THE DY. CIT., CIRCLE-1(1),, BARODA vs. GUJARAT STATE FERTILIZERS & CHEMICALS LTD., BARODA

Per Pramod Kumar, AM:

“1. On the facts and in the circumstances of the case and in law, the Ld. CIT(Appeals) erred in directing the AO to allow the interest u/s 244A of the Act on refund of interest under section 220(2) of the Act without appreciating the fact that as per the provisions of Section 244A of the Act, the assessee is not entitled for interest on refund of any interest as also held by the Hon’ble Supreme Court in the case of CIT vs. Gujarat Fluoro Chemicals 358 ITR 291 (SC) [2013].

ITA No. 2460/Ahd/2014 DCIT vs. Gujarat State fertilizers & Chemicals Ltd A.Y. 1997-98 Page 2 of 2 3. Learned representatives fairly agree that whatever we decide in ITA No.2459/Ahd/2014, which was heard along with this appeal, will apply mutatis mutandis here as well. Vide our order of even date, we have dismissed the said appeal on the basis of following reasoning.

“6. We find that short grievance of the revenue, as evident from the ground of appeal reproduced by us earlier, is that in the light of Hon’ble Supreme Court’s judgment in the case of CIT vs. Gujarat Fluoro Chemicals [(2013) 358 ITR 291 (SC)], interest under section 244A cannot be granted in respect of interest refunded which was wrongly charged under section 234B earlier. However, on a perusal of the said order, we find that Hon’ble Supreme Court was dealing with interest on delayed payment of interest by the Assessing Officer. Such an interest on interest was held to compensation for great prejudice caused to the assessee, when payment was inordinately delayed by decades, and not a matter of course in computation of statutory interest payable by the Assessing Officer. Interest refunded by the Assessing Officer, on account of incorrect levy earlier, is certainly not the same thing as a statutory interest on refund by the Assessing Officer. The reliance placed on this decision is thus wholly misplaced and is rejected. No other issue was raised in appeal, or even otherwise, before us. We, therefore, decline to interfere in the matter.”