BHARAT PETROLEUM CORPORATION LTD,MUMBAI vs. DCIT CIR 2(1), MUMBAI

At the time of hearing, Learned Counsel for the assessee submitted that the issue of granting of interest u/s. 244A(1)(b) on delayed refund of self-assessment tax is squarely covered by the decision of the Hon'ble Jurisdictional High Court in the case of Stock Holding Corporation of India Ltd v. CIT [53 taxman.com 106], copy of the order is placed on record. Learned Counsel for the assessee further submitted that in assessee’s own case for the Assessment Year 2004-05 in ITA.No. 6130/Mum/2014

Ld.DR placing reliance on the decision of the Hon'ble Supreme Court in the case of CIT v. Gujarat Fluoro Chemicals [358 ITR 291] submitted that assessee is entitled for interest only if it is provided for under the statute as was held by the Hon'ble Supreme Court and since no interest was provided on refund of self-assessment tax, no interest is liable to be paid to the assessee and the decision relied on by the assessee in the case of Stock Holding Corporation of India Ltd v. CIT (supra) is no longer good law in view of the decision of the Hon'ble Supreme Court in the case of CIT v. Gujarat Fluoro Chemicals (supra).

We have heard the rival submissions, perused the orders of the authorities below and the case laws relied on. At the outset, we find that the Ld.CIT(A) rejected the claim of the assessee holding that the appeal is not maintainable as the assessee challenged the order giving effect to the Tribunal before the Ld.CIT(A) wherein interest u/s. 244A(1)(b) was not granted by the learned Assessing Officer. The Ld. Counsel for the assessee did not argue this issue before us. i.e. maintainability of appeal

We also find that the Coordinate Bench in the case of Tata Communications Ltd v. ACIT in ITA.No.8592/Mum/2010 dated 24.07.2013 considered an almost a similar situation where the assessee filed appeal before the Ld.CIT(A) against the consequential order passed by the Assessing Officer while giving effect to the Ld.CIT(A) order wherein interest u/s.244A(1)(b) was not granted. The appeal was not entertained by the Ld.CIT(A) on the ground that it is not maintainable. The Coordinate Bench considered the issue as to whether an appeal is maintainable before the Ld.CIT(A) against not granting of interest u/s. 244A and taking note of the decision of the Hon'ble Jurisdictional High Court in the case of Calltex Oil Refining (India) ltd v. CIT (supra), it was held that an appeal is maintainable before the Ld.CIT(A). However, the ITAT restored the issue to the file of the Assessing Officer to allow the assessee an opportunity to plead its case with reference to grant of interest u/s. 244A(1)(b) as the (A.Y: 1999-2000) Bharat Petroleum Corporation Limited To Kochi Refineries Ltd appeal is not maintainable. While holding so the Coordinate Bench observed as under: “4. We have heard the parties, and perused the material on record. The issue arising for determination in the instant case is a pure legal issue, i.e., whether the assessee could, de hors its liability to tax, contest an order of assessment in appeal on the ground of non- grant of or otherwise the quantum of the interest granted u/s.244A of the Act. The decision by the Hon’ble jurisdictional high court in the case of Caltex Oil Refining (India) Ltd. (supra) relied upon by the assessee has been perused by us. In our view, the same squarely covers the issue at hand. The decision by the apex court in the case of Central (A.Y. 2001-02) Tata Communications Limited vs. Asst. CIT Provinces Manganese Ore Co. Ltd. vs. CIT [1986] 160 ITR 961 (SC), wherein the issue involved was the denial to liability and/or charge of interest u/s.215 at a lesser amount, stands duly considered and distinguished by the Hon’ble high court. It is in this context that its stands explained that clause (c) of section 246 is in two parts, so that the assessee's appeal would fall in the second part, i.e., disputing the tax as determined vide the assessment order. In view of our finding aforesaid, i.e., of the issue under reference as being squarely covered by the said decision, we do not consider it necessary to dwell on the other decisions in the matter sought to be relied upon by the assessee. The assessee had, thus, preferred a valid appeal, warranting adjudication. The ld. CIT(A) having not adjudicated the matter, holding the same as not appealable, the matter would warrant being restored back to his file for the purpose. So, however, as noted earlier, it is the assessing authority who has to grant the said interest, and whose order contains no reference to any reason for the non-grant of the mandatory interest u/s.244A; the law clearly prescribing the same for being granted along with the refund. Under the circumstances, we only consider it fit and proper to, setting aside the impugned order, restore the matter back to the file of the A.O. to allow the assessee an opportunity to plead its case with reference to grant of interest u/s.244A; we having not examined the issue on merits at all, and who shall decide the same per a speaking order; the matter being appealable. We decide accordingly.”

Coming to the merits of the case, as the Ld.CIT(A) did not go into the merits of the case, we are of the considered view that, it is appropriate to restore this matter to the file of the Ld.CIT(A) who shall decide the issue on merits keeping in view the decision of the Coordinate Bench in assessee’s own case for the Assessment Year 2004-05 and also the decision of the Hon'ble Jurisdictional High Court in the case of Stock Holding Corporation of India Ltd v. CIT (supra) wherein it has been held that interest is payable from the date of payment of tax on self-assessment to date of refund of amount u/s. 244A of the Act. Thus, we restore this matter to the file of the Ld.CIT(A) to decide the issue on merits, after providing adequate opportunity of being heard to the assessee.

In the result, appeal of the assessee is partly allowed.