JCIT, BANGALORE vs. M/S CANARA BANK, BANGALORE

PDF · subscribers
ITA 287/BANG/2014Status: DisposedITAT Bangalore24 July 2015AY 2005-066 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 upheld the CIT(A)'s decision, finding that the AO had not provided reasons for disallowing the Section 90 relief and had erred in calculating the interest under Section 244A. The Tribunal directed the AO to allow the refund by adjusting it first against interest due.

What were the facts?

The Revenue appealed against the CIT(A)'s order allowing the assessee's claim for relief under Section 90 and for correct computation of interest under Section 244A. The AO had not allowed the Section 90 relief and had incorrectly calculated the Section 244A interest while giving effect to a previous ITAT order.

What were the issues?

Whether the assessee was eligible for relief under Section 90, and whether interest under Section 244A was correctly computed by the AO.

Which sections of the Income-tax Act were involved?

Section 90,Section 244A,Section 143(3),Section 263

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

Income Tax Appellate Tribunal, ‘A’ BENCH : BANGALORE

Before: SMT. P. MADHAVI DEVI & SHRI ABRAHAM P GEORGE

For Appellant: Shri G.R.Reddy, CIT(DR)
For Respondent: Shri G.Sarangan, Advocate
Hearing: 08/07/2015Pronounced: 24/07/2015

This appeal by the revenue is against the order of the CIT(A), LTU, Bangalore, dated 25/11/2013 for the assessment year 2005-06. The Revenue has raised the following grounds of appeal:

1. The order of Ld.CIT(A) is opposed to law and facts of the case.

2. The Ld CIT(A) erred in allowing the assessee’s claim on the issue of relief u/s 90, even though

M/s. Canara Bank Page 2 of 6 the same was not given to assessee in the assessment order and the assessee’s rectification application on the issue had been rejected for want of evidence. 3. The Ld CIT(A) erred in computing interest u/s 244A payable to the assessee by charging interest on interest, which is not envisaged in the Income-tax Act. 4. For these and such other grounds that may be urged at the time of hearing.

2.

Grounds of appeal No.1 and 4 are general in nature and need no adjudication. As regards the other grounds are concerned, brief facts of the case are that the assessment order passed u/s 143(3) of the Income-tax Act, 1961 [hereinafter referred to as 'the Act' for short] against which an appeal was filed before CIT(A) while the appeal was pending, the assessment order was revised u/s 263 of the Act vide order dt.03/02/2011. On appeal, the ITAT has quashed the order u/s 263 consequent to which the CIT(A),LTU order dated 17/03/2010 got revived. While giving effect to the order of the CIT(A),LTU dated 17/03/2010 the AO did not allow relief u/s 90 for double taxation relief of Rs.4,70,79,728/- u/s 90 of the Act, which was allowed in earlier orders. Further, as regards the calculation of interest u/s 244A also, according to the assessee, AO did not allow interest u/s 244A correctly.

3. Aggrieved, assessee preferred an appeal before the CIT(A) who allowed the same and the revenue is in appeal before us.

M/s. Canara Bank Page 3 of 6 4. As regards ground No.2 relating to the relief u/s 90 of the Act, the learned Departmental Representative submitted that the assessee was not eligible for the said relief and therefore the AO, while giving effect to the order of the CIT(A), has not given such relief and the CIT(A) has erroneously granted relief which has to be aside. The learned counsel for the assessee, on the other hand, submitted that the AO, while giving effect to the CIT(A)’s order dated 31/12/2009 against the assessment order u/s 143(3) dated 24/12/2008, had granted relief of Rs.4,70,79,728/- u/s 90 of the Act and further even while giving effect to the order u/s 263 of the Act, the said relief was and while rectifying the order of giving effect to the order of the CIT(A) dated 15/2/2011 also the relief u/s 90 was given. He submitted that inadvertently, the AO, while giving effect to the order of the CIT(A), LTU, consequent to the quashing of the order u/s 263, has failed to give such relief to the assessee and the CIT(A) after verifying the records has allowed deduction to the assessee holding that the AO has not given any reasons for withholding it while giving effect to the ITAT’s order. Copies of the earlier orders of the AO giving effect to the orders of the CIT(A) and rectification order are filed.

5.

Upon considering the contentions of both the parties, we find that the AO has not disallowed relief u/s 90 of the Act in the assessment order though he had given relief to the assessee while giving effect to the order of the CIT(A), order u/s 263 as well as u/s 154 of the Act. As rightly observed by the CIT(A), the M/s. Canara Bank Page 4 of 6 AO has not given any reasons for not allowing the said relief of double taxation u/s 90 of the Act to the assessee while giving effect to the order of the Tribunal. Therefore, we are satisfied that the CIT(A) has rightly granted relief to the assessee. Therefore, we do not see any reason to interfere with the order of the CIT(A) and ground No.2 of the revenue is rejected.

6.

As regards ground No.3, brief facts are that while giving effect to the order of the Tribunal, the AO has calculated interest u/s 244A at Rs.46,48,72,322/-. Aggrieved, assessee preferred an appeal before the CIT(A) stating that the calculation is incorrect. The CIT(A) recalculated the interest u/s 244A and directed the AO to allow the refund after verifying the correctness of the dates from the record. The CIT(A) also observed that the decision of the Hon’ble Supreme Court in the case of Sandvik Asia Ltd. reported in 280 ITR 643 has been clarified by the Hon’ble Supreme Court in SLP(C) No.11406 of 2008 in the case of CIT vs. Gujarat Fluro Chemicals & others holding that the decision of the Apex Court in the case of Sandvic Asia had been mis-interpreted and only interest provided under the statute u/s 244A has to be allowed on refund and not interest on interest in case of delay.

While the learned Departmental Representative supported the order of the AO giving effect to the order of the Tribunal, the learned counsel for the assessee supported the order of the CIT(A) and also placed reliance upon the decision of the co-

M/s. Canara Bank Page 5 of 6 ordinate bench of the tribunal in the case of Syndicate Bank in to 1704/Bang/2013 dated 30/06/2015. It is submitted that this Tribunal, in the case of Syndicate bank has considered various judicial precedents on the issue to hold that adjustment of the tax refund should be made first to the interest due and thereafter to the tax refund. Copy of the said order is filed before us.

7.

Having regard to the rival contentions and the material on record, we find that the CIT(A) also has taken note of the judgment of the Apex Court in the case of Gujarat Fluro Chemicals & others (cited supra) and computed the interest accordingly and has directed the AO to allow refund after verifying the correctness of the dates. We, therefore, see no reason to interfere with the order of the CIT(A) and direct the AO to allow the refund by first adjusting refund to the interest due and thereafter to the tax refund. Accordingly, ground No.3 is also rejected.

8.

In the result, the revenue’s appeal is dismissed.

More judgments on Section 90

All 1,075 judgments and leading authorities on Section 90 →

Recent GST High Court judgments

Search GST case law →