Income Tax Appellate Tribunal - Mumbai
State Bank Of India, Mumbai vs Dcit 2(2), Mumbai on 14 December, 2016
आयकर अपीऱीय अधिकरण, मुंबई न्यायपीठ 'ई', मुंबई । IN THE INCOME TAX APPELLATE TRIBUNAL "E", BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM & SHRI AMARJIT SINGH, JM आमकय अऩीर सं./ITA Nos.1613 to 1616/Mum/2014 ( नििाारण वषा / Assessment Years : 1984-85 to 1988-89) State Bank of India, Vs. DCIT-2(2), Mumbai Financial Reporting and Taxation Department, 3rd Floor, Corporate Centre State Bank Bhavan, Madam Cama Road, Nariman Point, Mumbai-400021 स्थामी रेखा सं ./ जीआइआय सं ./ PAN/GIR No. : AAACS 8577 K (अऩीराथी /Appellant) .. (प्रत्मथी / Respondent) ननधाारयती की ओर से /Assessee by : Shri C. Naresh याजस्व की ओर से /Revenue by :Shri B. Pruseth सुनवाई की तायीख / Date of Hearing : 21/09/2016 घोषणा की तायीख/Date of Pronouncement 14/12/2016 आदे श / O R D E R PER R.C.SHARMA (A.M):
These are the appeals filed by the assessee against the order of CIT(A), Mumbai, for the assessment years 1984-85 to 1988-89.
2. Rival contentions have been heard and record perused.
3. The facts of the case are that following ITAT's order in appeal no 9254 & 9255/Bom/1990 dated 22.08.2006, the appeal effects were given vide order u/s 143(3)/254 dated 19.12.2007 in assessee's case for AYs 1984- 85, 1985-86, 1987-88 & 1988-89 and refund together with interest thereon was granted to the assessee in all those assessment years. Thereafter a notice u/s 154 was issued on 28.03.2012 for rectifying the amount of 2 ITA Nos.1613-1616/14 State Bank of India interest payable/ paid to the assessee on the refund granted to it in all these four assessment years. The AO passed orders u/s 154 dated 31.03.2012 in all these years separately and raised the demand on account of excess payment made to it.
4. By the impugned order CIT(A) confirmed the action of the AO against which assessee is in further appeal before us.
5. Grievance of assessee in the assessment year 1984-85 pertains to granting of interest u/s.244(1A) on the account of refund. It was contention of assessee that AO has not granted correct amount of interest on the refund. Further contention of learned AR was that interest has not been granted on the interest that became due to the assessee on account of adjusting the refunds granted first against the tax refunds due against the correct procedure of adjusting the same first against interest refunds due and thereafter, against the tax refunds due.
6. All the grounds raised by the assessee relates to the withdrawal of interest payable to it [on the refund] by way of passing the rectification order u/s 154. The assessee has challenged it on legality of these orders too. The issues are basically computation of interest payable to it u/s 214, 244 & 244A of the IT Act.
7. We have considered rival contentions and found that as against AO's action for computation interest u/s.244A(1)(b). Contention of assessee was that provisions of Section 244A is applicable from assessment year 1989-90. The CIT(A) has directed the AO as under:- 3
ITA Nos.1613-1616/14 State Bank of India 4.2.1 It is noted that the AO has computed interest u/s 244A(1 )(b) for part of the period [w.e.f 01.01.1994]. The provision of section 244A is applicable w.e.f. AY 1989-90 only. The relevant assessment years are 1984-85, 1985-86, 1987-88 & AY 1988-
89. The provisions applicable for these assessment years are sections 214 & 244 [and not 244A]. The AO is therefore directed to re-compute the interest payable to the assessee [ u/s 214 & 244 only] and revise the ITNS-150A.
4.2.2 While computing interest under section 214, care need to be taken for the amendments made in that provision. As per sub-
section(1), the interest is payable on the advance tax that exceeds 'the assessed tax' for the period 1st April (next following the financial year in which advance tax was paid) to the date of regular assessment. Further Sub-section (1A) allows the reduction/ increase into such interest on account of appeal effect for relief I enhancement, as the case may be, on addition to the total income. But this subsection (1A) has been inserted w.e.f. 01.04.1985 and applicable for AY 1985-86 and onwards (till AY 1988-89). Prior to 01.04.1985, sub-section (1A) was all together different and as such reduction / increase of interest payable under sub section (.1) was not possible. For ready reference, the section 214 as it existed w.e.f. 01.04.1985 and prior to that are reproduced hereunder:
8. Since the relevant assessment under consideration is assessment year 1984-85, we do not find any infirmity in the order of CIT(A) for directing the AO to compute interest u/s.214 and 244 and not u/s.244A of the IT Act. Accordingly, we confirm the action of the CIT(A) in this regard.
9. The grievance of the assessee in the A.Y.1984-85 pertains to applicability of provisions of Section 214(1A) for allowing interest on refunds. AO declined interest u/s.214(1A) on the plea that amendment was brought w.e.f. A.Y 1985-86, therefore, no interest was to be allowed in the A.Y.1984-85. CIT(A) confirmed the order of AO and assessee is in further appeal before us.4
ITA Nos.1613-1616/14 State Bank of India
10. We found that issue is squarely covered by the decision of Hon'ble Bombay High Court in the case of Ultramarine & Pigments Ltd. 286 ITR 86, wherein the Hon'ble High Court held that even though sub-section 1A was introduced in Section 214 by Taxation Law (Amendment)Act, 1984 w.e.f.1.4.1985, the same would be applicable to all the pending cases. It was observed by Hon'ble High Court that in view of the decision of Division Bench in the case of CIT v. Saswad Mali sugar Factory Ltd., 249 ITR 756 wherein the Division Bench held that the Taxation Laws (Amendment) Act, 1984 is procedural in nature and, therefore, it will apply to all the pending actions. This being so, sub-section (1A) which was introduced in section 214 will apply to the petitioner's case, for the assessment year 1982-83.
11. Respectfully following the above decisions of Hon'ble Bombay High Court, we do not find any merit in the order of the lower authorities for declining the claim of interest u/s.214(1A) for the assessment year 1984- 85 under consideration.
12. Common grievance in all the years under consideration pertains to rate of interest payable as per the provisions of Section 214/244.
13. We have considered rival contentions and found that the CIT(A) had held that even though the provisions of section 214/244 were applicable the rate of interest given in 244A has to be considered for grant of interest on refund. Since the provisions of section 214/244 has not been repealed, therefore, the rate of interest as given in the said sections i.e., Section 214 / 244 in the respective years should only be applied. In 5 ITA Nos.1613-1616/14 State Bank of India view of the above, we direct the AO to allow interest u/s.214/244, as per the rate prevailing in the respective assessment years. We direct accordingly.
14. In the assessment year 1984-85, 1985-86 and 1987-88, the assessee has not given full credit for the TDS/DITR while computing net tax payable/refundable and interest thereon. In the interest of justice, we restore this ground back to the file of the AO to verify the same and for deciding the issue afresh as per law. We direct accordingly.
15. In the result, appeals of the assessee are allowed in part, in terms indicated hereinabove.
Order pronounced in the open court on this 14/12/ 2016.
Sd/- Sd/-
(AMARJIT SINGH) (R.C.SHARMA)
न्यानयक सदस्य / JUDICIAL MEMBER ऱेखा सदस्य / ACCOUNTANT MEMBER
भुंफई Mumbai; ददनांक Dated 14/12/2016
प्र.कु.मभ/pkm, नन.स/ PS / Karuna Sr.P.S.
आदे श की प्रनिलऱपप अग्रेपषि/Copy of the Order forwarded to :
1. अऩीराथी / The Appellant
2. प्रत्मथी / The Respondent.
3. आमकय आमुक्त(अऩीर) / The CIT(A), Mumbai.
4. आमकय आमुक्त / CIT
5. ववबागीम प्रनतननधध, आमकय अऩीरीम अधधकयण, भंफ ु ई / DR, ITAT, Mumbai आदे शािसार/ BY ORDER,
6. गार्ा पाईर / Guard file.
सत्मावऩत प्रनत //True Copy// उप/सहायक पुंजीकार (Asstt. Registrar) आयकर अपीऱीय अधिकरण, भुंफई / ITAT, Mumbai