PAHARPUR COOLING TOWERS LIMITED. ,KOLKATA vs. ACIT, CC-2(1), KOLKATA

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ITA 408/KOL/2023Status: DisposedITAT Kolkata04 September 2024AY 2013-14Bench: Shri Sanjay Garg (Judicial Member), Shri Rakesh Mishra (Accountant Member)4 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that advance tax, TDS, TCS, and MAT credit are forms of taxes already paid and are given set off after the tax is determined in an assessment. Therefore, the 'tax determined' should be considered before these credits. As the refund was less than 10% of the tax determined before credits, the assessee was not eligible for interest.

What were the facts?

The assessee claimed interest on a tax refund under Section 244A. The Assessing Officer later withdrew this interest, citing a proviso to Section 244A which states no interest is payable if the refund is less than 10% of the tax determined. The assessee argued that 'tax determined' should be after considering MAT credit, while the Revenue contended it should be before any credits.

What were the issues?

The key issue was the interpretation of 'tax determined' in the proviso to Section 244A(1) for the purpose of calculating eligibility for interest on refund. Specifically, whether 'tax determined' includes or excludes prior tax credits like MAT.

Which sections of the Income-tax Act were involved?

Section 244A,Section 143(1),Section 143(3),Section 154,Section 155

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “C” BENCH KOLKATA

Before: Shri Sanjay Garg & Shri Rakesh Mishra

Assessment Year: 2013-14 Paharpur Cooling Towers Ltd………...........………………....Appellant 8/1/B, Diamond Harbour Road, Kolkata – 700027. [PAN: AABCP8017C] vs. ACIT, Central Circle-2(1), Kolkata.…….…............................…..…..... Respondent Appearances by: Shri Nitesh Agarwal, AR, appeared on behalf of the assessee. Shri Sailen Samaddar, Addl. CIT- Sr. DR, appeared on behalf of the Revenue. Date of concluding the hearing : June 06, 2024 Date of pronouncing the order : September 04, 2024 आदेश / ORDER संजय गग�, �या�यक सद�य �वारा / Per Sanjay Garg, Judicial Member: The present appeal has been preferred by the assessee against the order dated 23.02.2023 of the Commissioner of Income Tax (Appeals)- 20, Kolkata [hereinafter referred to as ‘CIT(A)’] passed u/s 250 of the Income Tax Act (hereinafter referred to as the ‘Act’).

2.

The appeal is time barred by two days. A separate application for condonation of delay has been filed. Considering the shortness of delay, the delay in filing the appeal is hereby condoned.

3.

Though the assessee in this appeal has taken as many as five grounds of appeal, however, the sole issue raised in this appeal is whether the assessee is entitled to interest on refund of the taxes overpaid u/s 244A of the Act.

Assessment Year: 2013-14 Paharpur Cooling Towers Ltd 4. The brief facts of the case are that the assessee had filed return of income on 29.11.2013 declaring total income of Rs.219,22,23,640/- under regular provisions of the I.T. Act and book profit of Rs.239,40,63,400/- under the provisions of section 115JB of the Act. Order u/s.143(3) was passed on 23.12.2016 determining total income at Rs.244,78,64,630/- under regular provisions of the Act and book profit was determined at Rs.246,16,54,158/- u/s 115JB of the Act. Appeal was filed against order u/s.143(3) and the Ld. CIT(A) has passed order u/s 250 on 07.11.2017. After giving effect to the order of Ld. CIT(A), total income was determined at Rs.221,11,04,510/- under regular provisions of the Act and book profit was determined at Rs.239,66,28,850/-. Refund of Rs.6,82,08,871/- was determined and interest u/s.244A, amounting to Rs.1,61,92,659/- was also granted on the refund. Order giving effect to the order of the Ld. CIT(A) was passed on 10.01.2018. Subsequently. it was noticed by the Assessing Officer that the gross tax amount on the income determined after giving appeal effect was Rs.71,70,78,483/-. Refund of Rs.6,82,08,871/- was less than 10% of the gross tax. He, therefore, noted that as per proviso to section 244A, the assessee was not eligible for interest on refund, as the refund amount was less than 10% of the tax amount. To rectify this mistake, notice u/s.154/155 was issued on 24.12.2020. There was no compliance to the rectification notice. Hence, order u/s.154 had been passed on 29.12.2020 by the Assessing Officer, withdrawing the interest granted u/s.244A in the order giving appeal effect.

5.

The assessee preferred appeal before the ld. CIT(A), however, remained unsuccessful.

6.

We have heard the rival contentions and gone through the record. As per the provisions of section 244A of the Act, where refund of any amount becomes due to the assessee under the Income Tax Act, he Assessment Year: 2013-14 Paharpur Cooling Towers Ltd shall be entitled to receive in addition to the said mount simple interest thereon at the rate as prescribed under clause (a) and (aa) of section 244A(1) of the Act, however, Proviso to section 244A(1) states as under:

“Provided that no interest under clause (a) or clause (aa) 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 143 or on regular assessment;” 6.1 Now, the issue raised before us is that what would be the amount of tax determined u/s 143(1) of the Act or in a regular assessment. The plea of the ld. AR is that the ‘tax determined’ would be the amount arrived at after giving MAT credit of the earlier year. However, the plea of the revenue is that the tax determined will be the amount of tax determined as per the provisions of Income Tax Act before giving any credit of TDS, TCS, MAT credit etc. In this case, if the amount of ‘tax determined’ is taken as per the plea of the assessee i.e. the amount payable after giving MAT credit, then the difference of the amount refundable and the ‘tax determined’ would be more than 10% and the assessee will be entitled to the said refund along with interest u/s 244A of the Act. However, if the amount of ‘tax determined’ is taken before giving any credit of taxes already paid/MAT credit, then, ofcourse, the amount of ‘tax determined’ will be a higher amount and, therefore, the difference between the ‘tax determined’ and refund due will be less than 10% and the assessee will not be entitled to the interest on such refund as per Proviso to section 244A(1) of the Act.

6.2 We have given our careful thought to the plea raised by both the ld. representatives of the parties. In our view, the advance tax paid, TDS or TCS deducted or even the MAT credit are in the shape of credits of the taxes already paid, which are given set off or credit after the ‘tax determined’ in an assessment carried out u/s 143(1) or 143(3), as the case may be. In the case in hand, the tax determined in the assessment Assessment Year: 2013-14 Paharpur Cooling Towers Ltd carried out in the case of the assessee was Rs.71,70,78,483/- and thereafter, the credit of the taxes already paid including advance tax, TDS, TCS and MAT credit has to be given and in this case, after giving credit of taxes already paid including MAT credit, the refund due was Rs.6,82,08,871/-, which was less than 10% of the tax determined in an assessment carried out u/s 143(3) of the Act. Therefore, there is no merit in the appeal of the assessee and the same is accordingly dismissed.

7.

In the result, the appeal of the assessee stands dismissed.

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