140A of the Act. Secondly, the provisions of Section 244A(1) (b) very clearly mandate that the revenue would pay interest on the amount refunded for the period commencing from the date the payment of tax is made to the
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revenue upto the date when refund is granted to the revenue. Thus, the submission of Mr. Pinto that the interest is payable not from the date of payment but from the date of demand notice under Section 156 of the Act cannot be accepted as otherwise the legislation would have so provided in Section 244A 1(b) of the Act, rather then having provided from the date of payment of the tax.
We find support for our view from the decisions rendered by Karnataka High Court in CIT v. Vijaya Bank [2011] 338 ITR 489/201 Taxman 371/12 taxmann.com 485 and Delhi High Court in CIT v. Sutlej Industries Ltd. [2010] 325 ITR 331/190 Taxman 136 (Delhi). In both cases in identical circumstances it was held that interest is payable from the date of payment of the tax on self- assessment to the date of refund of the amounts under Section 244A of the Act.
Accordingly, for all the aforesaid reasons, we set aside the impugned order dated 28 September 1999. We direct the Assessing Officer to compute the interest payable from the date of payment on self-assessment tax i.e. 31 August 1994 till the date of refund i.e. 24 October 1998. The revenue is directed to compute the interest due to the petitioner and pay the same within six weeks from today.”
On this the learned Sr. DR relied on the decision of Hon’ble Delhi High court in the case of CIT vs. Engineers India Ltd. (2015) 373 ITR 377 (Del) wherein the decision of Hon’ble Bombay High Court was considered. The learned Counsel for the assessee also relied on the
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decision of Hon’ble Calcutta High Court in the case of CIT vs. Birla Corporation Ltd. in ITA No. 526 of 2004, wherein the issue of refund on self-assessment tax was granted from the date of making payment till the date of grant of refund from the date of payment till the date of grant of refund by observing in final finding as under: -
“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.
An error, which is by no means self-evident, cannot be called an apparent error. Nevertheless a mistake capable of being rectified u/s. 154 is not limited to clerical or arithmetical mistakes only. However it does not include any mistake which may be discovered by a complicated process of investigation, argument or proof. Reference in this regard may be made to T.S. Balaram, ITO v Volkart Bros (1971) 82 ITR 40 (SC). A decision on a
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debatable point of law or a disputed question of fact is not a mistake apparent from the record. The ordinary meaning of the word “apparent” is that it should be something, which appears to be so ex facie that it does not admit scope for any argument or debate. It, therefore, follows that a decision on a 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. Reference in this regard may be made to CIT v MMTC Ltd (supra). 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 no ambiguity in it. Hence the assessee is clearly entitled to claim interest u/s.244A on refund of excess self assessment tax.
In K.K.J. Foundations –Vs.- The Assistant Director of Income Tax (ITA. No. 242 of 2014) the Kerala High Court by Judgment dated 8th September 2015 held as follows:-
“By invoking the power of rectification, the ultimate conclusion of a decision cannot be changed. So also, the employment of the words phraseologies in Sec.154 shows that by rectification it intended only to correct any mistake and amend the same accordingly. It is a settled proposition of law that rectification
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is a process by which a mistake is set at right. It thus means correcting an error which was apparent from record and not deciding the matter over and again on merits and that the rectified order does not supersede the original order but continues with the incorporated changes. Moreover, we have come across two judgments of the ‘Hon'ble Apex Court in 'S. Nagaraj v. State of Karnataka’ [(1993) Supp. 4 SCC 595] and 'Ammonia Supplies Corporation Pvt. Ltd. v. Modern Plastic Containers Pvt. Ltd.' [AIR 1998 SC 3153], by which it was held in the former judgment that rectification of an order stems from fundamental principle that justice is above all. It is exercised to remove the error and not for disturbing finality. In the latter judgment, it was held that rectification connotes something what ought to have been done but by error is not done and what ought not to have been done was done requiring rectification. Rectification, in other words, is the failure to comply with the directions under the Act. Therefore, it is apposite and clear that the power under Sec. 154 can be invoked only to correct an error and not to disturb a concluded finding.”
Thus in the instant case there was no mistake apparent from the record which could be rectified u/s. 154 of the Act. In that view of the matter, the question Nos.1, 3 and 4 are answered in the
10 ITA Nos. 2521/Mum/2015 affirmative. The question No.2 is answered in the negative. We therefore direct the assessing officer to compute the interest payable from the date of payment of tax on the basis of self-assessment till the date of grant of refund. The revenue is directed to compute the interest due to the assessee and pay the same within a reasonable time.”
After hearing both the sides and going through the facts of the case, it is clear that as per the decision of the Hon’ble Bombay High Court in the case of The Stock Holding Corporation Of India Ltd. (Supra) and Calcutta High Court in the case of Birla Corporation Limited (supra), we are of the view that refund u/s 244A(1)(b) of the Act on self assessment tax is to be paid from the date of payment of self assessment tax till the date of grant of refund. Respectfully following the Hon’ble Bombay High Court in the case of The Stock Holding Corporation Of India Ltd. (Supra), we are of the view that the CIT(A) has rightly directed the AO to allow the interest in term of the decision of Hon’ble Bombay High Court. The appeal of the Revenue is dismissed.
In the result, the appeal Revenue is dismissed.
Order pronounced in the open court on 10-07-2018.
Sd/- Sd/- (राजेश कुमार /RAJESH KUMAR) (महावीर स िंह /MAHAVIR SINGH) (लेखा दस्य / ACCOUNTANT MEMBER) (न्याययक दस्य/ JUDICIAL MEMBER) मुिंबई, ददनािंक/ Mumbai, Dated: 10-07-2018 सुदीप सरकार, व.निजी सचिव / Sudip Sarkar, Sr.PS
11 ITA Nos. 2521/Mum/2015 आदेश की प्रनिलिपप अग्रेपिि/Copy of the Order forwarded to : अपीलाथी / The Appellant 1. प्रत्यथी / The Respondent. 2. आयकर आयुक्त(अपील) / The CIT(A) 3. आयकर आयुक्त / CIT 4. ववभागीय प्रयतयनधि, आयकर अपीलीय अधिकरण, मुिंबई / DR, ITAT, 5. Mumbai गार्ड फाईल / Guard file. 6.
आदेशािुसार/ BY ORDER, त्यावपत प्रयत //True Copy// उप/सहायक पंजीकार (Asstt. Registrar) आयकर अपीिीय अचिकरण, मुिंबई / ITAT, Mumbai