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Facts
The assessee, State Bank of India (formerly State Bank of Bikaner and Jaipur), filed an appeal against the assessment order. The assessee claimed interest under section 244A, but the Assessing Officer (AO) granted only a partial amount. The CIT(A) directed the AO to verify tax payments and recompute the interest.
Held
The Tribunal held that the AO's appeal lacked merit because the CIT(A)'s direction to recompute interest was in line with Supreme Court and coordinate bench decisions. The practice followed by the Department should also be in consonance with the Income Tax Act.
Key Issues
Whether the AO erred in adjusting the refund towards interest and tax amount, leading to excess interest grant, and whether the CIT(A)'s direction for recomputation of interest under Section 244A was sustainable.
Sections Cited
143(3), 254, 244A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “G” BENCH, MUMBAI
PER PRASHANT MAHARISHI, AM:
The Assistant Commissioner Of Income Tax 2 (2) (1) Mumbai (the learned AO) has filed this appeal against appellate order passed by the National faceless appeal Centre (NFAC), Delhi (the learned CIT – A) for assessment year 2015 – 16 on 8/2/2023 in case of state bank of India (state bank of Bikaner and Jaipur , Now merged with state bank of India) [ Assessee] wherein appeal filed by the assessee against assessment order passed under section 143 (3) read with section 254 of The Income Tax Act, 1961 (The Act) dated 26/3/2019 passed by The
The learned AO has raised only ground that the learned CIT – A has erred in directing the AO to adjust the refund granted first towards interest amount refundable and thereafter consider the balance amount of tax amount refundable which will lead to excess grant of interest contrary to the practice followed by the Department and the intention of the legislation and therefore the order of the learned CIT – A is not sustainable in law.
The fact of the case shows that assessee is state bank of Bikaner and Jaipur which merged with the state bank of India later filed its original return of income on 27 November 2015 at a total income of Rs. 8,862,873,010. Assessment under section 143 (3) was completed on 31 December 2017 wherein the total income of the assessee was assessed at Rs. 37,470,583,560/–. Assessment order was challenged before the first appellate authority who passed an order on 26 February 2019. The appeal effect was provided by the AO of the order of the appellate authority on 26/03/2019 and total income of the assessee was determined at Rs. 13,60,87,853/-. Assessee preferred an appeal against short grant of interest under section 244A.
Assessee claimed before the learned CIT – A that assessee is entitled to an interest of Rs. 374,757,309/– whereas the
Firstly, the appeal is filed late and therefore a condition request was made by letter dated 10/4/2023 wherein it was mentioned that delay is because of pressing time for filing appeal before the honourable High Court different assesses simultaneous plea also having the timelines in the same. And therefore, it has resulted into filing of the appeal. The appeal is delayed by only 2 days. No objection is raised by the assessee; therefore, we condone the delay.
After hearing the parties, we find that appeal of the assessee has been decided by the learned CIT – A by directing the assessing officer to verify the details of tax
Section 244A of the Income Tax Act pertains to the payment of interest on refunds. It states that if the taxpayer is entitled to a refund, they shall be paid an additional interest amount as determined by the Act. The interest is calculated from the date of payment of tax to the date of grant of the refund. Regarding the order of set-off, it is only dispute that according to the assessee that the interest amount is first set off against any outstanding interest payable by the taxpayer. Once the interest liability is satisfied, the remaining interest amount is set off against any outstanding tax payable by the taxpayer. If there is any interest remaining after the set- off, it is paid to the taxpayer.
The claim of revenue is that from taxes already refunded, taxes are to be reduced and from interest, interest granted is to be reduced for determining eligible amount for interest u/s 244A of the Act. According to assessee
Therefore, we do not find any merit in the appeal of learned AO as ld. AO is directed to verify the claim of assessee in accordance with law. Further, the ground of appeal raised is that if the order of the learned CIT – A is followed it will lead to excess grant of interest which is contrary to the practice followed by the Department and the intention of the legislation. We find that the practice followed by the Department should be in consonance with the provisions of the income tax act. Therefore, there is no merit in the grounds of appeal of the AO. In the result solitary ground of appeal is dismissed.
In the result, appeal of the learned Assessing Officer is dismissed
Order pronounced in the open court on 26.02.2024.
Sd/- Sd/- (PAVAN KUMAR GADALE) (PRASHANT MAHARISHI) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Mumbai, Dated: 26.02.2024 Sudip Sarkar, Sr.PS/Dragon
Sr. Private Secretary/ Asst. Registrar Income Tax Appellate Tribunal, Mumbai