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Facts
The Department appealed against the CIT(A)'s order allowing interest u/s 244A, contending that the CIT(A) erred by allowing interest on MAT credit, which is restricted by Section 115JAA. The assessee argued that the interest was allowed on a refund of advance tax paid, not MAT credit, and submitted evidence of advance tax payment and refund for AY 2004-05.
Held
The Tribunal noted an ambiguity in the CIT(A)'s order, which inconsistently referred to both refund of advance tax and MAT credit. It reiterated that interest u/s 244A is payable on refunds arising from advance tax but not on MAT credit. The issue was remanded to the Assessing Officer for verification to determine the true nature of the refund.
Key Issues
Whether interest under Section 244A of the Income Tax Act, 1961, is allowable on a refund arising from Minimum Alternate Tax (MAT) credit or only on a refund from advance tax paid, requiring clarification on the nature of the refund.
Sections Cited
244A, 154, 115JAA, 115JA
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Income Tax Appellate Tribunal, DELHI BENCH “D”, DELHI
Before: SHRI VIKAS AWASTHY & SHRI NAVEEN CHANDRA
अपीलाथ� �ारा/ Appellant by : Shri Amaninder Singh Dhindsa, Sr. DR �ितवादी�ारा/Respondent by : Ms. Alka Arren, CA Shri Vijay Shah, CA सुनवाई क� ितिथ/ Date of hearing : 18/07/2024 घोषणा क� ितिथ/ Date of pronouncement : 26/07/2024 आदेश/ORDER
PER VIKAS AWASTHY, JM:
This appeal by the Department is directed against the order of Commissioner of Income Tax (Appeals)-38, New Delhi [in short ‘the CIT(A)’] dated 25.07.2018, for assessment year 2004-05.
2 ITA 6351/Del/2018 (AY 2004-05)
The solitary issue raised by the department in appeal is against allowing interest u/s. 244A of the Income Tax Act, 1961 (hereinafter referred to as 'the Act').
Shri Amaninder Singh Dhindsa representing the department submitted that a perusal of the order dated 05.06.2018 passed u/s. 154 of the Act by the Assessing Officer (AO) would show that benefit of MAT credit amounting to Rs. 1,13,99,406/- was allowed to the assessee without any interest. The First Appellate Authority by placing reliance on certain decisions has allowed interest to the assessee u/s. 244A of the Act on refund arising on account of MAT credit. The ld. DR referring to the provisions of Section 115JAA of the Act submitted that proviso to sub-section (2) to Section 115JAA of the Act restricts payment of interest on tax credit allowed under sub section (1). As per the provision sub section (1) to section 115JA of the Act where any amount of tax is paid by the assessee company for any assessment year then, credit in respect of tax so paid shall be allowed to him, in accordance with the provisions of Section 115JAA of the Act. In light of the aforesaid provisions assessee is not eligible to claim interest on MAT credit. 4. Per contra, Ms. Alka Arren appearing on behalf of the assessee submits that the assessee has not claimed interest on MAT credit. The assessee has claimed interest on refund of advance tax paid. To substantiate his contention the ld. AR referred to the computation of income at page 6 of the paper book. She pointed that assessee has paid advance tax to the tune of Rs. 7,23,00,000/- for AY 2004- 05, out of which tax amounting to Rs. 1,17,11,770/- has been refunded. The 3 ITA 6351/Del/2018 (AY 2004-05)