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Income Tax Appellate Tribunal, PUNE „A‟ BENCHES :: PUNE
Before: SHRI PARTHA SARATHI CHAUDHURY & DR. DIPAK P. RIPOTE
(A.Y. 2018-19) Lata Mangeshkar Medical vs DCIT (Exemptions), Foundation, Deenanath Pune. Mangeshkar Hospital, D.No. 8,13, Erandwane, Pune (MH) PAN: AAATL 1944 N Appellant Respondent Assessee by : Shri Nikhil S. Pathak, Adv. Revenue by : Shri Ramnath P. Murkunde,DR Date of hearing : 01/04/2024 Date of pronouncement : 03/04/2024 ORDER
Per PARTHA SARATHI CHAUDHURY, JM:
This appeal preferred by the assessee emanates from the order of National Faceless Appeal Centre [NFAC], Delhi, dated 11.08.2023 for A.Y.2018-19 as per the following grounds of appeal:-
1] The learned CIT(A) erred in rejecting the claim of the assessee for additional interest u/s 244A on the ground that the assessee had failed to prove that TDS was deducted and paid to the Govt. without appreciating that the ld. AO himself had granted interest u/s. 244A for a particular period and hence, the assessee was not required to prove that the TDS was deducted and paid to the Govt. 2] The learned CIT(A) failed to appreciate that the amount of TDS deducted of the assessee trust was accepted by the learned AO while computing the interest u/s 244A and further the total quantum of TDS deducted is available in the order passed by the AO and hence, there was no reason to hold that the assessee had failed to prove the quantum of TDS deducted and accordingly, the order passed by the learned CIT(A) is bad in law. Lata Mangeshkar Medical Foundation 3] The learned CIT(A) erred in not appreciating that the learned AO had granted interest u/s 244A from the date of filing the return i.e. from 05.10.2018 till the date of order passed u/s 143(1) i.e., 16.11.2019 without appreciating that the interest u/s 244A should have been allowed to the assessee trust from the first day of the asst. year and not from the date of the filing of the return. 4] The assessee further submits that the learned CIT(A) erred in not appreciating that the interest u/s 244A was granted till the date Of passing the order u/s 143(1) without appreciating that the interest u/s 244A should have been granted till the date of refund being credited to the account of the assessee. 5] The learned CIT(A) further erred in not deleting the levy of interest u/s 234D since the same was not leviable on the facts of the case. 6] The appellant craves leave to add, alter, amend or delete any of the above grounds of appeal.
The relevant facts are that the assessee is a charitable trust, entitled for exemption u/sec. 11 of the Act. That, for the relevant year assessee had filed the return of income declaring total income at Rs. NIL, after claiming exemption u/sec. 11 of the Act. As per the return of income, the assessee was entitled a refund of Rs. 9,12,87,117/-. An intimation u/sec. 143(1) was passed granting total refund of Rs.9,75,44,844/- including interest u/sec. 244A of Rs. 88,67,710/-. The said order was passed on 16/11/2019. The interest u/sec. 244A, in that intimation u/sec. 143(1), was calculated from 01/04/2018 to 16/11/2019 i.e. the date of passing the intimation u/sec. 143(1). The actual refund was, however, received by the assessee on 10/06/2020. Thereafter, the AO completed the assessment u/sec. 143(3) of the Act. In the said order, the exemption u/sec. 11 was allowed to the trust and the total income has been computed at Rs. NIL. In that Lata Mangeshkar Medical Foundation assessment order u/sec. 143(3), the AO had reworked the interest u/sec. 244A of the Act. He has granted the income from 05/10/2018 i.e. on the date of filing of the return till 16/11/2019 i.e. the date of passing the intimation u/sec. 143(1). Therefore, the interest originally granted in the intimation passed u/sec. 143(1) was reduced. In the assessment order passed u/sec. 143(3), the excess interest granted u/sec. 244A had been calculated at Rs. 26,60,075/- and further interest u/sec. 234D had been levied. Therefore, the assessee had also filed rectification application u/sec. 154 clarifying that the interest computed u/sec. 244A was not correct. The AO passed the order u/sec. 154 rejecting the rectification application filed by the assessee. In that rectification order, the AO has stated that assessee trust had filed return of income on 05/10/2018 i.e. after the due date for filing the return u/sec. 139(1) of the Act. Further, the AO had mentioned that since the assessee had filed the return on 05/10/2018, the interest u/sec. 244A was to be calculated from 05/10/2018 till 16/11/2019 i.e. the date of order passed u/sec. 143(1).
It is the contention of the assessee that the AO was not justified in granting interest from 05/10/2018 as against the claim of the assessee that the same should have been granted from 01/04/2018. It is correct that the assessee had filed return of income on 05/10/2018 and now for the year under consideration, the due date for filing the return of income was 30/09/2018, however, CBDT vide 3 Lata Mangeshkar Medical Foundation order No. F.No.225/358/2018/ITA.II extended the due date for filing the return of income till 15/10/2018. The copy of this relevant CBDT circular had been filed by the assessee before the NFAC. The assessee had filed the return on 05/10/2018 which was within the extended due date as per the CBDT‟s order. The assessee further contends that as per section 244A, if the assessee has furnished the return of income within the due date prescribed u/sec. 139(1), in that event, the interest on the refund due, it should be calculated from 1st April of the relevant assessment year till the date on which refund is granted. According to the assessee, since the return was filed within the due date prescribed u/sec. 139(1), the assessee trust would be eligible for interest u/sec. 244A from 01/04/2018 and not from 05/10/2018.
At the time of hearing, ld. counsel for the assessee demonstrated by filing the copy of intimation u/sec. 143(1) of the Act dated 16/11/2019 wherein at column No.49 „TDS‟ it is mentioned “as provided by taxpayer in return of income Rs. 9,12,87,117/-” and “as computed u/sec. 143(1) Rs. 8,86,77,134/-”. Further, in column No.55, there is interest u/sec. 244A on refund given at Rs.88,67,710/- in the said intimation and similarly in the assessment order u/sec. 143(3) dated 28/01/2021 there is TDS amount of Rs.8,86,78,873/- and the interest u/sec. 244A on the current amount given has been mentioned at 62,07,635/- at column 61 of the assessment order. Lata Mangeshkar Medical Foundation 5. In this factual scenario, the NFAC in its order at para 5.7 had observed that the assessee without proving that the TDS deducted even remitted to the credit of the central Govt. seeks interest u/sec. 244A of the Act. We are of the considered view that the NFAC had passed this order and observation in a very general and cryptic manner without even appreciating the documents on record namely the intimation u/sec. 143(1) and the assessment order u/sec. 143(3) of the Act. That, it is clearly evident that the Department itself has given effect to the TDS and even also calculated the interest payable to the assessee u/sec. 244A of the Act. The grievance was only with respect to the quantification of the interest which should have been received by the assessee in this case. The NFAC without adjudication on this issue and overlooking all these documents have recorded an erroneous finding that the assessee has not proved TDS deducted and remitted to the credit of the central Govt. and is seeking interest u/sec. 244A of the Act which is not at all the case emanating either from the assessment order or further intimation u/sec. 143(1) of the Act. Ld counsel for the assessee had also placed reliance on the decision of the Hon'ble Bombay High Court in the case of Group M Media India (P) Ltd. v. DCIT (International Tax) [2023] 157 taxmann.com 487 (Bombay) where the Hon'ble Court has held as under:-
18. In the present case, it is not in doubt that petitioner was entitled to refund of Rs.4,23,60,940/- because the amount has been paid after the petition was filed. Since the excess amount has been paid over by 5 Lata Mangeshkar Medical Foundation petitioner on various dates during Financial Year 2017-2018, in our view, the refund ought to have been processed and paid latest by 31st July 2018. The interest, therefore, of course, will become payable from 1st April 2018 if we apply the principles prescribed in section 244A of the Act. The amount, as noted earlier, has been paid only on 21st August 2023. Consequently, we are of the view that petitioner is entitled to interest on this amount of Rs.4,23,60,940/- from 1st April 2018 upto 21st August 2023 at the rate of 6% p.a. which is the rate prescribed under section 244A of the Act.
Therefore, it is sacrosanct and clear that as per the provision, the interest u/sec. 244A has to be calculated from 1st April at the rate of 6% p.a. which is the rate prescribed u/sec. 244A of the Act. We are, therefore, of the considered view considering these facts and circumstances that the matter should be remitted to the file of the NFAC for de novo adjudication considering the documents on record and the judgment of the Hon'ble jurisdictional High Court placed on record and come out with a speaking order as per law complying with the principles of natural justice. The ld. counsel for the assessee also relied on the decision of the coordinate bench, Kolkata in the case of Koninklijke Philips N.V. v. DCIT (IT) [2023] 146 taxmann.com 213 (Kolkata – Trib.) wherein it was held that interest u/sec. 244A has to be granted upto the date when the actual refund was received. The NFAC shall take cognizance of this proposition while deciding the matter. In view thereof, we set aside the order of NFAC and remand the matter back to its file as per our aforestated directions. The grounds of appeal stands allowed for statistical purposes. Lata Mangeshkar Medical Foundation
6. In the result, appeal of the assessee is allowed for statistical purposes.
Order pronounced in open Court on 03rd April, 2024.