ACIT 2(1)(2), MUMBAI vs. CENTRAL BANK OF INDIA, MUMBAI

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ITA 3975/MUM/2015Status: DisposedITAT Mumbai22 July 2016AY 2008-093 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 interest portion of a refund previously issued should not be ignored when calculating further interest payable under Section 244A. This decision followed a precedent set in the assessee's own case by the Tribunal.

What were the facts?

The Assessing Officer determined a refund for the assessee, including interest under Section 244A. The assessee contended that the interest calculation was incorrect as it did not account for previously refunded interest. The dispute centered on whether prior interest refunds should be ignored when calculating fresh interest under Section 244A.

What were the issues?

The primary issue was the correct method of calculating interest under Section 244A when a portion of the refund already included interest. The interpretation of Section 244A regarding the inclusion of prior interest refunds was also a key issue.

Which sections of the Income-tax Act were involved?

Section 244A,Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “I”, MUMBAI

Before: SHRI G.S.PANNU& SHRI AMARJIT SINGH.

For Appellant: Shri B.C.S.Naik
For Respondent: Shri Madhur Agarwal
Hearing: 19/07/2016Pronounced: 22/07/2016

ORDER PER G.S.PANNU,A.M: The captioned appeal filed by the Revenue pertaining to assessment year 2008-09 is directed against an order passed by CIT(A)- 4, Mumbai dated 09/03/2015 which in turn arises out of an order dated 22/03/2013 passed under section 250 of the Income Tax Act, 1961 (in short ‘the Act’).

2.

In this appeal, the Revenue has raised the following Grounds of appeal:-

1. “On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in holding that the interest portion of the refund issued earlier has to be ignored for the purpose of calculating interest under section. 244A of the Income Tax Act, 1961, payable to the (Assessment Year : 2008-09) assessee, on refund arising out of the order giving effect to other of appellate authority.” 2. “On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in interpreting the provision of Section 244A of the Income Tax Act, 1961.”

3. The respondent assessee is a Public Sector Bank engaged in the business of banking and other related financial activities. The brief facts, relevant for the present purpose, are that the Assessing Officer passed an order under section 250 of the Act on 22/3/2013, giving effect to the appellate order of the CIT(A), whereby the refund was determined at Rs.166,10,67,723/- including interest due to the assessee under section 244A of the Act of Rs.47,71,41,344/-. However, as per the assessee such interest under section 244A was liable to be determined at Rs.49,07,21,750/-. The area of difference between assessee and Revenue was as to whether the interest portion of the refund issued earlier was to be ignored for the purpose of calculating interest under section 244A of the Act, while determining the refund arising out of the order giving effect to the appellate order.

4. In appeal before CIT(A), assessee relied upon the order of the Tribunal in the assessee’s own case for various assessment years namely, 1991-92,1997-98,1999-2000,2007-08 and 2008-08 decided vide to 5435/Mum/2013 dated 31/12/2014, wherein identical controversy has been adjudicated in favour of the assessee. The CIT(A) following the aforesaid precedents upheld the plea of the assessee and directed the Assessing Officer to calculate the interest payable to the assessee under section 244A without reducing the interest under section 244A, which was a part of the refund earlier

(Assessment Year : 2008-09) granted. Against such a decision of the CIT(A) Revenue is in appeal before us.

5.

Before us, it was a common point between the parties that the order of the Tribunal dated 31/12/2014(supra), which has been relied upon by CIT(A), continues to hold the field as it has not been altered by any higher authority and, therefore, the order of the CIT(A) does not require any interference. Accordingly, the order of the CIT(A) is hereby affirmed and Revenue fails in its appeal.

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