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

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ITA 2460/AHD/2014Status: DisposedITAT Ahmedabad13 December 2017AY 1997-982 pages

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

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the Supreme Court's decision regarding interest on delayed payment of interest was not applicable to refunds of interest wrongly charged. Therefore, the AO's reliance on the judgment was misplaced.

What were the facts?

The Assessing Officer appealed against the CIT(A)'s order directing the allowance of interest under Section 244A on a refund of interest charged under Section 220(2). The AO argued that interest is not payable on interest refunds, citing a Supreme Court judgment.

What were the issues?

Whether interest under Section 244A is allowable on a refund of interest previously charged under Section 220(2). Whether the Supreme Court's ruling on interest on delayed payment of interest applies to this scenario.

Which sections of the Income-tax Act were involved?

Section 244A,Section 220(2)

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, AHMEDABAD ‘A’ BENCH, AHMEDABAD

Per Pramod Kumar, AM:

1.

By way of this appeal, the appellant Assessing Officer has challenged correctness of the order dated 4th June 2014, passed by the CIT(A)-I, Baroda, in the matter of order dated 25.02.2013 under section 154 of the Income-tax Act passed by the Assessing Officer, for the assessment year 1997-98.

2.

Grievances raised by the appellant are as follows:

“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].

2.

The appellant craves leave to add to, amend or alter the above grounds as may be deemed necessary.”

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.”

4.

We see no reasons to take any other view of the matter in the present appeal. Therefore, for the same reasons, as reproduced above, the grievance of the Assessing Officer is rejected.

5.

In the result, the appeal is dismissed. Order pronounced in the open Court on this 13th day of December, 2017.

Sd/- Sd/-

Mahavir Prasad Pramod Kumar (Judicial Member) (Accountant Member) Ahmedabad, the 13th day of December, 2017 **bt* Copies to: (1) The appellant (2) The respondent (3) Commissioner (4) CIT(A) (5) Departmental Representative (6) Guard File By order TRUE COPY Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad

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