Income Tax Appellate Tribunal - Jodhpur
Miraj Developers Limited, Rajsamand vs Cit(A),Udaipur-2, Udaipur on 15 March, 2024
IN THE INCOME TAX APPELLATE TRIBUNAL
JODHPUR BENCH, JODHPUR
BEFORE: DR. S. SEETHALAKSHMI, JJUDICIAL MEMBER &
SHRI RATHOD KAMLESH JAYANTBHAI, ACCOUNTANT MEMBER
I.T.A. No. 367/Jodh/2023
Assessment Year: 2013-14
Miraj Developers Limited Vs. CIT(A).
1st Floor Miraj Campus Uper Udaipur(2).
Kio den Nathdwara, Rajsamand.
[PAN: AAACU 9093J] (Respondent)
(Appellant)
Appellant by Sh. M.S. Jhanwar, C.A. &
Sh. Kamlesh Moondra, C.A.
Respondent by Smt. Alka Gautam, CIT-DR
Date of Hearing 14.03.2024
Date of Pronouncement 15.03.2024
ORDER
PER: RATHOD KAMLESH JAYANTBHAI, AM This appeal filed by assessee is arising out of the order of the Learned Commissioner of Income Tax (Appeals)-2, Uaipurdated 11.08.2023 [here in after "ld.CIT(A)"] for assessment year 2013-14, which in turn arise from the order dated 02.03.2016 passed under section 143(3) r.w.s. 153A of the Income Tax Act,1961 (here in after "Act") by the ACIT, Central Circle-1, Udaipur.
I.T.A. No.367/Jodh/2023
Miraj Developers Ltd. 2
2. In this appeal, the assessee has raised following grounds: -
" 1. Under the facts and circumstances of the case, the order passed by the Ld. CIT(A)-2 on 11/08/2023 U/s.250 of the Act, confirming the order giving appeal effect passed by the Ld. AO on 25/04/2018, is perverse, bad-in-law and is passed in ignorance of the powers and obligations entrusted upon the appellate authority, and therefore, it deserves to be quashed
2. Under the facts and circumstances of the case, the Ld.CIT(A)-2 has grossly erred in law by condoning the actions of the AO who, while computing the interest due u/S.234B, has not considered interest on Rs.10.80 Crore from date of deposit till the date of assessment during the passing of appeal effect order dated 25.04.2018. The Ld. CIT(A) has grossly erred in confirming the aforementioned actions of the Ld. AO and therefore this impugned appellate order deserves to be quashed, and the interest due to the appellant be recalculated and duly disbursed.
3. Under the facts and circumstances of the case, the Ld. CIT(A)-2 has grossly erred in law by not giving interest due u/S.244A on refund amount, as the same was not only miscalculated by the Ld. AO but the erroneous calculations were not shared by him, as well. Therefore, the Appellant humbly requests your good self to kindly allow the said interest u/s 244A of the Act to the Appellant till date of refund and the AO is to be further directed to increase the refund till the date of actual grant of refund.
4. Under the facts and circumstances of the case, the Ld.CIT(A)-2 has grossly erred by failing todischarge the legal burden that is incumbent upon his office by disregarding the rejoinder submission of the appellant on remand report of the AO, by simply stating that the matter cannot be adjudicated upon by him because the claim of the appellant pertinent to the interest on the interest due on seized cash u/S.244A was not emanating from the original order of the AO against which the appeal was filed before him. Therefore, in keeping with the failure on the part of the Ld. CIT(A) to discharge his duties, the impugned appellate order passed by him deserves to be quashed.
5 The appellant craves leave to add, amend, alter or modify any or all grounds of appeal, on or before the date of hearing."
3. Brief fact of the case related to the present dispute is that the calculation of the interest payable by the assessee within the provision of section 234B of the Act has not been charged / computed correctly by the ld. AO and the notice of demand issued dated 10.05.2018 is found to I.T.A. No.367/Jodh/2023 Miraj Developers Ltd. 3 be erroneous so far as to the charge of interest u/s. 234B of the Act.Therefore, the present appeal is filed by the assessee challenging the computation of tax payable by the assessee in the notice of demand issued to the assessee dated 10.05.2018 which is in pursuant to the order passed giving effect to the order of the ITAT in ITA No. 535/Jodh/2017 dated 08.02.2018. The assessee submitted that while calculating the interest u/s. 234B of the Act the appropriate credit of taxes has not been considered while computing the interest u/s. 234B of the Act. The details of the payment not considered are as under :
Date Amount
28.04.2014 59,70,290
March, 2015 10,80,00,000
Above taxes so paid has not been considered from the date of payment to the order of the assessment and therefore, the ld. AR of the assessee submitted that the interest of Rs. 2,17,15,825/- ( see computation sheet scanned here in below ) charged by the ld. AO is required to be reduced by an amount of Rs. 1,43,33,259/- is computed herein below :-
Date Amount No. of months Rate(%) Interest
28.04.2014 59,70,290 23 12 13,73,259
16.03.2015 50,00,000
21.03.2015 1,00,00,000
I.T.A. No.367/Jodh/2023
Miraj Developers Ltd. 4
24.03.2015 2,50,00,000
25.03.2015 5,60,00,000
31.03.2015 1,20,00,000
March, 10,80,00,000 12 12 1,29,60,000
2015
Total 1,43,33,259
INCOME TAX COMPUTATION FORM
TAX CALCULATION
1.Gross Tax 17,29,34,475
2.Rebate
3.Surcharge 86,46,724
4.Education Cess 54,47,436
5.Tax credit u/s 115JAA/ 15JD
6.Relief u/s 89(1) 90 / u/s 91
7.Net Tax 18,70,28,635
8.Interest u/s 234A
8a.Delay Period
9.Interest u/s 234B 2,17,15,825
10.Interest u/s 234C 88,69,100
11.Gross Demand 21,76,13,560
TAXES PAYMENT DETAILS
1.TDS/TCS 63,424
2.Advance Tax 60,00,000
3.Self Assessment Tax 20,31,62,001
4.Regular Assessment 22,70,48,201
Tax
5.Amount already 0
refunded
6.Total Tax paid 22,71,11,625
DIVIDEND DISTRIBUTION TAX DETAILS
1.Additional Income Tax And Interest Payable on Distributed Profits 0
2,Additional Income Tax And Interest Paid 0
FINAL DETAILS
1.Total tax and Interest Payable -9498065
2.Interest u/s 244A 0
3.Interest made u/s 244A recovered
4.Delay period attributable to Assessee
5.Interest u/s 234D
6.Interest u/s 220
DEMAND/RE
1. Net amount refundable (- )94,98,070/-
In Words Rupees:
Ninety four lakh ninety eight thousand seventy only Signature of the UDC/TA Name of the UDC/TA Signature of the Officer AO code DLCCC06602 Central Circle-1, Udaipur I.T.A. No.367/Jodh/2023 Miraj Developers Ltd. 5
4. Feeling dissatisfied the assessee preferred an appeal before the ld. CIT(A) for charge of interest incorrectly u/s 234B of the Act in an order passed u/s 254 r.w.s. 143(3) r.w.s. 153A of the Act. Apropos to the grounds so raised the relevant findings of the ld. CIT(A) is as under:-
Finding of ld. CIT(A) for interest u/s. 234B of the Act "7.6. I have considered the facts of the case and written submissions of the appellant as against the observations/findings of the AO in the appeal effect order for the year under consideration. The contentions/submissions of the appellant are being discussed and decided as under:-
On perusal of facts of the case, it is seen that the AO has already granted interest on cash seized lying with the department from the date of first letter as per decision of the Hon'ble ITAT in order dated 08-12-2017 in ITA No. 436/Jodh/2017 and 08-02-2018 in ITA No. 535/Jodh/2017. The appellant filed application to the AO on 15-02-2018 with a request for giving appeal effect and issue of refund order in terms of order dated 08.02.2018 issued by Hon'ble ITAT, Jodhpur. In this application the appellant also requested to give interest on seized cash as per directions of Hon'ble ITAT. The AO passed order giving effect to the order of the ITAT on 25.04.2018. In this order the AO has granted interest on seized cash from the date of first letter of the appellant. Therefore, the order passed by the AO was as per the directions of the ITAT. The appellant has also not pointed out any mistake in calculation made by the AO with regard to interest on seized cash. Therefore, there is no merit in the issue raised again by the appellant in this ground of appeal.
The appellant has raised a new issue of not giving interest on amount deposited by the appellant before passing of order u/s 143(3) of the Act and some collections made by way of adjustment of amount lying in PD Account and adjustment of refund. The appellant claimed that while computing interest following amount was not considered by the AO.
Date Amount Nature of Payment
28.04.2014 59,70,290 Self-assessment Tax
16.03.2015 50,00,000 Self-Assessment tax
21.03.2015 1,00,00,000 Self-Assessment tax
24.03.2015 2,50,00,000 Self-Assessment tax
25.03.2015 5,60,00000 Self-Assessment tax
31.03.2015 1,20,00000 Self-Assessment tax
15.03.2016 1,11,56,690/- Demand Adjusted by PD account on
15.03.2016
31.01.2017 67,29,510/- Demand Adjusted out of refund
proceed
for AY 2012 - 2013 vide order
31.01.2017
I.T.A. No.367/Jodh/2023
Miraj Developers Ltd. 6
This issue was not before the Hon'ble ITAT while passing order dated 08-12-2017 in ITA No. 436/Jodh/2017 and 08-02-2018 in ITA No. 535/Jodh/2017. In fact in first round of appeal this issue was not raised by the appellant at any stage. Therefore, the order of the AO is found to be in accordance with directions of the ITAT. The new issue of not allowing interest on self assessment tax deposited before passing of the assessment order raised by the appellant is raised for the first time in the appellate proceedings and the issue is not emanating from the order passed by the AO while giving effect to the order of the Hon'ble ITAT. While passing appeal effect order the AO was justified in following the order of the ITAT and the appellant has not pointed out any mistake in this regard. The appellant has raised this issue for the first time in the modified ground of appeal based on remand report received from the AO. The appellant claimed that calculation of interest came to the knowledge of the appellant for the first time after receipt of remand report. This issue was neither raised before AO nor during first round of appellate proceedings. This appeal is against the order of the AO passed for giving effect to the order of the ITAT. The order passed by the AO is found to be correct as the AO has followed the directions of the ITAT. The new issue raised by the appellant about not allowing interest on Self Assessment Tax deposited before passing of assessment order was not decided by the Hon'ble ITAT. Therefore, while passing of order giving effect to the order of the ITAT, deciding new issue which was not decided by the Hon'ble ITAT was beyond the scope of the jurisdiction of the AO. Therefore, no interference is required in the order of the AO against which the appeal is filed. The order passed by the AO is accordingly upheld.
This ground of appeal is therefore found to be not acceptable and rejected. This ground raised by the appellant is accordingly treated as dismissed."
Finding of ld. CIT(A) for interest payable u/s. 244A of the Act "8.4 I have considered the facts of the case and written submissions of the appellant as against the observations/findings of the AO in the penalty order for the year under consideration.
As per remand report of the AO, the AO granted refund to the appellant of Rs. 94,98,065/-on account of excess interest charged u/s 234B and no interest u/s 244A was granted. The AO stated that though Section 244A provides for payment of interest on the amount of tax paid in excess of the amount of assessed tax but, it clearly provides that no interest shall be payable if the amount of refund is less than ten per cent of the tax. In the case of the appellant, the net tax was calculated as Rs. 18,70,28,635/- and the refund issued was Rs. 94,98,065/-.
In view of the above fact, it is found that the assessing officer has correctly denied interest to the assessee u/s 244A.
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Miraj Developers Ltd. 7
The appellant has stated that in the case of appellant, the amount of refund is more than 10% of Tax Payment. This contention of the appellant is based on the new issue raised by the appellant for the first time. The issue raised by the appellant is not found to be acceptable as it was not emanating from the order of the AO against which this appeal is filed. Therefore, as discussed in ground no. 2, this ground is also found to be unacceptable and rejected. This ground of appeal is treated as dismissed."
5. As both the grounds of the assessee was dismissed feeling dissatisfied from the order of the ld. CIT(A) the assessee has preferred the present appeal on the grounds as stated herein above in para 2 challenging the finding of the ld. CIT(A). In support of the grounds raised for interest computed u/s. 234 B and interest receivable u/s. 244A of the Act the ld. AR of the assessee has filed a detailed computation sheet herein below:-
S. No. Computation of Total Income Income as per Revised appeal effect calculation order dated Rs.
25.04.2018 1 Total Income (as per appeal effect order dated 25.04.2018 ) 57,64,48,250 57,64,48,250 2 Tax @ 30% 17,29,34,475 17,29,34,475 3 Surcharge @ 5% 86,46,724 86,46,724 4 Total Amount for Educational cess 18,15,81,199 18,15,81,199 5 Educational Cess @ 3% 54,47,435 54,47,435 6 Total Tax Due 18,70,28,635 18,70,28,635 7 Interest U/s 234B 2,17,15,825 2,17,15,825 *(18,70,28,635-TDS 63,424-Advance Tax 60,00,000)* 12% 8 Excess Interest charged u/s 234B (143,33,259) (Table A) 9 Interest u/s 234C 88,69,101 88,69,101 I.T.A. No.367/Jodh/2023 Miraj Developers Ltd. 8
10. Total Interest (8+9) 3,05,84,926 1,62,51,667
11. Total demand 21,76,13,561 20,32,80,302
12. T.D.S. 63,424 63,424
13. Advance tax paid ( 15.12.2012) 6,000,000 6,000,000
14. Self -Assessment Tax paid (Table B) 22,10,48,200 22,10,48,200
15. Total Amount deposited 22,71,11,624 22,71,11,624
16. Tax payable (Refundable) received by the appeal 94,98,063 2,38,31,322 effect order 25.04.2018
17. Refund received vide appeal effect order dated 94,98,063 25.04.2018
18. Balance amount towards reduction of interest us/ 1,43,33,359 234B to be received
19. Interest u/s 244A @ 6%(Table C) 88,90,963 20 Total interest to be received 2,32,24,222 5.1 To support the two issue raised by the ld. AR of the assessee he has relied upon the following evidences in support of the contentions so raised:-
I.T.A. No.367/Jodh/2023 Miraj Developers Ltd. 9 5.2 The ld. AR of the assessee in addition to the above submissions and chart so produced vehemently argued that the ld. CIT(A) has not considered the remand report of the ld. Assessing Officer which was called for from the ld. Assessing Officer during the pendency of the appeal before the ld. CIT(A). In the remand report the ld. AO categorically confirmed that "no interest has been provided to the assessee on the above deposited amount till the date of assessment.
Thus, when the matter was clear and confirmed by the ld. AO in the I.T.A. No.367/Jodh/2023 Miraj Developers Ltd. 10 remand proceeding not considering that fact is bad in law as well as on facts and therefore, the assessee is eligible to get the relief of interest on the above amount of Rs. 10,80,00,000 paid in March 2015 and Rs. 59,70,290/- paid on 28.04.2014 which has not been considered while charging interest u/s. 234B of the Act. The relevant part of the remand report hereinbelow:-
A. Ground No. 1- The Ld. AO has erred in re-computing the interest charged after giviny credit of seized cash from 1" request letter dated 19 March 2014 to till the dated of the assessment order on 02 March 2016 as per direction of Hon'ble ITAT vide order dated 08 February 2018. Observations:
The submission of the assessee has been considered. In the case of the assessee, the Hon'ble ITAT vide order no. 535/Jodh/2017 dated 08.02.2018 allowed the interest on cash seized lying with the department from the date of first letter of authorization i.e. 19.03.2014 and directed the A.O. to recompute the interest charged after giving credit of seized cash till the date of assessment. Thereafter, in consonance with the above order of the ITAT, the A.O. allowed the interest u/s 234B on the cash seized lying with the department from the date of first letter of authorization vide Order giving Appeal Effect dated 25.04.2018.
Calculation of interest charged u/s 234B(3):-
Interest charged u/s 234B in 143(3) r.w.s 153A :- Rs. 3,05,98,965/- vide order passed on 02.03.2016 Re-computed interest u/s 234B after giving :- Rs. 2,17,15,825 appeal effect of the above order of the ITAT Thereafter, a refund of 94,98,065/- was granted to the assessee. However, the assessee has now submitted that the A.O. has erred in re- computing the interest charged after giving credit of seized cash from first request letter dated 19.03.2014. According to the submissions made by the assessee, the A.O. has given effect and granted refund of only Rs. 94,98,065/- instead of Rs. 2,66,40,000/-.
Therefore, the calculation of interest to be charged u/s 234B is done below: Short Tax paid: 18,70,28,635(Net Tax) - 63,424(TDS) - 60,00,000(Advance Tax) : Rs. 18,09,65,211/-
Interest on Rs. 18,09,65,211/-: Interest from 01.04.2013 to 31.03.2014 for 12 months : 18,09,65,211 12% : Rs. 2,17,15,825/-
I.T.A. No.367/Jodh/2023
Miraj Developers Ltd. 11
Therefore, total interest u/s 234B comes out to Rs. 2,17,15,825/- after giving credit of seized cashlying with the department from the first letter of authorization. In accordance with the calculations of interest done above, the A.O. too in the Order giving Appeal Effect passed on 25.04.2018 re- computed the interest u/s 234B at Rs. 2,17,15,825/- only and granted a refund of Rs. 94,98,065/-.
Thus, there is no error in the re-computation of the interest charged done by the A.O. u/s 234B.
However, prior to the assessment order passed u/s 143(3) r.w.s 153A on 02.03.2016, the assessee further deposited Rs. 10,80,00,000/- by way of challans in March, 2015 on the following occasions:
16.03.2015- Rs. 50,00,000/-
21.03.2015 -Rs. 1,00,00,000/-
24.03.2015-Rs. 2,5000,000/-
25.03.2015 -Rs. 5,60,00,000/-
31.03.2015 -Rs. 1,20,00,000/-
Further, it is submitted that no interest has been provided to the assessee on the above deposited amount till the date of assessment. B. Ground No. 02- The Ld. AO has also erred in rejecting the application of appellant in relation to grant of interest on interest for delaved period considering facts, circumstances and settled legal position on placed on record.
Observations:
The above ground of appeal of the assessee relates to the grant of interest available u/s 244A w.r.t. the refund of excess interest u/s 234B. The assessee has submitted that though the assessee is eligible for interest u/s 244A, the AO has only granted refund of interest u/s 234B without granting interest u/s 244A on such refund.
With respect to the above submission of the assessee, it is submitted that in the case of the assessee, the AO passed Order giving Appeal Effect dated 25.04.2018 pursuant to the order of the Hon'ble ITAT vide order no.
535/Jodh/2017 dated 08.02.2018. In the above order, AO granted refund to the assessee of Rs. 94,98,065/- on account of excess interest charged u/s 234B and no interest u/s 244A was granted to the assessee. Further, it is submitted that though Section 244A provides for payment of interest on the amount of tax paid in excess of the amount of assessed tax but, it clearly provides that no interest shall be payable if the amount of refund is less than ten per cent of the tax. In the case of the assessee, the net tax was calculated as Rs. 18,70,28,635/- and the refund issued was Rs.94,98,065/-. In view of the above fact, it is submitted that the assessing officer has correctly denied interest tothe assessee u/s 244A. Submitted for kind perusal and necessary action.
5.3 Based on this submissions, the ld. AR of the assessee submitted that the assessee is high (Tax payer) and therefore, u/s 234B of the Act I.T.A. No.367/Jodh/2023 Miraj Developers Ltd. 12 the interest incorrectly chart is required to be corrected and consequential refund arising of correct of this error being more then 10 % of the assessed tax the assessee is also eligible to receive the interest payable to the assessee u/s 244A which is being consequential in nature be directed to be granted to the assessee till the date of granting of refund by the ld. AO.
6. The ld. DR is heard who has relied upon the factual aspect of the matter decided by the ld. CIT(A) and supported the order of the ld. CIT(A) but when the question raised by the bench the ld. DR did not object to the contention raised by the ld. AO in the remand report and prayed that the matter be decided considering the remand report of the ld. AO and the provision of section 234B of the Act.
7. We have heard the rival contentions, perused the material placed on record. The apple of discord in the present appeal is that whether the assessee is eligible to receive the credit of the amount of taxes paid after the end of the assessment year and before the completion of the final determination of the demand by the ld. AOwhile computing the interest payable by the assessee as per provision of section 234B of the I.T.A. No.367/Jodh/2023 Miraj Developers Ltd. 13 Act or not. To have the better understanding of the issue it is imperative to consider the provisions of section 234B of the Act. Interest for defaults in payment of advance tax.
234B. (1) Subject to the other provisions of this section, where, in any financial year, an assessee who is liable to pay advance tax under section 208 has failed to pay such tax or, where the advance tax paid by such assessee under the provisions of section 210 is less than ninety per cent of the assessed tax, the assessee shall be liable to pay simple interest at the rate of one per cent for every month or part of a month comprised in the period from the 1st day of April next following such financial year to the date of determination of total income under sub-section (1) of section 143 and where a regular assessment is made, to the date of such regular assessment, on an amount equal to the assessed tax or, as the case may be, on the amount by which the advance tax paid as aforesaid falls short of the assessed tax.
Explanation 1.--In this section, "assessed tax" means the tax on the total income determined under sub-section (1) of section 143 and where a regular assessment is made, the tax on the total income determined under such regular assessment as reduced by the amount of,--
(i) any tax deducted or collected at source in accordance with the provisions of Chapter XVII on any income which is subject to such deduction or collection and which is taken into account in computing such total income; (ia) any relief of tax allowed under section 89;
(ii) any relief of tax allowed under section 90 on account of tax paid in a country outside India;
(iii) any relief of tax allowed under section 90A on account of tax paid in a specified territory outside India referred to in that section;
(iv) any deduction, from the Indian income-tax payable, allowed under section 91, on account of tax paid in a country outside India; and
(v) any tax credit allowed to be set off in accordance with the provisions of section 115JAA or section 115JD.
Explanation 2.--Where, in relation to an assessment year, an assessment is made for the first time under section 147 or section 153A, the assessment so made shall be regarded as a regular assessment for the purposes of this section. 16 [Explanation 3.--In Explanation 1 and in sub-section (3),--
(i) "tax on total income as determined under sub-section (1) of section 143"
shall not include the additional income-tax, if any, payable under section 140B or section 143; and
(ii) tax on the total income determined under such regular assessment shall not include the additional income-tax payable under section 140B.] I.T.A. No.367/Jodh/2023 Miraj Developers Ltd. 14 (2) Where, before the date of determination of total income under sub-section (1) of section 143 or completion of a regular assessment, tax is paid by the assessee under section 140A or otherwise,--
(i) interest shall be calculated in accordance with the foregoing provisions of this section up to the date on which the tax is so paid, and reduced by the interest, if any, paid under section 140A towards the interest chargeable under this section;
(ii) thereafter, interest shall be calculated at the rate aforesaid on the amount by which the tax so paid together with the advance tax paid falls short of the assessed tax.
(2A) (a) Where an application under sub-section (1) of section 245C for any assessment year has been made, the assessee shall be liable to pay simple interest at the rate of one per cent for every month or part of a month comprised in the period commencing on the 1st day of April of such assessment year and ending on the date of making such application, on the additional amount of income-tax referred to in that sub-section;
(b) where as a result of an order of the Settlement Commission under sub-section (4) of section 245D for any assessment year, the amount of total income disclosed in the application under sub-section (1) of section 245C is increased, the assessee shall be liable to pay simple interest at the rate of one per cent for every month or part of a month comprised in the period commencing on the 1st day of April of such assessment year and ending on the date of such order, on the amount by which the tax on the total income determined on the basis of such order exceeds the tax on the total income disclosed in the application filed under sub-section (1) of section 245C;
(c) where, as a result of an order under sub-section (6B) of section 245D, the amount on which interest was payable under clause (b)has been increased or reduced, as the case may be, the interest shall be increased or reduced accordingly.
(3) Where, as a result of an order of reassessment or recomputation under section 147 or section 153A, the amount on which interest was payable in respect of shortfall in payment of advance tax for any financial year under sub-
section (1) is increased, the assessee shall be liable to pay simple interest at the rate of one per cent for every month or part of a month comprised in the period commencing on the 1st day of April next following such financial year and ending on the date of the reassessment or recomputation under section 147 or section 153A, on the amount by which the tax on the total income determined on the basis of the reassessment or recomputation exceeds the tax on the total income determined under sub-section (1) of section 143 or on the basis of the regular assessment as referred to in sub-section (1), as the case may be. (4) Where, as a result of an order under section 154 or section 155 or section 250 or section 254 or section 260 or section 262 or section 263 or section 264, the amount on which interest was payable under sub-section (1) or sub-section (3) has been increased or reduced, as the case may be, the interest shall be increased or reduced accordingly, and--
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(i) in a case where the interest is increased, the Assessing Officer shall serve on the assessee a notice of demand in the prescribed form specifying the sum payable and such notice of demand shall be deemed to be a notice under section 156 and the provisions of this Act shall apply accordingly;
(ii) in a case where the interest is reduced, the excess interest paid, if any, shall be refunded.
(5) The provisions of this section shall apply in respect of assessments for the assessment year commencing on the 1st day of April, 1989 and subsequent assessment years.
Thus, on careful perusal of the provision of section 234B of the Act bench observed that the assessee shall be eligible to receive the relief of interest before the date of determination of total income under sub- section (1) of section 143 or completion of a regular assessment, tax is paid by the assessee under section 140A or otherwise and interest shall be calculated in accordance with the provisions of section 234B up to the date on which the tax is so paid, and reduced by the interest, if any, paid under section 140A towards the interest chargeable under this section and thereafter, interest shall be calculated at the rate aforesaid on the amount by which the tax so paid together with the advance tax paid falls short of the assessed tax. Thus, considering that specific provision of the Act and the specific acceptance of the fact by the ld. AO in the remand report that the assessee was not granted the credit of taxes while calculating the interest u/s. 234B of the Act and that too without referring to any adverse comment in the remand report. Therefore, considering the specific provision in law and acceptance I.T.A. No.367/Jodh/2023 Miraj Developers Ltd. 16 ofthe error in calculation of interest u/s. 234B of the Act the ld. AO is directed to give the credit of the taxes paid by the assessee. As per the computation sheet given in the remand report and the interest based on the chart given by the ld. AR of the assesseewe direct the ld. AO to give credit of payment of tax for which credit was not granted while computing the interest as provision of section 234Bof the Act. The ld. AR of the assessee submitted that based on the non disputed facts the assessee is eligible to have reduction in interest u/s. 234B charged by the ld. AO for an amount of Rs. 1,43,33,259/- for a year about or so. Based on the finding so recorded and considering the actual date of payment of taxes the ld. AO is directed to reduce the interest wrongly computed u/s. 234 B of the Act and grant the refund arising out of this error in charge of interest u/s. 234B of the Act. In terms of these observations the ground no. 1 & 2 raised by the assessee is allowed.
8. Apropos to the ground no. 3 & 4 of the Act the bench noted that the assessee was denied the benefit of the interest u/s. 244A of the Act only on the ground that the net refund due and calculated by the lower authority for an amount of Rs. 94,98,065/- which is less then 10 % of the total demand raised upon the assessee for an amount of Rs. 18,70,28,635/-. On this issue the bench noted that if the interest charged I.T.A. No.367/Jodh/2023 Miraj Developers Ltd. 17 by the ld. AO in excess for an amount of Rs. 1,43,33,259/- u/s. 234B of the Act is considered based on the finding recorded by us in ground no. 1 & 2 then the refund amount comes to Rs. 2,38,31,324/- which is more then 10 % of tax demand of Rs. 18,70,26,635/- (APB-199-Scaned herein above). Even the ld. CIT(A) has after considering the remand report has held that if the assessee's refund is in excess of the 10 % of the determined tax then the interest is payable to the assessee. The relevant observation of the ld. CIT(A) is reproduced herein below :
As per remand report of the AO, the AO granted refund to the appellant of Rs. 94,98,065/-on account of excess interest charged u/s 234B and no interest u/s 244A was granted. The AO stated that though Section 244A provides for payment of interest on the amount of tax paid in excess of the amount of assessed tax but, it clearly provides that no interest shall be payable if the amount of refund is less than ten per cent of the tax. In the case of the appellant, the net tax was calculated as Rs. 18,70,28,635/- and the refund issued was Rs. 94,98,065/-.
Based on this aspect of the matter since the assessee is eligible to get relief u/s. 234 B of the Act for an amount of Rs. 1,43,33,259/- then after that credit the resultant figure of refund is more than 10% of the tax determined the assessee is eligible to receive the interest u/s. 244A of the Act in accordance with the law and when even the ld. AO as well as ld. CIT(A) has not disputed this fact that when the refund amount is more then 10 % of tax determined the assessee is eligible to receive the refund . Based on these non-disputed facts and then the interest I.T.A. No.367/Jodh/2023 Miraj Developers Ltd. 18 amount due to the assessee comes to Rs. 2,38,31,324/- which is more then 10 % of tax demand of Rs. 18,70,26,635/-. Based on these observation ground no. 3 & 4 raised by the assessee is allowed.
9. Ground no. 5 being general in nature does not require our adjudication.
In the result, the appeal of the assessee is allowed. Order pronounced in the open Court on 15/03/2024.
Sd/- Sd/-
(Dr. S. Seethalakshmi) (Rathod Kamlesh Jayantbhai)
Judicial Member Accountant Member
Dated /03/2024
Santosh/ Ganesh kumar
(On Tour)
Copy of the order forwarded to:
(1)The Appellant
(2) The Respondent
(3) The CIT
(4) The CIT (Appeals)
(5) The DR, I.T.A.T.
True Copy
By order