Income Tax Appellate Tribunal - Mumbai
Jindal Drugs P. Ltd, Mumbai vs Assessee on 24 August, 2012
IN THE INCOME TAX APPELLATE TRIBUNAL
MUMBAI BENCH ' I', MUMBAI
BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER &
SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER
I.T.A. NO.8477/M/2010
ASSESSMENT YEAR: 2006-2007
M/s. Jindal Drugs Pvt. Ltd., Vs. ACIT CC-8,
Bhaktawar, 6th Floor, Mumbai.
229, Nariman Point,
Mumbai - 400 021.
PAN: AAACJ1000A
(Appellant) (Respondent)
Appellant by : Shri Nimesh Vora, AR
Respondent by : Shri K.G. Kutty, DR
Date of Hearing: 08.08.2012 Date of order: 24.08.2012
ORDER
Per VIJAY PAL RAO, JM:
This appeal by the assessee is directed against the order dated 12.10.2010 of the CIT (A)-37, Mumbai for the assessment year 2006-2007.
2. The assessee has raised the following grounds in this appeal.
"1. The learned Assessing Officer and CIT (A) erred in not granting interest u/s 244A on the Self Assessment tax paid from the date of payment of Self Assessment tax (date 28/11/2006) to the date of Assessment Order (date 31/12/2008).
2. The learned Commissioner appeals erred in confirming the act of the Assessing officer in total disregard of the judicial discipline, ignoring the judgment of the jurisdictional Tribunal in the case of 2 I.T.A. NO.8477/M/2010 BSES LTD (2008) 113 TTJ 227 which was brought to his notice while making the submissions."
3. The only issue arises for our consideration and adjudication is whether the interest u/s 244 on refund is to be calculated from the date of payment of tax on self assessment or from the date of assessment order.
4. We have heard the learned DR as well as the learned AR and considered the relevant material available on record. The learned DR has contended that as per the provisions of section 244A the interest on refund of tax has to be calculated from the date on which the payment of tax become due and not from the date when the assessee has paid on the basis of self-assessment. He relied upon the orders of the authorities below.
5. On the other hand, the learned AR of the assessee submitted that the issue is covered by the various decisions of Hon'ble High Courts as well as Tribunal. He has relied upon the following decisions.
1. CIT vs. Vijaya Bank (338 ITR 489) (Kar HC)
2. CIT vs. Sutlej Industries Limited (325 ITR 331) (Del HC)
3. Relevant extract of DCIT vs. BSES Ltd (113 TTJ 227) (Mumbai ITAT)
4. DDIT (IT) vs. G.E. Asset management Incorporated A/c General Pension Trust (ITA No. 6015/Mum/2009) (Mumbai ITAT)
6. We have considered the rival submissions and carefully perused the relevant provisions as well as decisions relied upon by the assessee. In the case of CIT vs. 3 I.T.A. NO.8477/M/2010 Vijaya Bank (supra), Hon'ble Karnataka High Court after considering the decision of Hon'ble Delhi High Court has observed and interpreted the relevant provisions of section 244A in para 13 to 15 as under:
"13. Therefore, the object behind the insertion of section 244A, as understood by the Department, is that an assessee is entitled to payment of interest for money remaining with the Government which would be ordered to be refunded. Therefore, if that is the object behind the insertion of section 244A, the contention of the Revenue that if the case does not fall under either of the clauses in section 244A, no interest is payable, is without any substance.
14. Clauses (a) and (b) specifically refer to the instances where interest is paid under the Act. It is not exhaustive. It is possible, in a given case, that after the expiry of the financial year, the assessee may pay tax either along with the self-assessment return or even before the return is filed. If ultimately the said payment is found to be in excess and the Department chooses to refund the said amount, then the question would be, from what date interest is payable since interest is payable on such refunds under section 244A. In the absence of an express proviso as contained in clause (a), it cannot be said that the interest is payable from the 1st day of April of the assessment year. At the same time, as the said payment of tax was not made in pursuance of a notice of demand issued under section 156, Explanation to clause
(b) of section 244A has no application. In such cases, as the opening words of clause (b) expressly provides in any other case the payment of tax subsequent to the first day of April of the assessment year, either before or along with filing of the return would squarely fall under clause (b) and, therefore, when the said amount is ordered to be 4 I.T.A. NO.8477/M/2010 refunded the interest is to be calculated from the date of such payment of tax. Having regard to the scheme of section 244A and the circular issued by the Board which shows how the Department has understood the section coupled with the fact that the principle underlying the said section is that, any excess payment of tax paid by the assessee is not only to be refunded but it has to be refunded with interest, if the case of the assessee does not fall under clause (a) or the Explanation to clause (b), the excess tax paid shall be refunded with interest from the date of payment of such tax.
15. In the instant case, it is not in dispute that the assessee has paid a sum of Rs. 15.5 crores on June 29, 2002, even before the date of filing of the return. It is that amount which is ordered 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 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 June 29, 2002, till the date of refund. This is precisely what the Appellate Commissioner as well as the Tribunal has said. It is in accordance with the 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. The appeal stands dismissed. No costs."
7. Respectfully following the decision of Hon'ble Karnataka High Court as well as decision of Hon'ble Delhi High Court (supra), we decide this issue in favour of the assessee and against the Revenue. The AO is directed to calculate the interest on refund from the date of payment of tax till the date of refund. 5
I.T.A. NO.8477/M/2010
8. In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on this 24th day of August, 2012.
Sd/- Sd/-
(N.K. BILLAIYA ) (VIJAY PAL RAO)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Date : 24 .8.2012
At :Mumbai
Okk
Copy to :
1. M/s. Jindal Drugs Pvt. Ltd., Mumbai.
2. ACIT CC-8, Mumbai
3. The CIT (A), Concerned.
4. The CIT concerned.
5. The DR "I", Bench, ITAT, Mumbai.
6. Guard File.
// True Copy//
By Order
Assistant Registrar
ITAT, Mumbai Benches, Mumbai