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Facts
The assessee pointed out a typographical error in the ITAT's order dated 06.02.2023 and 06.12.2023, where incorrect paragraphs were cited concerning the grant of interest on income tax refunds and additional interest under Section 244A. The original order inadvertently referred to paragraphs 10-12 instead of paragraph 9 for the ground related to non-grant of interest, and paragraph 9 instead of paragraphs 10-12 for the ground related to additional interest.
Held
The Tribunal acknowledged the typographical error. For the ground concerning the grant of interest, the correct reference to paragraph 9 of the prior ITAT order was affirmed, directing the recalculation of interest up to the date of actual refund receipt. For the ground concerning additional interest under Section 244A(1A), the Tribunal noted that its applicability is prospective from 01.06.2016. Consequently, the issue was restored to the Assessing Officer to examine the facts and apply the ratio of precedents on the applicability of additional interest.
Key Issues
Correction of typographical errors in the ITAT's order regarding cited paragraphs for grounds on interest and additional interest, and determination of the applicability of Section 244A(1A) for calculating additional interest.
Sections Cited
244A
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Income Tax Appellate Tribunal, “E” BENCH : MUMBAI
Before: Shri Amarjit Singh & Shri Rahul Chaudhary]
ITA No. 2618 to 2622/M/2023
IN THE INCOME TAX APPELLATE TRIBUNAL “E” BENCH : MUMBAI [Before Shri Amarjit Singh, Accountant Member & Shri Rahul Chaudhary, Judicial Member]
I.T.A Nos. 2618 to 2622/Mum/2023 Assessment Year : 2001-02, 2006-07, 2007-08, 2010-11 & 2011-12
Tata Sons Private Limited -vs.- JCIT-OSD, Circle-2(3)(1), Bombay House, 24, Homi Mody Street, Mumbai. Fort, Mumbai-400001.
[PAN: AAAACT 4060 A] (Respondent) (Appellant)
C O R R I G E N D U M Per Amarjit Singh, AM:
The assessee vide letter dated 09.07.2024 received on 22.07.2024 has submitted that while adjudicating ground no. 1 in respect of non-grant of interest on income tax refund till the date of receipt of actual refund inadvertently para 10 to 12 from the order of ITAT dated 06.02.2023 vide ITA No. 2362/M/2023 has been mentioned instead of para 9 of the order of ITAT which pertained to the issue raised in the aforesaid ground no. 1 of the order. Further, it is also reported that while adjudicating the ground no. 4 of the assessee pertaining to assessee in not granting interest u/s 244A of the Act inadvertently para no. 9 of the earlier order of the ITAT in the case of the assessee dated 06.12.2023 in ITA No. 2362/M/2023 was incorporated as against the exact para 10-12 of that order.
On perusal of material on record, we find inadvertently there is typographical error while incorporating the order of the ITA dated 06.12.2023 in ITA 2362/M/2023 as referred above. Therefore, at page 4 of the ITAT order while adjudicating ground no. 1 of appeal of the assessee, the relevant part of decision should be read as under: “9. On the issue of grant of refund till the date of issue of refund, the ld AR submitted that the issue is squarely covered in favour of the assessee vide the decisions of Hon'ble Bombay High Court in case of CIT vs. Pfizer Limited [1991] 191 ITR 626 (Bom) and also of City bank NA Mumbai Vs. CIT in ITA No. 6 of 2001 as well as the decision of CIT Us. K.E.C International in ITA No. 1038 of 2000. Respectfully following the aforesaid precedents, in our considered view, the assessee is justified in seeking interest u/s 244A of the Act upto the date of receipt of the refund order, i.e. 18.08.2022. Accordingly, the AO is directed to re-calculate the interest upto the date of actual receipt of refund by the assessee. It is ordered accordingly.”
ITA No. 2618 to 2622/M/2023
Further at para8 of the order of ITAT while adjudicating ground no. 4 of the appeal of the assessee, the relevant operating part of the decision referred should be read as under: “10. The next issue contended pertaining to the interest calculation is that additional interest u/s. 244A(1A) to be calculated on the total amount of refund Including interest. In this regard the ld. AR drew our attention to the provisions of sub-section (1A) of section 244A of the Act, in terms of which, when there is a delay in granting refund due to the assessee as a result of delay in passing an order giving effect to the appellate order or revisional order, the assessee is entitled to the additional interest on such amount of refund at 3% p.a. for the period as mentioned therein. The ld. AR submitted that the ITAT order, was passed on 04.02.2015 & 01.01.2016 and the present OGE has been passed on 08.03.2016 and refund was received on 18.08,2022. The provision of Section 244A(1A) came into effect from 01.06.2016 and hence from 01.06.2016 to 31.08.2022 there is a delay of 75 months for which the assessee is entitled for additional 3% interest under section 244A(1A). The ld. AR in this regard relied on the decision of the coordinate bench in case of ACIT y/s Bharat Petroleum Corporation Ltd. (Mumbai ITAT "B" Bench) (30.06.2021) (TTA No. 5231 to 5233 of 2019). The ld. AR further submitted that interest u/s 244A(1A) of the Act cannot be held as interest-on-interest as held by the Hon. Supreme Court and followed by High Court(s). In this regard our attention was drawn to the decision of the Hon. Delhi High Court in the case of India Trade Promotion Organization v/s CIT (06.09.2013) 38 taxmann. com 233 wherein by placing reliance on the decision of the Hon. Supreme Court of India in the case of CIT v/s. H.E.G. Ltd. (2010) 324 ITR 331, it is held that the words " refund of any amount becomes due to the assessee" would include in its scope tax as well as interest which has accrued and is payable upto the date of refund. Accordingly, it is further held that when the revenue does not pay full amount of refund but part amount is paid, it will be liable to pay interest on the balance outstanding amount. This does not amount to payment of interest on interest".
We heard the parties and perused the material on record. We notice that the coordinate bench in the case of Bharat Petroleum Corporation Ltd (supra) has considered the applicability of section 244A(1A) for assessment years prior to 01.06.2016 and held that-
From the reading of the above decision, we are of the considered opinion that provisions of section 244A (1A) would apply only prospectively w.e.f 01. O6.2016 and hence additional interest would be eligible only from that date and not from 01.04.2016. As the Hon'ble High Court has imposed caveat explaining the circumstances under which the additional interest can be granted u/s. 244A[14| of the Act, we are of the view that this matter should go back to the file of the Assessing Officer for examining the facts of the assessee in the present appeals and for application of the ratio of decision in view of the observations of their lordships on applicability of the additional interest to the present appeals. Thus, we restore this issue to the file Assessing Officer who shall examine the issue afresh in the light of the decision of the Hon'ble Gujarat High Court (supra). ,
The provisions of sub-Section (1A) to section 244A are inserted by the Finance Act, 2016 as a remedial measure to compensate the assessee in Cases where there are delays in granting
ITA No. 2618 to 2622/M/2023
refunds due on account of delay in passing Order giving effect to appellate or revisional orders. Applying the ratio laid down by the coordinate bench in the case of Bharat Petroleum Corporation Ltd (supra), we are of the considered view that the provisions of section 244A(1A) would be applicable in assessee's case from 01.06.20 16 till the date of actual receipt of refund and accordingly we remit the issue back to the AO to examine the issue afresh and calculate the additional interest under section 244A(1A) in accordance with law."
Sd/- Sd/- [ Rahul Chaudhary] [ Amarjit Singh ] Judicial Member Accountant Member Dated : 05.08.2024 [Biswajit, Sr. PS]
Copy of the order forwarded to: 1.Appellant: 2. Respondent 3. CIT(A), 4. CIT, 5. CIT(DR),