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Income Tax Appellate Tribunal, “H” BENCH, MUMBAI
Before: SHRI DT GARASIA, JM & SHRI ASWANI TANEJA, AM
O R D E R PER D. T. GARASIA, JM:
The captioned appeal by the Revenue is directed against the order of the CIT(A)-16, Mumbai dated 10/02/2015, pertaining to the Assessment Year 2009-10, which in turn has arisen from the order passed by the Assessing Officer dated 08/12/2011 under section 143(3) of the Income Tax Act, 1961 (in short ‘the Act’).
The following grounds are raised in the appeal:
2 Blue Dart Express Ltd. 1. ” Whether, on the facts and in the circumstances of the case, the ld. CIT-(A) erred in granting interest u/s 244A on the self-assessment tax paid by the assessee thereby ignoring the provisions of Sec 244A(1)(a) of the Act which states that the assessee is entitled to interest u/s 244A out of tax paid only by way of advance tax.”
2. “Whether on the facts and in the circumstances of the case, the Ld. CIT-(A) erred in ignoring the fact that the taxes were paid after 31.03.2009 and 30.06.2009, which means the tax of 1 crore was not paid as advance tax but as self-assessment tax and therefore interest u/s 244A should not be granted on the same.” The appellant prays that the order of the CIT(A) on the above grounds be set aside and that of the AO be restored”.
The short facts are as under:
The assessee has filed the original return of income of Rs.82,34,17,524/- and claimed credit for tax deducted at source of Rs.20,62,04,687/-. Subsequently, assessee filed revised return declaring taxable income of Rs.82,34,17,524/- and claiming credit for TDS of Rs.21,06,64,646/-. The Assessing Officer passed the assessment order u/s 143 of the Act dated 8th December 2011 computing total taxable income of the assessee at Rs.83,22,81,450/- and determining refund of Rs.3,65,29,592/- including interest u/s 244A of the Act amounting to Rs.37,57,410/-. Subsequently, it was seen from the record that the amount refundable was less than 10% of the tax determined and the assessee was not eligible for any interest u/s 244A of the Act. The Assessing Officer was of the view that assessee was not eligible for interest u/s 244A which has resulted in irregular grant of interest of Rs.37,57,410/- in the order u/s 143(3). The assessee was given show cause notice and after show cause notice assessee did not reply, therefore, he
3 Blue Dart Express Ltd. 154 of the Act and withdrew the wrongly allowed interest u/s 244A of the Act of Rs.37,57,410/-.The matter carried to CIT(A) and CIT(A) has allowed the appeal of assessee by observing as under:
“3.2 I have considered the AO’s Order and submissions of the assessee. The Assessing Officer has not granted interest on self-assessment tax. The Appellant placing reliance on the decisions of the Mumbai Tribunals as well as decisions of the Delhi, Karnataka, Rajasthan and Karnataka High Courts contended that the interest under section 244A, wherein it has been held that the assessee is entitled to receive interest under Section 244A of the Act on self-assessment tax. Respectfully following the same, AO is directed to allow Interest under section 244A of the Act on self-assessment tax of Rs.1,00,00,000/-. Hence this ground no.3 of the appellant is allowed”.
The Ld. DR submitted that the Assessing Officer has given show cause notice before passing the order u/s 154 of the Act and while passing the order u/s 154 of the Act, the assessee did not reply to show cause notice. Moreover, the assessee is not entitled for any refund on the ground that the amount refundable was less than 10% of the tax determined, therefore, assessee was not eligible for any interest u/s 244A of the Act.
The Ld. AR submitted that as per Section 244A of the Income Tax Act, particularly sub-section (1), so also clauses thereof do not give rise to the issue of applicability of sub-section (2) or (3) of relevant statutory provisions, namely Section 244A of the Act. The Ld. AR submitted that the assessee is entitled for the interest u/s 244A(1)(b) on refund on excess amount paid as self- assessment tax. This view is supported by the decisions of Jurisdictional High Court in case of Commissioner of Income Tax vs. Indian Oil Corporation, of 2012 dated 12.9.2014and Stock Holding Corporation of India Ltd. vs.
4 Blue Dart Express Ltd. N.C. Tiwari Commissioner of Income Tax, Mumbai City –III, 53 Taxmann.com 106 (Bombay) as also the decision of Hon’ble Karnataka High Court in the case of CIT vs. N.G.E.F. Ltd., 244 ITR 665 (Kar) and the decision of Hon’ble Madras High Court in the case of CIT vs. Cholamandalam Investment and Finance Co. Ltd., 166 Taxman 132 (Madras). The SLP filed by the Department against the order of Hon’ble Madras High Court was dismissed by the Hon’ble Supreme Court (SLP No. 16877/2008).
We have heard the learned representatives of the parties and perused the record. In this connection, we refer to the provisions of section 244A (1), which read as under: -
“244. (1) [Where refund of any amount becomes due to the assessee under this Act], he shall, subject to the provisions of this section, be entitled to receive, in addition to the said amount, simple interest thereon calculated in the following manner, namely: -
(a) Where the refund is out of any tax [paid under section 115WJ or] [collected at source under section 206C or] paid by way of advance tax or treated as paid under section 199, during the financial year immediately preceding the assessment year, such interest shall be calculated at the rate of [one-half per cent] for every month or part of a month comprised in the period from the 1st day of April of the assessment year to the date on which the refund is granted:
Provided that no interest shall be payable if the amount of refund is less than ten per cent of the tax as determined [under [sub-section (1) of section 115WE or] sub-section (1) of section 143 or] on regular assessment;
5 Blue Dart Express Ltd. (b) In any other case, such interest shall be calculated at the rate of [one-half per cent] for every month or part of a month comprised in the period or periods from the date or, as the case may be, dates of payment of the tax or penalty to the date on which the refund is granted.”
On perusal of Section 244A,it is seen that the payment of interest on self- assessment tax is covered by clause (b) of section 244A(1) of the Act. As per Section 244(1)(b)of the Act, interest is payable on the excess payment of self- assessment tax. In the CBDT Circular No. 549, dated 31/10/1989 it stated that if the refund is out of tax other than advance tax or tax deducted at source or penalty, interest shall be payable for the period starting from the date of payment of such tax or penalty and ending on the date of grant of the refund. The Hon’ble Madras High Court in case of Cholamandalam Investment and Finance Co.Ltd. (supra)held that where assessee is entitled to refund there is a statutory liability upon the revenue to pay the interest on such refund on general principles and to pay interest on sums wrongfully retained. The SLP filed by the Department against Hon’ble Madras High Court has been dismissed by the Hon’ble Supreme Court (SLP No. 16877/2008). We find that the Jurisdictional High Court in case of CIT vs. M/s Indian Oil Corporation Limited(supra) has held that interest is payable u/s 244(1)(b) of the Act on refund of excess amount paid on self-assessment tax. The interest is payable from the date of payment of tax on self-assessment to the date of refund of amount u/s 244A of the Act. The Hon’ble Bombay High court has also considered the decisions of Hon’ble Delhi High Court and Hon’ble Madras High Court. Therefore, we are of the view that CIT(A) is justified in granting the 6 Blue Dart Express Ltd. 244A of the Income Tax Act on the self-assessment tax of Rs.1 crore.
In the result, Department’s appeal is dismissed.
Order pronounced in the open court 17 February, 2017.