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Income Tax Appellate Tribunal, AHMEDABAD “A” BENCH
Before: Shri Rajpal Yadav & Shri Amarjit Singh
आदेश/ORDER PER : AMARJIT SINGH, ACCOUNTANT MEMBER:-
This Revenue’s appeal for A.Y. 2010-11, arises from order of the CIT(A)-9, Ahmedabad dated 16-03-2015 , in proceedings under section 250 of the Income Tax Act, 1961; in short “the Act”.
The revenue has raised following ground:-
I.T.A No. 1828/Ahd/2015 A.Y. 2010-11 Page No 2 DCIT vs. Zydus Wellness Ltd.
“1). "Whether the Ld. Commissioner of Income-Tax (A) is right in law and on facts in granting interest u/s.244A of the I.T. Act on excess payment made u/s. 140A of the Act.”
In this case, assessing officer has passed order u/s. 250 of the act on 12-06-2013 and after giving effect to the order of the ld. CIT(A) resulted in refund of Rs. 2,50,69,410/-. The assesseee has filed appeal before the ld. CIT(A) that the assessing officer has not granted interest u/s. 244A as such refund arose out of the adjustment tax paid by the assessee. The ld. CIT(A) has allowed the appeal of the assessee by observing as under:- “2.2 I have carefully considered the submission of the ld. A.R. and the following case laws relied upon by him for granting interest u/.s. 244A of I.T. Act. (i) CIT v/s. Gujarat State Warehousing Corporation (2002) 256 ITR 596 (Guj.) (ii) Cadila Healthcare Ltd. in ITA No. 953/Ahd/2012 dtd. 09-08-2012 (iii) CIT v/s. Sutlej Industries Ltd. 325 ITR 331 (Del) (iv) ACIT v/s. Kerala Transport Co. 42 Taxmann.com 83 (Ker) (v) CIT v/s. Mangalam Arts 37 Taxmann. com 157 (Raj) (vi) CIT v/s. Cholamandalam Inv. & Fin. Co. Ltd. 294 ITR 438 (Mad) The appellant’s grievance is that A.O. has not allowed interest u/s. 244A on the refund determined in the order giving effect to CIT(A) order dtd. 27- 05-2013 for A.Y. 2011 passed on 12/06/2013. The appellant’s A.R. also brought to my notice the order of Hon’ble ITAT, Bench; ‘B’ Ahmedabad in the case of ACIT(OSD) v/s. Cadila Healthcare Ltd. wherein revenue’s appeal was dismissed. The relevant para from the said order of Hon’ble ITAT is reproduced hereunder:- 6. We find that the Ld. CIT (A) has followed the decision of Hon'ble High Court of Karnataka rendered in the case of Commissioner of Income Tax vs. Vijaya Bank (2011) 338 ITR 489 (KAR). The substantial question of law for consideration of Hon'ble High Court of Karnataka in the case of CIT vs Vijaya Bank (supra) was, "When the assessee pays tax subsequent to the Ist day of April of an assessment year but before or along with the date of return, if the tax is assessed to be refunded, what is the date from which interest is payable under section 244A"? The Hon'ble High Court held as under:-
I.T.A No. 1828/Ahd/2015 A.Y. 2010-11 Page No 3 DCIT vs. Zydus Wellness Ltd.
" In the instant case, it is not dispute that the assessee has paid a sum of Rs. 15.5 crore on 29.06.2012, even before the date of filing of the returns. It is that amount which is amended to be refunded as excess payment. Though the occasion to order for refund arose after the assessment order in which the payment of tax was adjusted towards the tax liability, the case does not fall under the clause(a) or the Explanation to clause (b). The said excess payment is to be refunded with interest from the date of payment of such tax, that is from 29.06.2012, till the date of refund. This is precisely what the Appellate Commissioner as well as the Tribunal has said. It is in accordance with law. No illegality nor any case for interference is made out. The substantial question of law is answered in favour of the assessee and against the Revenue." After considering the facts of the case, case laws relied upon by ld. A.R. of the appellant. I am of the opinion that the appellant is entitled for interest u/s. 244A of the I.T. Act against refund determined by the A.O.. The A.O. is requested to allow interest u/s. 244A on such refund as per the provisions of I.T. Act. Accordingly, this ground of appeal raised by the appellant is allowed for statistical purpose.” 4. During the course of appellate proceedings before us, the ld. departmental representative contended that provision of section 244A(aa) was not there in the statute at the time of determination of refund out of any tax paid u/s. 140A of the act in the case of the assessee . Ld. departmental representative has also placed reliance in the case of CIT vs. Gujarat Fluoro Chemicals (2014) taxman.com 1(SC). On the other hand, ld. counsel has placed reliance in the case of M/s. Cadila Healthcare Ltd decided by the Co-ordinate Bench of ITAT(Ahmedabad) in ITA 953/Ahd/2012 dated 09-082012.
We have heard both the sides and perused the material on record. The Ld DR has placed reliance on the decision CIT vs. Gujarat Fluoro Chemicals (2014) taxman.com 1(SC), we observed that facts of this case are distinguishable from the case of the
I.T.A No. 1828/Ahd/2015 A.Y. 2010-11 Page No 4 DCIT vs. Zydus Wellness Ltd.
assessee as in that case the hon’ble apex court has decided the issue of payment of interest on interest. The provisions of section 244A are reproduced as under:- 244A. “1) Where refund of any amount becomes due to the assessee under this Act, he shall, subject to the provisions of this section, be entitled to receive, in addition to the said amount, simple interest thereon calculated in the following manner, namely :— 91[(a) where the refund is out of any tax collected at source under section 206C or paid by way of advance tax or treated as paid under section 199, during the financial year immediately preceding the assessment year, such interest shall be calculated at the rate of one-half per cent for every month or part of a month comprised in the period,— (i) from the 1st day of April of the assessment year to the date on which the refund is granted, if the return of income has been furnished on or before the due date specified under sub-section (1) of section 139; or (ii) from the date of furnishing of return of income to the date on which the refund is granted, in a case not covered under sub-clause (i); (aa) where the refund is out of any tax paid under section 140A, such interest shall be calculated at the rate of one-half per cent for every month or part of a month comprised in the period, from the date of furnishing of return of income or payment of tax, whichever is later, to the date on which the refund is granted: Provided that no interest under clause (a) or clause (aa) shall be payable, if the amount of refund is less than ten per cent of the tax as determined under sub-section (1) of section 143 or on regular assessment;] (b) in any other case, such interest shall be calculated at the rate of one-half per cent for every month or part of a month comprised in the period or periods from the date or, as the case may be, dates of payment of the tax or penalty to the date on which the refund is granted.”
We find that provision of section 244A1(b) for granting of refund in any other case was there in the statute before the incorporation of the specific provision of section 244A1(aa) in the statute for determination of refund out of any tax paid u/s. 140A of the act.
I.T.A No. 1828/Ahd/2015 A.Y. 2010-11 Page No 5 DCIT vs. Zydus Wellness Ltd.
Respectfully following the decision of the coordinate bench of the ITAT in the case of ACIT v M/s Cadila Health Care Ltd. ITA No.953/Ahd/2012 as elaborated in the finding of the Ld. CIT(A) as supra we are of the view that assessee is entitled for interest u/s. 244A of the act, therefore, we do not find any reason to interfere in the finding of the ld. CIT(A).
In the result, the appeal of the revenue is dismissed.
Order pronounced in the open court on 13-09-2017
Sd/- Sd/- (RAJPAL YADAV) (AMARJIT SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad : Dated 13/09/2017 आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, अहमदाबाद