Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, BENCH ‘A’ KOLKATA
Before: Hon’ble Shri N.V.Vasudevan, JM & Shri Waseem Ahmed, AM ]
IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH ‘A’ KOLKATA [Before Hon’ble Shri N.V.Vasudevan, JM & Shri Waseem Ahmed, AM ] ITA Nos.479&480/Kol/2013 Assessment Years : 1993-94 & 1994-95
D.C.I.T., Cir-3, , -versus- M/s. The Peerless General Finance Kolkata & Investment Co.Ltd.Kolkata (PAN:AABCT3043L) (Appellant) (Respondent)
For the Appellant: Shri Sanjit Das, JCIT, Sr.DR For the Respondent: Shri S.K.Tulsiyan, Advocate
Date of Hearing : 02.02.2016. Date of Pronouncement : 02.03.2016.
ORDER PER N.V.VASUDEVAN, JM:
These are appeals by the Revenue against two orders both dated 13.12.2012 of CIT(A)-I Kolkata relating to A.Y.1993-94 & 1994-95. The common ground raised by the revenue in these appeals read as follows :-
ITA No.479/Kol/2013 (A.Y.1993-94) “ I. Whether Ld. CIT(A) is correct in directing the AO to allow interest u/s 244A of the I.T.Act, 1961 on Rs.63,20,445/- which is itself interest on interest for the A.Y. 1995-96. II. The Department craves leave to add, alter or modify any ground of appeal during the hearing.”
ITA No.480/Kol/2013 (A.Y.1994-95) “ I. Whether Ld. CIT(A) is correct in directing the AO to allow interest u/s 244A of the I.T.Act, 1961 on Rs.1,73,01,141/- which is itself interest on interest for the A.Y. 1995-96. II. The Department craves leave to add, alter or modify any ground of appeal during the hearing.”
In both the assessment years 1993-94 and 1994-9, in the course of assessment proceedings, penalty proceedings were initiated u/s 271(1)(c) of the Income Tax Act, ITA Nos.479&480/Kol/2013- M/s. The Peerless General Finance & Investment Co.Ltd.A.Y.1993-94 & 1994-95
1961 (Act), in respect of the additions made to the total income of the Assessee. The AO also by an order u/s.271(1)( c) of the Act imposed penalty on the Assessee. On appeal by the Assessee, the CIT(A) by orders dated 02.09.2010 cancelled the order of the AO imposing penalty on the Assessee u/s.271(1)( c) of the Act. Consequent order of the CIT(A) cancelling the order imposing penalty u/s 271(1)(c) of the Act, the AO passed order giving effect to the order of CIT(A) dated 02.09.2010. In the said orders penalty of Rs.63,20,445/- and Rs.1,73,01,141/- imposed for A.Y.1993-94 and 1994-95 was refunded to the assessee.
The assessee was aggrieved by the aforesaid order in as much as the AO had not granted interest u/s 244A of the Act for the period from 30.04.2010 to 23.11.2010 on the sum of Rs.63,20,445/- and Rs.1,73,01,141/- for A.Y.1993-94 & 1994-95 respectively. According to the assessee the assessee was entitled to interest u/s 244A of the Act from the date of which the assessee paid the penalty till the date of which the same was refunded to the assessee.
The CIT(A) agreed to the submissions made on behalf of the assessee and he directed the AO to allow interest u/s 244A of the Act for the period claimed by the assessee.
Aggrieved by the order of CIT(A) the revenue has preferred the present appeals before the Tribunal. It can be seen from the grounds of appeal raised by the revenue the revenue has raised the ground as if interest u/s 244A has been allowed on interest. This is factually incorrect. The interest was allowed on the penalty which was paid by the assessee and which was subsequently refunded to the assessee, pursuant to the order of CIT(A) cancelling the order of AO imposing penalty on the assessee. Even otherwise, we are of the view that there is no merit in the claim of the revenue in this appeal. In this regard the learned counsel for the assessee has drawn our attention to the decision of the Hon’ble Supreme Court in the case of CIT vs H.E.G.Ltd 324 ITR 331 (SC) wherein the Hon’ble Supreme Court held as follows :-
ITA Nos.479&480/Kol/2013- M/s. The Peerless General Finance & Investment Co.Ltd.A.Y.1993-94 & 1994-95
“ The next question which we are required to answer is-what is the meaning of the words "refund of any amount becomes due to the assessee" in section 244A ? In the present case, as stated above, there are two components of the tax paid by the assessee for which the assessee was granted refund, namely TDS of Rs. 45,73,528 and tax paid after original assessment of Rs.1,71,00,320. The Department contends that the words "any amount" will not include the interest which accrued to the respondent for not refunding Rs. 45,73,528 for 57 months. We see no merit in this argument. The interest component will partake of the character of the "amount due" under section 244A It becomes an integral part of Rs. 45,73,528 which is not paid for 57 months after the said amount became due and payable. As can be seen from the facts narrated above, this is the case of short payment by the Department and it is in this way that the assessee claims interest under section 244A of the Income-tax Act Therefore, on both the afore stated grounds, we are of the view that the assessee was entitled to interest for 57 months on Rs. 45,73,528. The principal amount of Rs. 45,73,528 has been paid on December 3t 1997 but net of interest which, as stated above, partook of the character of "amount due" under section 244A.”
As we have already observed in the present case what has been allowed to the assessee is not interest on interest. Nevertheless the aforesaid decision of the Hon’ble Supreme Court is a complete answer to the grievance projected by the revenue in these appeals. Interest is to be allowed to an Assessee “on any amount” refunded. We therefore do not find any merits in these appeals by the revenue. Accordingly the same are dismissed.
In the result, the appeals by the Revenue are dismissed.
Order pronounced in the Court on 02.03.2016. Sd/- Sd/-
[Waseem Ahmed ] [ N.V.Vasudevan ] Accountant Member Judicial Member Dated : 02.03.2016. [RG PS]
ITA Nos.479&480/Kol/2013- M/s. The Peerless General Finance & Investment Co.Ltd.A.Y.1993-94 & 1994-95
Copy of the order forwarded to: 1.M/s. The Peerless General Finance & Investment Co.Ltd., 03, Esplanade east, Kolkata-700069. 2.D.C.I.T., Circle-3, Kolkata 3. CIT(A)-I, Kolkata 4. CIT-I, Kolkata. 5. CIT(DR), Kolkata Benches, Kolkata. True Copy By order,
Asst. Registrar, ITAT, Kolkata Benches
ITA Nos.479&480/Kol/2013- M/s. The Peerless General Finance & Investment Co.Ltd.A.Y.1993-94 & 1994-95