Income Tax Appellate Tribunal - Mumbai
Tata Sons Private Limited, Mumbai vs Assistant Commissioner Of Income Tax ... on 27 February, 2024
P a g e |1 5 Appeals Tata Sons Pvt. Ltd. Vs. JCIT-OSD/ACIT-2(3)(1) IN THE INCOME TAX APPELLATE TRIBUNAL "E" BENCH, MUMBAI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER & SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ITA Nos.2618, 2619 & 26 21/Mum/2023 (A.Ys. 2001-02, 2010-11 & 2011-12) Tata Sons Private Limited Vs. JCIT- OSD, Circle 2(3)(1) Bombay House, 24, Room No.552, 5 t h Floor, Homi Mody Street, Fort, Aayakar Bhavan, M.K. Mumbai - 400 001 Road, Mumbai - 400020 स्थायी ले खा सं ./जीआइआर सं ./ PAN/GIR No:AAACT4060A Appellant .. Respondent ITA Nos.2620 & 2622/Mum/2023 (A.Ys. 2006-07 & 2007-08) Tata Sons Private Limited Vs. ACIT-(3)(1) Bombay House, 24, Room No.552, 5 t h Floor, Homi Mody Street, Fort, Aayakar Bhavan, M.K. Mumbai - 400 001 Road, Mumbai - 400020 स्थायी ले खा सं ./जीआइआर सं ./ PAN/GIR No:AAACT4060A Appellant .. Respondent Appellant by : Madhur Agrawal Respondent by : P.D. Chougule Date of Hearing 21.02.2024 Date of Pronouncement 27.02.2024 आदे श / O R D E R Per Bench:
All these 5 appeals filed by the assessee are directed against the different order of CIT(A) NFAC, u/s 250 of the Ac pertaining to A.Y. 2001-02, 2006-07, 2007-08, 2010-11, 2011-12. Since, common issue on identical facts are involved in these 5 appeals filed by the assessee, P a g e |2 5 Appeals Tata Sons Pvt. Ltd. Vs. JCIT-OSD/ACIT-2(3)(1) therefore, for the sake of convenience all these appeals are adjudicated together by taking ITA No. 2618/Mum/2023 for A.Y. 2011-12 as a lead case and its finding will be applied mutatis mutandis to the other appeals wherever it is applicable.ITA No.2618/Mum/2023
"1. On the facts and circumstances of the case and in law, the Id CIT(A) ought to have held that the Id Assessing Officer erred in not granting interest on refund from the date on which the order giving effect to the CIT(A) order was passed determining the refund to the date on which the actual refund was credited to the Appellant's bank account
2. On the facts and circumstances of the case and in law, the ld. CIT(A) ought to have held that the Id. Assessing Officer erred in not adjusting the total refund, first towards the interest component under section 244A(1) and the balance towards the principal tax component.
3. On the facts and circumstances of the case and in law, the Id. CIT(A) ought to have held that the id. Assessing Officer erred in calculating the refund by appropriating the earlier refunds granted towards the interest as calculated then (i.e, at the time of earlier refunds issued) as against the revised interests computed at the time of granting the latest refund.
4. On the facts and circumstances of the case and in law, the Id. CIT(A) ought to have held that the Id. Assessing Officer erred in not granting interest under section 244A(1A) of the Act
5. Without prejudice to the above, the Id. CIT(A) erred in remanding the matter to the Assessing Officer which is violative of section 251 of the Act The Appellant craves leave to add, alter, vary, omit, substitute, or amend the above grounds of appeal, at any time before or at, the time of hearing of the appeal."
2. In this case the assessing officer has given effect to CIT(A) order No. CIT(A)-58/225/2015-16 dated 27.03.2017 on 02.04.2019 and total revised book profit u/s 115JB of the Act was determined at Rs.666,51,00,919/-. The assessee has filed application for rectification u/s 154 on order giving effect dated 2.04.2019 with the assessing officer on 15.07.2021. The assessee has submitted in the application filed u/s 154 that interest u/s 244A(1) of the Act has not been computed correctly. Further the assessee has also submitted that assessee is also P a g e |3 5 Appeals Tata Sons Pvt. Ltd. Vs. JCIT-OSD/ACIT-2(3)(1) entitled to receive additional interest on refund @ 3% per annum as the order of CIT(A) dated 27.03.2017 was received on 12.04.2017 for which time period for passing the order giving effect was 3 month from the end of the month in which the order u/s 250 was received as prescribed in sub-section (5) of Sec. 153 of the Act.
3. The assessee filed the appeal before the ld. CIT(A). The ld. CIT(A) has simply directed the AO for fresh looking at the computation.
4. During the course of appellate proceedings before us the ld. Counsel submitted similar issue on identical fact has been adjudicated by the ITAT Mumbai in the case of the assessee itself vide ITA No.2362/Mum/2012 dated 06.12.2023 and submitted that the issue is fully covered in favour of the assessee by the aforesaid decision of the ITAT.
5. On the other hand, the ld. D.R could not controvert this fact that the issue has been covered in favour of the assessee vide order of the ITAT decided in favour of the assessee as referred supra.
6. Heard both the sides and perused the material on record. Regarding Ground No.1: for not granting interest on refund from the date of which the order giving effect to the CIT(A) order was passed it is noticed that the assessing officer has received the order of CIT(A) dated 27.03.2017 on 12.04.2017, however, the assessing officer has passed the order giving effect to the CIT(A) order on 02.04.2019. As per sub- section (5) of Sec. 153 it is required to pass the order giving effect within 3 month from the date of receipt of the order. Since, the assessing officer has not passed the order within the period of 3 month as prescribed in sub-section (5) Sec. 153 therefore, assessee is entitled for additional interest u/s 244A(1A) @ 3% for the period for which delay was occurred in passing the appeal effect order. In this regard we have also perused the decision of ITAT in the case of the assessee itself vide ITA P a g e |4 5 Appeals Tata Sons Pvt. Ltd. Vs. JCIT-OSD/ACIT-2(3)(1) No.2362/Mum/2023 wherein identical issue on similar fact has been adjudicated in favour of the assessee. The relevant part of the decision is reproduced as under:
"10. The next issue contended pertaining to the interest calculation is that additional interest u/s. 244A(1A) to be calculated on the total amount of refund including Interest. In this regard the ld AR drew our attention to the provisions of sub-section (1A) of section 244A of the Act, in terms of which, when there is a delay in granting refund due to the assessee as a result of delay in passing an order giving effect to the appellate order or revisional order, the assessee is entitled to the additional interest on such amount of refund at 3% p.a. for the period as mentioned therein. The ld AR submitted that the ITAT order, was passed on 04.02.2015 & 01.01.2016 and the present OGE has been passed on 08.03.2016 and refund was received on 18.08.2022. The provision of Section 244A(1A) came into effect from 01.06.2016 and hence from 01.06.2016 to 31.08.2022 there is a delay of 75 months for which the assessee is entitled for additional 3% interest under section 244A(1A). The ld AR in this regard relied on the decision of the coordinate bench in case of ACIT v/s Bharat Petroleum Corporation Ltd. (Mumbai ITAT "B" Bench) (30.06.2021) (ITA No. 5231 to 5233 of 2019). The ld AR further submitted that interest u/s 244A(1A) of the Act cannot be held as interest-on-interest as held by the Hon. Supreme Court and followed by High Court(s). In this regard our attention was drawn to the decision of the Hon. Delhi High Court in the case of India Trade Promotion Organization v/s CIT (06.09.2013) 38 taxmann.com 233 wherein by placing reliance on the decision of the Hon. Supreme Court of India in the case of CIT v/s. H.E.G. Ltd. (2010) 324 ITR 331, it is held that the words " refund of any amount becomes due to the assessee" would include in its scope tax as well as interest which has accrued and is payable upto the date of refund. Accordingly, it is further held that when the revenue does not pay full amount of refund but part amount is paid, it will be liable to pay interest on the balance outstanding amount. This does not amount to payment of interest on interest".
11. We heard the parties and perused the material on record. We notice that the coordinate bench in the case of Bharat Petroleum Corporation Ltd (supra) has considered the applicability of section 244A(1A) for assessment years prior to 01.06.2016 and held that -
11. From the reading of the above decision, we are of the considered opinion that provisions of section 244A (1A) would apply only prospectively w.e.f 01.06.2016 and hence additional interest would be eligible only from that date and not from 01.04.2016. As the Hon'ble High Court has imposed caveat explaining the circumstances under which the additional interest can be granted u/s. 244A[14] of the Act, we are of the view that this matter should go back to the file of the Assessing Officer for examining the facts of the assessee in the present appeals and for application of the ratio of decision in view of the observations of their lordships on applicability of the additional interest to the present appeals. Thus, we restore this issue to the file Assessing Officer who shall examine the issue afresh in the light of the decision of the Hon'ble Gujarat High Court (supra).
P a g e |5 5 Appeals Tata Sons Pvt. Ltd. Vs. JCIT-OSD/ACIT-2(3)(1)
12. The provisions of sub-section (1A) to section 244A are inserted by the Finance Act, 2016 as a remedial measure to compensate the assessee in cases where there are delays in granting refunds due on account of delay in passing order giving effect to appellate or revisional orders. Applying the ratio laid down by the coordinate bench in the case of Bharat Petroleum Corporation Ltd (supra), we are of the considered view that the provisions of section 244A(1A) would be applicable in assessee's case from 01.06.2016 till the date of actual receipt of refund and accordingly we remit the issue back to the AO to examine the issue afresh and calculate the additional interest under section 244A(1A) in accordance with law."
Following the decision of the ITAT in the case of the assessee itself as supra we remit this issue to the AO to examine the issue afresh and calculate the additional interest u/s 244A(1A) in accordance with law as directed in the order of ITAT reproduced as above. Therefore ground no. 1 of the assessee is allowed for statistical purposes.
7. With respect to ground No. 2 & 3: Calculating the refund by appropriating the earlier refunds granted towards the interest as calculated then (i.e at the time of earlier refunds issued) as against the revised interests computed at the time of granting the latest refund the ld. Counsel submitted that the assessing officer has not computed the interest in accordance with the provision of Sec. 244A of the Act. He submitted that amount of refund granted earlier should be adjusted first against the interest component thereafter the balance amount should be adjusted against principle component of tax. He also referred the decision of the ITAT in the case of the assessee itself vide ITA No 2362/Mum/2023 wherein similar issue on identical fact has been adjudicated by the ITAT in favour of the assessee with the assistance of the ld. representative. We have perused the decision of the ITAT as referred above and find that the similar issue on identical fact has been adjudicated at para 3 by the ITAT as under:
3. With regard to issue of incorrect adjustment of refund for arriving at interest the ld AR submitted that where the refunds have been issued in parts, the AO while adjusting the refund issued earlier has erred in apportioning amount of earlier refund towards the principal and interest component determined then i.e. without considering the present relief. The AO has reduced P a g e |6 5 Appeals Tata Sons Pvt. Ltd. Vs. JCIT-OSD/ACIT-2(3)(1) interest only to the extent it was determined at the point of issuance of the earlier refunds, thus, leading to larger adjustment of the refund towards the tax component as against the interest component which is further summarised in the table given below:
4. The ld AR submitted that in accordance with the principle of equity. in terms of the Explanation to section 140A(1), the learned AO should have first apportioned the part refund towards the interest now calculated i.e as per Column (2) and then the balance, if any, towards the principal component. The AO has, however, reduced the old interest as reflected in Column (5).
Accordingly, as evident from Column (4) vs Column (1) of the above table, a larger amount has been reduced from the principal component leading to short refund. The ld AR further submitted that in terms of the Explanation to section 140A(1) of the Act, where the amount paid by an assessee towards self- assessment tax falls short of the aggregate amount of tax and interest, then, the amount so paid shall first be adjusted towards interest payable and the balance, if any, shall be adjusted towards tax payable, meaning thereby, the exchequer should never be deprived of its legitimate dues payable by the assessee in time. However, there is no such specific provision u/s. 244A of the Act with respect to adjustment of refund already issued for computing amount of interest payable to the assessee on the amount of refund due. Thus, the law is silent on this issue. Under these circumstances, fairness and justice demands that same principle should be applied while granting the refund as has been applied while collection of tax.
5. The ld AR relied on the decision of the coordinate bench in the case of Union Bank of India v/s ACIT (Mumbai IΤΑΤ) 11.08.2016 72 taxmann.com 348 where it is held that -
3.8 Thus, from the perusal of the above, it is clear that where the amount of tax demanded is paid by the assessee then it shall first be adjusted towards interest payable and balance if any whatever tax payable. Now, if we go through section 244A, we find that no specific provision has been brought on the statute with respect to adjustment of refund issued earlier for computing the amount of interest payable by the revenue to the assessee on the amount of refund due to the assessee. Thus, the law is silent on this issue. Under these circumstances, fairness and justice demands that same principle should be applied while granting the refund as has been applied while collecting amount of tax. The Revenue is not expected to follow double standards while dealing with the tax payers. The fundamental principle of fiscal legislation in any civilised society should be that the state should treat its citizens, (ie, taxpayers in this case) with the same respect, honesty and faimess as it expects from its citizens. It is further noted by us that the hon'ble Delhi High Court has P a g e |7 5 Appeals Tata Sons Pvt. Ltd. Vs. JCIT-OSD/ACIT-2(3)(1) already decided this issue in clear words which has been followed by the Tribunal in assessee's own case in the earlier years. It is further noted by us that assessee is not asking for payment for interest on interest. It is simply requesting for proper method of adjustment of refund and for following the same method which was followed by the Department while making collection of taxes. Under these circumstances, we find that judgment of the hon'ble Supreme Court in the case of Gujarat Fluoro Chemicals (supra) is not applicable on the facts of the case before us and thus the learned Commissioner of Income-tax (Appeals) committed an error in not following the decisions of the Tribunal of earlier years in the assessee's own case as well as the judgment of the hon'ble High Court in the case of India Trade Promotion Organisation (supra) (Emphasis supplied)
6. The ld DR on the other hand relied on the order of the lower authorities.
7. We heard the parties and perused the material on record. The first grievance of the assessee with regard to calculation of interest under section 244A is the way in which the AO has adjusted the refunds issued. In this regard we notice that the coordinate bench has been consistently holding the AO is required first adjust the interest component and then the taxes for the purpose of calculating interest under section 244A of the Act. The relevant extract from the decision of the coordinate bench in the case of Grasim Industries Ltd vs DCIT (123 taxmann.com 312) is as given below -
6. We find that assessee has raised ground before us stating that refund granted to the assessee is to be first adjusted against the correct amount of interest due on that date and thereafter, the left over portion should be adjusted with the balance tax. We find that in the instant case refund was granted to the assessee vide refund order in October 2013 and it was pleaded by the assessee that the said refund is to be adjusted against the correct amount of interest payable thereof to be computed as per the directions of the Ld. CIT(A) and only the balance amount is to be adjusted against tax paid. Accordingly, unpaid amount is the tax component and therefore, the assessee would be entitled for claiming interest on the tax component remaining unpaid. In our considered opinion, the same would not tantamount to interest on interest as alleged by the Ld. CIT(A) in para 4.2 on his order. Similarly, the refund granted to the assessee in July 2016 is to be adjusted against the correct interest payable on the tax amount remaining unpaid and balance towards tax component. We find that this issue is already settled in favour of the assessee by the following decisions of this Tribunal:-
a. Decision in the case of Union Bank of India v. Asstt. CIT (2016) 72 taxmann.com 348/162 ITD 142 (Mum.).
b. Decision in the case of Bank of Baroda v. Dy. CIT [IT Appeal No. 646 (Mum) of 2017, dated 20-12-2018)
7. In view of our aforesaid decision in the facts and circumstances of the instant case and respectfully following the judicial precedents relied upon hereinabove, the alternative argument made by the id AR on without prejudice basis, need not be gone into and no opinion is given herein and they are left open.
8. Accordingly, we direct the Id. AO to compute the correct amount of interest allowable to the assessee as directed by the id. CIT(A) as on the P a g e |8 5 Appeals Tata Sons Pvt. Ltd. Vs. JCIT-OSD/ACIT-2(3)(1) date of giving effect to the Tribunal's order i.e. 6-9-2013 We further hold that the refund granted on 6-9-2013 be first appropriated or adjusted against such correct amount of interest and consequently, the short fall of refund is to be regarded as shortfall of tax and that shortfall should then be considered for the purpose of computing further interest payable to the assessee u/s.244A of the Act till the date of grant of such refund. Accordingly, the grounds raised by the assessee in this regard are allowed for both the years."
(Emphasis supplied)
8. The ratio laid down is that the amount of interest u/s. 244A is to be calculated by first adjusting the amount of refund already granted towards the interest component and balance left if any shall be adjusted towards the tax component. Therefore we hold that the manner in which the assessing officer has adjusted the refund is not correct and that the assessee would be entitled for interest on the unpaid refunds in accordance with the principle laid out in the aforesaid decision of Tribunal. The ld AR during the course of hearing submitted a detailed working of the manner in which the AO has calculated the interest and also the correct way in which the same is to be calculated (page 23 and 24 of paper book) Accordingly the assessing officer is directed to compute interest under section 244A as per the claim of the assessee after giving a proper opportunity of being heard."
Since the issue on hand being squarely covered by the decision of the ITAT Mumbai in the case of the assessee itself as discussed supra therefore, following the decision of the ITAT as discussed above we direct the assessing officer to re-compute the interest as directed in the order of the ITAT as referred above, therefore, this ground no. 2 & 3 of the appeal are allowed.
8. Regarding ground No.4: pertaining to Error in not granting interest u/s 244(1A) of the Act we find that similar issue on identical fact has been adjudicated by the ITAT vide ITA No. 2362/Mum/2023 in the case of the assessee itself. The relevant operating part of the decision is reproduced as under:
"9. On the issue of grant of refund till the date of issue of refund, the ld AR submitted that the issue is squarely covered in favour of the assessee vide the decisions of Hon'ble Bombay High Court in case of CIT vs. Pfizer Limited [1991] 191 ITR 626 (Bom) and also of City bank NA Mumbai Vs. CIT in ITA No. 6 of 2001 as well as the decision of CIT vs. K.E.C International in ITA No. 1038 of 2000. Respectfully following the aforesaid precedents, in our considered view, the assessee is justified in seeking interest u/s 244A of the Act upto the date of receipt of the refund order, i.e. 18.08.2022. Accordingly, the AO is directed to P a g e |9 5 Appeals Tata Sons Pvt. Ltd. Vs. JCIT-OSD/ACIT-2(3)(1) re-calculate the interest up to the date of actual receipt of refund by the assessee. It is ordered accordingly."
Following the decision of the ITAT in the case of the assessee itself as referred supra we direct the AO to grant refund u/s 244A of the Act up to the date of receipt of the refund order. Therefore, ground of appeal no. 4 of the appeal of the assessee is allowed.
Ground No.5: The ld. CIT(A) error in remanding the matter to the AO which is violative of Sec. 251 of the Act:
9. This ground is pertaining to violation of Sec. 251 of the Act for remanding the matter to the AO vide CIT(A) was not discussed therefore the same stand dismissed.
10. The appeal of the assessee is partly allowed.ITA No. 2619/Mum/2023
11. On similar issue and identical facts we have adjudicated in the ground of appeal No. 2618/Mum/2023 for assessment year 2011-12 as above in this order. Applying the finding of the aforesaid decision as mutatis mutandis this ground of appeal of the assessee is also partly allowed.ITA No. 2620/Mum/2023
12. On similar issue and identical facts we have adjudicated in the ground of appeal No. 2618/Mum/2023 for assessment year 2011-12 as above in this order. Applying the finding of the aforesaid decision as mutatis mutandis this ground of appeal of the assessee is also partly allowed.ITA No. 2621/Mum/2023
13. On similar issue and identical facts we have adjudicated in the ground of appeal No. 2618/Mum/2023 for assessment year 2011-12 as P a g e | 10 5 Appeals Tata Sons Pvt. Ltd. Vs. JCIT-OSD/ACIT-2(3)(1) above in this order. Applying the finding of the aforesaid decision as mutatis mutandis this ground of appeal of the assessee is also partly allowed.ITA No. 2622/Mum/2023
14. On similar issue and identical facts we have adjudicated in the ground of appeal No. 2618/Mum/2023 for assessment year 2011-12 as above in this order. Applying the finding of the aforesaid decision as mutatis mutandis this ground of appeal of the assessee is also partly allowed.
15. In the result, all the appeals of the assessee are partly allowed.
Order pronounced in the open court on 27.02.2024 Sd/- Sd/-
(Vikas Awasthy) (Amarjit Singh)
Judicial Member Accountant Member
Place: Mumbai
Date 27.02.2024
Rohit: PS
आदे श की प्रतितिति अग्रेतिि/Copy of the Order forwarded to :
1. अपीलाथी / The Appellant
2. प्रत्यथी / The Respondent.
3. आयकर आयुक्त / CIT
4. विभागीय प्रविविवि, आयकर अपीलीय अविकरण DR, ITAT, Mumbai
5. गार्ड फाईल / Guard file.
सत्यावपि प्रवि //True Copy// आदे शानुसार/ BY ORDER, उि/सहायक िंजीकार (Dy./Asstt. Registrar) आयकर अिीिीय अतिकरण/ ITAT, Bench, Mumbai.