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Income Tax Appellate Tribunal, “B” BENCH, MUMBAI
Before: SHRI RAJENDRA, AM & SHRI AMARJIT SINGH, JM
O R D E R
PER AMARJIT SINGH, JM:
The revenue has filed the present appeal against the order dated 12.10.2015 passed by the Commissioner of Income Tax (Appeals) - 4, Mumbai [hereinafter referred to as the “CIT(A)”] relevant to the A.Y.2006- 07.
The revenue has raised the following grounds: - “
1. The order of the CIT(A) is opposed to law and facts of the case.
2. On the facts and the circumstances of the case, the CIT(A) has erred in directing the AO to adjust the refund granted, first towards interest amount refundable and thereafter consider the balance against tax amount refundable which will lead to excess
ITA. NO.36/M/2016 A.Y. 2006-07 grant of interest contrary to the practice followed by the department and the intention of the legislation.”
The brief facts of the case are that the assessee filed its return of income on 28.11.2006 for the A.Y. 2006-07 declaring total income to the tune of Rs.3,04,41,10,497/-. The assessee revised the return income on 29.03.2008 declaring total income to the tune of Rs.1,56,07,17,497/-. Thereafter, the case was selected for scrutiny and the assessment u/s 143(3) of the Act was completed on 22.12.2008 computing the total income to the tune of Rs.8,05,47,99,870/-. Thereafter, the assessment was reopened u/s 147 of the Act on the issue of granting the interest u/s 244A of the Act. Thereafter, the notice was given and after getting the reply of the assessee, the interest granted u/s 244A was withdrawn. The assessee filed an appeal before the CIT(A) who allowed the claim of the assessee, therefore, the revenue has filed the present appeal before us.
We have heard the argument advanced by the Ld. Representative of the parties and perused the record. The Ld. Representative of the Department has argued that the CIT(A) has wrongly directed the AO to adjust the refund firstly towards the interest amount and subsequently on the amount refundable to the assessee, therefore, in the said circumstances, the order passed by the CIT(A) is not justifiable hence liable to be set aside. However, on the other hand, the Ld. Representative of the assessee has strongly relied upon the order passed by the CIT(A) in question. It is also argued by the Ld. Representative of the assessee that the case of the assessee has duly been covered by the decision of the Hon’ble ITAT in case title as Union Bank of India Vs. DCIT dated
ITA. NO.36/M/2016 A.Y. 2006-07 23.06.2014. Before going further, it is necessary to advert the finding of the CIT(A) on record.: -
5.4 I have carefully considered the facts of the case and the submissions of the Ld. AR. I have also considered the case laws relied upon by the Ld. AR. The issue arising for consideration is where a refund is due to the appellant and a part of that refund has been granted, then whether the part refund granted is to be adjusted against the interest on or against the tax refund is due. Accordingly, to the appellant, it is to be first adjusted against the interest refund due and thereafter against the tax refund due whereas the AO in the computation of interest has adjusted the refund against the tax refund that has become due. On the issue, I find that the Hon’ble Jurisdictional ITAT Mumbai in the case of Union Bank of India has held as under: - “6. We have carefully considered the rival submissions. As rightly pointed out by the assessee Hon’ble Delhi High Court rightly explained that the amount refunded by the revenue has to be adjusted towards interest payable to the assessee and the balance, if any, shall be adjusted towards tax. On this principle there is no contrary decision placed before us, we therefore agree with the plea of the assessee and direct the AO accordingly, Respectfully following the above decision, the AO is directed to reduce the refund granted first against the interest payable to the appellant and the balance towards tax. The interest due u/s 244A of the I.T. Act should accordingly be recalculated. However, if any contrary decision is there on this issue, AO shall be at his liberty to proceed accordingly and give appellant opportunity of being heard.”
On appraisal of the above said finding, we noticed that the CIT(A) has decided the matter of controversy on the basis of the decision of the Hon’ble ITAT Mumbai Bench in the case of Union Bank of India Vs. DCIT dated 23.06.2014. The facts are not distinguishable at this stage. No contrary law to the law relied by the ITA. NO.36/M/2016 A.Y. 2006-07 CIT(A) has been produced before us. In view of the said circumstances and by honoring the decision of the Hon’ble ITAT in the case of Union Bank of India (supra), we are of the view that the CIT(A) has decided the matter of controversy judiciously and correctly which is not liable to be interfere with at this appellate stage. Accordingly, we decide this issue in favour of the assessee against the revenue.