Income Tax Appellate Tribunal - Chandigarh
Vardhman Textiles Ltd, Ludhiana vs Pr.Cit-1, Ludhiana on 30 July, 2021
आयकर अपील य अ धकरण, च डीगढ़ यायपीठ "बी", च डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH 'B', CHANDIGARH BEFORE: SMT.ANNAPURNA GUPTA, ACCOUNTANT MEMBER AND SHRI R.L. NEGI, JUDICIAL MEMBER आयकर अपील सं./ ITA No.1264 /Chd/2019 नधा रण वष / Assessment Year : 2002-03 M/s Vardhman Textiles Ltd., बनाम The D.C.I.T. , (Formerly Known as M/s Range-I, Ludhiana. Mahavir Spinning Mills Ltd.), Vardhman Premises, Chandigarh Road, Luhiana.
थायी लेखा सं./PAN NO: A A B C M 4 6 9 2 E
अपीलाथ /Appellant यथ /Respondent
आयकर अपील सं./ ITA No.1265 /Chd/2019
नधा रण वष / Assessment Year : 2003-04
M/s Vardhman Textiles Ltd., बनाम The A.C.I.T. ,
(Formerly Known as M/s Circle-I, Ludhiana.
Mahavir Spinning Mills Ltd.),
Vardhman Premises,
Chandigarh Road,
Luhiana.
थायी लेखा सं./PAN NO: A A B C M 4 6 9 2 E
अपीलाथ /Appellant यथ /Respondent
आयकर अपील सं./ ITA No.1266 /Chd/2019
नधा रण वष / Assessment Year : 2004-05
M/s Vardhman Textiles Ltd., बनाम The J.C.I.T. ,
(Formerly Known as M/s Range-I, Ludhiana.
Mahavir Spinning Mills Ltd.),
Vardhman Premises,
ITA Nos.1264 to 1267/Chd/2019
&
ITA Nos.103 to 106/Chd/2020
A.Ys. 2002-03 to 2005-06
Page 2 of 28
Chandigarh Road,
Luhiana.
थायी लेखा सं./PAN NO: A A B C M 4 6 9 2 E
अपीलाथ /Appellant यथ /Respondent
आयकर अपील सं./ ITA No.1267 /Chd/2019
नधा रण वष / Assessment Year : 2005-06
M/s Vardhman Textiles Ltd., बनाम The Addl.CIT ,
(Formerly Known as M/s Range-I, Ludhiana.
Mahavir Spinning Mills Ltd.),
Vardhman Premises,
Chandigarh Road,
Luhiana.
थायी लेखा सं./PAN NO: A A B C M 4 6 9 2 E
अपीलाथ /Appellant यथ /Respondent
&
आयकर अपील सं./ ITA Nos.103 to 106/Chd/2020 नधा रण वष / Assessment Years : 2002-03 to 2005-06 M/s Vardhman Textiles Ltd., बनाम The Pr.CIT-I , (Formerly Known as M/s Ludhiana.
Mahavir Spinning Mills Ltd.), Vardhman Premises, Chandigarh Road, Luhiana.
थायी लेखा सं./PAN NO: A A B C M 4 6 9 2 E
अपीलाथ /Appellant यथ /Respondent
नधा रती क! ओर से/Assessee by : S/Shri Subhash Aggarwal, Adv.
& Rishit Dhingra, CA
राज व क! ओर से/ Revenue by : S/Shri Sandeep Dahiya, CIT
& Ashok Khanna, Addl.CIT
ITA Nos.1264 to 1267/Chd/2019
&
ITA Nos.103 to 106/Chd/2020
A.Ys. 2002-03 to 2005-06
Page 3 of 28
सन
ु वाई क! तार&ख/Date of Hearing : 30.06.2021
उदघोषणा क! तार&ख/Date of Pronouncement: 30.07. 2021 (Hearing through webex) आदे श/Order PER BENCH :
Al l th e p re se n t a p p e a l s h a ve b ee n p re fe r re d b y t he sa me a s se s se e . Wh i le the a ppe a ls in I TA N os. 1 2 64 to 12 6 7 /C hd /2 0 19 h a ve bee n f ile d a ga i n st se p a r a te or de r s of the Le a r ne d Com mi ssi on e r of I n come Ta x ( A p pe a ls )-I , Lud hi a n a [ i n s h o r t t h e ' L d. C I T( A ) ' ] da te d 26 . 0 7.2 0 19 , t he a pp e a ls i n I TA N os. 1 0 3 to 1 0 6 /C hd /2 0 20 h a ve b ee n f i le d a ga i nst t he or der of t he Le a r ne d P ri n ci p a l C omm i ss ion e r of I nc ome Ta x-I , Lu d hi a n a [in s h or t the 'Ld. P r. CI T) ] d a te d 26 . 07 . 2 01 9 .
B oth th e tw o gr ou p s of a p p e a l s r e l a te to the sa me a sse ssme nt ye a r s i . e . 2 0 02 -0 3 t o 2 0 0 5 -06 a nd the on l y i ss ue in vol ve d, i t w a s com mon gr ou nd , r e l a te d t o a l low a b i li ty of in te re st on re f und u/s 2 44 A of t he I n co me Ta x Ac t , 1 9 61 (i n sho rt ' the Act ')a n d the p e ri od fo r w h ic h i nt e r e st i s t o b e a ll ow e d re spe c ti ve l y i n the t wo gr ou p s of a p p e a l s.
ITA Nos.1264 to 1267/Chd/2019 & ITA Nos.103 to 106/Chd/2020 A.Ys. 2002-03 to 2005-06 Page 4 of 28
2. B r ie fl y e xp la i n ing the b a ck gr ou nd i n wh i ch t he a b ove tw o s e ts of a p p ea l s a ro se , t he Ld .C ou ns e l f or th e asse ssee poi n te d ou t th at th e Ld . C I T( A) , in th e se con d r oun d on re stor a t ion of ce r ta in i ss ue s b y th e I TA T, w hi l e ad j ud ic a ti ng the i ssue re l a ti ng to the t re a tme nt of in te re st re ce ive d u nde r TU F S ub si d y S ch e me , w he the r ca pi ta l or r e ve n ue , he ld t he sa me to b e ca p i ta l i n na tu r e b u t w h il e hol d i ng s o ga v e a di r e c tio n th a t the re f un d ge ne r a te d o n a c coun t of th e cl a i m of the a sse s see b e i ng s o a l l owed , w a s n ot e n title d to a ny in te re st the re on si nc e the de la y in th e gr a n t of re f un d w a s a ttr ib u ta b le to th e a s se sse e a s i t ha d o ri gi n a ll y re tur n e d the sa i d i nte re st a s r e ve n ue i n na tur e a nd ha d for the f i rs t t i me ma de th is cl a i m on ly in a p p e a l bef or e t he I TA T. Ag ain st thi s di r e c tio n of the Ld .C I T(A ) th e a s se sse e we nt in a p p e a l be fore the I TA T w ho re stor e d the i ss ue to th e C I T( A) on n o tin g tha t wh i le g iv in g th i s d ir e cti on t he a sse sse e ha d n ot bee n he a r d at a l l. A cco rd i ng ly , in p ur s ua n ce to th i s d i rec tio n t he Ld. C I T( A) p a ss e d or d e r a f re sh an d he ld t he re in th a t the de la y i n re fu nd w a s a t tr ib u ta b le to the a s se s se e b u t s in ce the p r ov is ion s of the Act r e q ui red the p e ri od of d e la y to b e de te r mi ne d b y the Ld . P r .C I T, a s p e r se ct ion 24 4 A of th e Ac t, he d i re cte d the AO to r e fe r the ma tte r to t he Ld . Pr . C I T. I n con se q ue n ce to th i s d i r e ct ion th e ma t te r w a s r e fe rr e d to t he ITA Nos.1264 to 1267/Chd/2019 & ITA Nos.103 to 106/Chd/2020 A.Ys. 2002-03 to 2005-06 Page 5 of 28 Ld. Pr . C I T w ho i n tu r n p a sse d h i s or de r f or a ll th e fou r ye a r s d a te d 26. 0 7. 2 01 9 . Th e fi rs t fo ur se t of a p p e als a ccor d i ng ly , ha v e bee n fi le d a ga i ns t t he or de r of the Ld. C I T( A) h ol d in g t he de l a y i n re f un d to be a t tr ib u ta b le to the a sse ssee a nd d i re cti n g the A O t o r e fe r th e ma tt e r to the Pr . C I T, w hi l e th e ot he r gr oup of f our a p p e a l s a re d ire cte d a ga i nst th e or d e r of th e Ld . P r. C I T s o p a ss e d on a r e fe re n ce ma de b y the A O . As i s e vi de n t, a l l of the m r e l a te to the i ssue of in te re st on re fun d .
At the out se t it se l f , b oth the p a rti e s c once de d t hat t he or de r o f the Ld . P r . C I T w a s n ot a p p e a b le be fo re th e I TA T i n te r ms o f se ct ion 2 5 3 of t he Act . I n v ie w of the sa me , t he a pp e a ls i n I TA N os .1 0 3 to 1 0 6/C h d /2 02 0 a re d i smi sse d a s non -ma i nta i n a bl e .
3. N ow ta k i ng u p the a ppe a ls o f th e a s se s se e in I TA N os. 1 26 4 t o 1 2 6 7/C hd /2 01 9 , si n ce the is sue w a s i d e n tic al a nd a r is in g i n th e b a ck d r op o f i de nt ic a l se t of f a ct s, t he Ld. C ou ns e l f or the a sse ssee too k u p t he a p pea l in I TA N o.1 2 6 4 /C hd /2 0 1 9 as th e lea d c a se a nd ma de hi s a rg ume n ts ba se d on th e s a id c a se . We s ha l l be de a l in g w i th the a p pe a l in ITA N o. 1 26 4 /C h d/2 0 1 9 and ou r de ci si on ITA Nos.1264 to 1267/Chd/2019 & ITA Nos.103 to 106/Chd/2020 A.Ys. 2002-03 to 2005-06 Page 6 of 28 re nde re d the re i n w i l l a p p l y mut a ti s mut a nd i s to the re st of the a p pe a l s a l so.
4. Th e g ro un ds of a p p e a l ra i se d i n ITA N o. 1 2 64 /C h d /2 0 1 9 a re a s u nde r :
"1 T h a t th e o rde r p a ssed b y the L d .C IT ( A) i s con tr ar y to l a w a n d f ac ts of th e c a se.
2. T h a t the L d . C IT ( A ) erre d in l a w and on f ac ts in n o t al l o wi n g in te re st u / s 2 4 4 a of th e in c o me tax ac t, 1 9 61 to th e a sse s see on th e amou n t of r ef un d in rel a ti on to in tere s t rei mbu r se men t u nd er T UF S (T ec h n ol ogy Upgr ad a tio n F u n d S ch eme) .
3. T h a t th e a p p el l an t c r av e s to add / a l ter / a me nd an y grou n d of ap pe al on or bef ore th e d u e da te of he aring o f appe al . "
5. Re ite r a ti ng the f a cts r e l a tin g to t he b a c kg ro un d i n wh i ch th e i ss ue of i nte re st on ref un d a r ose i n the c a se of the a sse sse e a s a b ov e , the Ld. C ou ns e l f or the a ss e ssee ve he me ntl y op pose d the or de r pas se d b y t he Ld .C I T(A ) in t he pr e se n t c a se . Th e a r gu me n t of th e Ld . C oun se l for t he a sse sse e wa s th a t the a s se s see w a s e n ti tle d to in te re st on re fu nd a s p e r the pr ov i si ons of se cti on 2 44 A (1 ) of th e A ct a nd th e re w a s n o de la y a ttr i b uta bl e to the a sse ssee a t a l l so a s to a ttr a ct the p r ovi si ons of se cti on 24 4 A (2 ) of t he Ac t f or re fe rr i n g the ma tte r to the Ld . Pr . C I T b y th e A O a s d i re cte d by the Ld. C I T( A) i n h is or d e r . V is -à -vi s h is con ten ti on tha t ITA Nos.1264 to 1267/Chd/2019 & ITA Nos.103 to 106/Chd/2020 A.Ys. 2002-03 to 2005-06 Page 7 of 28 the a s se s se e w a s e n ti tle d t o i n te re s t on the r e fun d f or t he e nt ire pe r i od of delay as pe r th e p r ovi si ons of se cti on 24 4 A( 1 ) of th e A ct, h e p oi nte d ou t th a t th e la w s ti pu l a te s in te re st on re fund of se l f a ss es sme n t tax paid by t he a sse sse e a l so a s p e r the pr ov is io ns of se c ti on 2 4 4A( 1 )( a a ) of the A ct a n d in th e fa c ts of the p re se nt c a se wh e re i n the a sse sse e ha d or ig in a ll y r e tu r ne d th e i n te re st on TU F su bs id y as i ts in co me and p a id t he ta xe s th e re o n, w hi c h was sub s e q ue nt ly on a p le a r a ise d be f ore the I TA T, r e st ore d to the Ld . C I T( A) a nd a l low e d b y h im a s b e in g ca p i ta l i n na tu r e , the re fun d a r os e to th e a sse ssee of the se lf a sse ssme nt ta x paid by the a s se s se e on the sa me . He con te n de d t ha t th e p r ovi si on s of l a w w e re si mpl e a n d c le a r a nd th e re w a s no a mb i gu it y i n th e s a me a t a l l and r e q u ire d in te re st to b e pa id on th e d e la y f or th e e nt ire pe r i od f ro m the p a yme nt of ta x e s to the g ra nt of re f un d . He c ont e n de d tha t th e p r ovi si on s o f s e ct ion 2 4 4 A( 2 ) re q ui r in g r e fe re nce by the A O t o t he Pr .C I T w a s o nl y i n th e ci r cums ta n ce s w he re the re w a s a de l ay in t he "p r oce ed i ng s re su lti n g in r e fu nd ". He sta te d th a t me re l y " ma ki n g a c l a im a t a l a te r sta g e " w as not e q u iv a le nt to d e l a y in the pr oc ee di n gs of re fu nd . Tha t the re w a s d i ffe ren ce be twee n the t wo ph r a se s a nd mak i ng a cl a im a t a la te r st a ge d i d not ta n ta mou nt t o d el a y i n t he ITA Nos.1264 to 1267/Chd/2019 & ITA Nos.103 to 106/Chd/2020 A.Ys. 2002-03 to 2005-06 Page 8 of 28 pr oc ee d i ng s of r e fu nd . He s ta te d th a t hi s c la i m f or i nte re st on r e f un d f or the e n ti re pe r i od as s pe ci fie d in se c ti on 24 4 A( 1 ) of the Ac t was su ppor t e d by v a r ious j ud i ci al de ci si ons of the H on 'b le H ig h C our t a nd e ve n H on 'ble Su pr e me C our t. He dr e w ou r a t te n ti on to th e f oll ow i ng de ci si ons i n th i s re ga r d :
1. Un iv er sal C a ble s L td . V s. C IT ( 2 0 20 ) 4 2 0 IT R 11 1 (S C) .
2. UO I V s. T a ta C h e mic al s L td . (2 0 1 4 ) 36 3 IT R 65 8 (S C) .
3. C IT C IT V s. Me ls ta r Inf orma ti on T ec h n ol ogy L td . ( 2 01 9 ) 26 5 T ax m an 5 0 ( Bo m) .
4. Pc. C IT Vs. S ta te B an k of In d ia (2 0 1 9 ) 26 1 T axman 4 0 9 ( bo m) .
5. Aj an ta M an uf ac turin g L td. V s. D C IT ( 2 0 17 ) 39 1 IT R 3 3 ( Gu j) .
6. C IT Vs. L ar se n & T ou bro L td . ( 2 0 1 1) 3 3 0 IT R 34 0 (B om) .
7. C IT V s. S ah ar a In d i a S av in g & In ve stm en t Cor pn . L td. (2 0 1 3 ) 2 1 8 T axman 3 6 3 ( Al l) .
8. C IT Vs. S u jl e j In d us tr ie s L td. ( 20 2 0 ) 3 2 5 IT R 33 1 (D e l ).
6. He f ur the r con ten d e d th a t the d i st in cti on d r a w n b y t he Ld. C I T( A) i n t he ca se of Ta t a C he mic a l Ltd . a n d Aj anta Ma nu fa c tur i ng L t d. w a s i nco rr e ct. The Ld . C oun s e l f or t he a sse sse e ra i se d an oth e r co nte nti on b e f ore us be i ng th a t t he pow e r s of th e Ld .C I T(A ) e n ume r a te d u/s 2 5 1 o f th e Act d i d ITA Nos.1264 to 1267/Chd/2019 & ITA Nos.103 to 106/Chd/2020 A.Ys. 2002-03 to 2005-06 Page 9 of 28 not p e r mit r e s tor a ti on of a ny i ss u e to t he AO a n d , the re f ore , the re stor a ti on of th e i ss ue b y th e Ld .C I T(A ) i n th e p re se nt ca se w a s a g a in st t he p r ovi si on s of l a w a nd , f or thi s r e a s on a ls o th e o rde r of t he Ld .C I T(A ) n e e de d to be se t asi d e .
7. Th e Ld . D R, o n th e o the r h a nd , v e he me n tl y su ppor te d the or de r of the Ld . C I T( A) . Hi s co n te n ti ons i n b r ie f w e re tha t si nc e the a s se s se e h a d o ri gi n a ll y r e t ur ne d th e int e re st on TU F s ub si d y a s i ts i nc ome a nd sta k e d hi s cl a i m f or th e sa me to b e tr e a te d a s n on ta xa b l e , b e i ng ca p i ta l i n na t u r e , on l y i n a pp e a l be fore th e I TA T, th e del a y in re f un d wa s not on a ccou nt of a n y fa u l t of th e De pa r tme n t b ut w a s sq uar e ly a ttr ib u ta b le to the a sse ssee for ma k i ng a d e l a ye d cl a im. H e , the re fo re , c onten de d t ha t t he Ld . C I T( A) , t he re for e , had ri gh tl y in vo ke d th e p r ovi si on s of s e cti on 24 4 A( 2 ) of th e Act by d i r e cti n g the AO t o r e fe r the issu e to the Ld . P r. C I T. I n thi s re ga r d , he re fe r re d a nd r e lie d u p on the f oll ow i ng de ci si ons :
1. Pa l a Ma r ke ti ng C o-op . Soc ie ty Ltd . vs C I T,K otta y a m ( 2 0 1 7 ) 79 ta x ma nn .c o m43 8 ( Ke r a l a )
2. HH A Ta n k Te r mi n a l (P ) Ltd . v s AC I T (2 0 1 9 ) 1 1 2 Ta x ma nn .c o m11 4 (Ke r a la ) .
8. H e f ur the r di s tin gu is he d the de ci si ons r e l ie d u po n by the Ld .C ou ns e l fo r the a sse ssee b e f ore us on fa cts . Th e Ld .
ITA Nos.1264 to 1267/Chd/2019 & ITA Nos.103 to 106/Chd/2020 A.Ys. 2002-03 to 2005-06 Page 10 of 28 DR a l so con te n d ed t ha t si nc e the Ld . C I T( A) h a d di r e cte d t he AO to ma k e a re fe re nce to the P r .C I T f or d e te rmin i ng t he pe r iod to b e e xc lu d e d for p a yme n t of i nt e r e st , the a ss e ss ee ough t t o h a ve w ait e d f or the de ci si on of th e Ld . Pr . C I T be for e fi li n g th e a p pe a l a n d the re fo re the p re se n t a p pe a ls w e re not ma in ta i na b l e .
9. B oth t he p a r tie s fi l e d de ta i le d s ubmi ss ion s be for e u s i n wr i ti ng and a l so c op ie s of va ri ou s ju d gme n ts on wh i ch re li a n ce w a s p la ce d .
10 . W e ha ve c a r e f ully h e a r d b oth t he p a r tie s a t l en gth , ha v e gone thr ough the re le va n t pr ov i si ons o f la w, or de r s of the a u thor i tie s b e l ow a n d a l so th e ca se l a w s re fe r re d to be fore u s.
11 . Th e i ss ue to be a d ju di ca te d re la te s to the e nti tleme nt of in te re st on re fun d, w h i ch i s p r ov id e d u/s 2 44 A of t he Act. Th e p e cu l ia r se t o f fa c ts i n w hi ch t he re f un d a rose i n t he pr e se n t ca se a re on a cco un t of t he Ld . C I T( A) a ll ow i ng a sse sse e 's cl a i m of th e i n te re st on TU F su b s i dy b e i ng tr e a te d a s c a pi ta l i n na t ur e , w h ic h o ri gi n a ll y t h e a sse ssee ha d tr e a te d a s re ve n ue i n n a ture i n cl ud i ng th e sa me i n i ts in come r e tu r ne d fo r ta xa t ion a n d h a d p a i d ta xe s o n the ITA Nos.1264 to 1267/Chd/2019 & ITA Nos.103 to 106/Chd/2020 A.Ys. 2002-03 to 2005-06 Page 11 of 28 sa me a l so. Tha t t he occa s i on f or th e Ld .C I T(A ) to a ll ow th is cl a im a r ose on th e a ss e ssee r a i si ng a d d it ion a l gr ou nd s be fore the I TA T i n q ua n tum pr oc ee d i ng s w h ic h w e re d u ly a dmi tte d by t he I TA T a nd th e re a fte r re s tored to the Ld. C I T( A) for a d j ud i ca t ion wh o a l l ow e d th e cl ai m of t he a sse sse e . Th e r e for e , the re f un d a r ose to the asse ssee on a ccou nt of a c ce p ta nce of a c l a im of no n-ta x a b i l it y of a re ce i p t in a p pe l la te p ro cee d in gs , w hi ch r ece ip t was or igi n a ll y re tur ne d b y it a s ta xa bl e a n d the cl a i m w a s ma d e for th e f i rs t ti me onl y b e for e the se con d a pp e l l ate a uth or it y.
12 . Th e con te nti on of the Re ve n ue in c le a r te r ms i s tha t si nc e the a ss e ssee it se l f d e la ye d ma k in g th e c la i m of tr e a ti ng the i nc ome a s non -ta xa b l e , the de l a y i n re fu nd w as on a c cou nt of t h i s d e l a ye d cl a im ma d e by the a ss e ssee a nd , the re fo re , i t w a s n ot e n ti tle d to i nt e re s t on th e p e r i od of de la y a tt ri b ut a ble to i t. Re fe re nc e ha s b ee n ma d e t o t he pr ov is io ns of s e ct ion 24 4 A( 2 ) of t he Ac t for the s aid p ur p ose . 13 . Th e co nte nti on of th e a s se s se e , on the othe r h a n d is the re i s n o d e l ay a ttr i b uta b l e to the a sse ssee a t all and tha t th e on l y d e la y r e c ogn ize d b y se c ti on 2 44 A (2 ) of th e A ct re la te s t o de l a y in p r oce e d in gs a ttr i bu ta b l e to the a s se s se e .
ITA Nos.1264 to 1267/Chd/2019 & ITA Nos.103 to 106/Chd/2020 A.Ys. 2002-03 to 2005-06 Page 12 of 28 Th a t ma k i ng a d e l a ye d cl a im d oe s no t ta n ta moun t to de la y in g pr ocee di n gs a nd , th e r e for e , se c ti on 2 44 A (2 ) of t he Act i s n ot a pp l ic a b le . Th a t t he a l low a n ce of th e c la i m o f n on ta xa b il i ty of a re ce ip t on ly re cog ni se s the p osi tion o f l a w tha t t he a s se s se e w a s ne ve r re qu ir e d to p a y ta xe s on the se re ce i p ts . A nd h avi n g p a i d ta xe s , t he re fo re , w a s e n ti tle d to re fu nd of t he su r pl u s ta xe s so p a id a n d i n te re st t he re on for th e pe r io d i t re ma in e d wi th t he Re ve nue De pa rt me nt . 14 . S in ce b ot h th e pa r ti e s h a ve a rg ue d the a p p l ic a bi l it y of di f fe re nt su b se c ti ons to se cti on 2 4 4 A, to a dj u d i cat e t he is sue t he re fore it is re le va n t to re p ro du ce the r e le v a nt pr ov is io ns of s e ct ion 24 4 A :
"244A. (1) Where refund of any amount becomes due to the assessee under this Act, he shall, subject to the provisions of this section, be entitled to receive, in addition to the said amount, simple interest thereon calculated in the following manner, namely :--
(a) where the refund is out of any tax collected at source under section 206C or paid by way of advance tax or treated as paid under section 199, during the financial year immediately preceding the assessment year, such interest shall be calculated at the rate of one-half per cent for every month or part of a month comprised in the period,--
(i) from the 1st day of April of the assessment year to the date on which the refund is granted, if the return of income has been furnished on or before the due date specified under sub-section (1) of section 139; or ITA Nos.1264 to 1267/Chd/2019 & ITA Nos.103 to 106/Chd/2020 A.Ys. 2002-03 to 2005-06 Page 13 of 28
(ii) from the date of furnishing of return of income to the date on which the refund is granted, in a case not covered under sub-clause (i);
(aa) where the refund is out of any tax paid under section 140A, such interest shall be calculated at the rate of one-half per cent for every month or part of a month comprised in the period, from the date of furnishing of return of income or payment of tax, whichever is later, to the date on which the refund is granted:
Provided that no interest under clause (a) or clause (aa) shall be payable, if the amount of refund is less than ten per cent of the tax as determined under sub-
section (1) of section 143 or on regular assessment;
(b) in any other case, such interest shall be calculated at the rate of one-half per cent for every month or part of a month comprised in the period or periods from the date or, as the case may be, dates of payment of the tax or penalty to the date on which the refund is granted. Explanation.--For the purposes of this clause, "date of payment of tax or penalty" means the date on and from which the amount of tax or penalty specified in the notice of demand issued under section 156 is paid in excess of such demand. (1A) ........
[(1B) ........
(2) If the proceedings resulting in the refund are delayed for reasons attributable to the assessee [or the deductor, as the case may be,] whether wholly or in part, the period of the delay so attributable to him shall be excluded from the period for which interest is payable under sub-section (1) or (1A) [or (1B)], and where any question arises as to the period to be excluded, it shall be decided by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner whose decision thereon shall be final.
(3) ........
(4) .........
ITA Nos.1264 to 1267/Chd/2019 & ITA Nos.103 to 106/Chd/2020 A.Ys. 2002-03 to 2005-06 Page 14 of 28 15 . Th e p r ovi si on f o r e n ti tle me n t to in te re st on re fund is la i d d ow n i n sub s e cti on ( 1) , a b a re pe r us a l of w h ic h r e ve a ls tha t a ny re fu nd d ue to a n a ss e s see is to b e comp e n sa te d wi th i n te re s t for the e nti re pe r iod f or w h ic h th e sur p l us a moun t r e ma i ns w i th t he S ta te /Go ve r n me n t. Th e Se cti on i s ve r y cle a r a nd the re i s n o a mb i gui ty i n the s a me . All re fu nd s of a d va n ce p a ym e n ts of ta xe s i n t he f or m o f TDS , TCS a n d a dv a nc e s ta xe s pa i d , a r e t o be comp e ns a te d f or t he pe r i od fr om t he fi r st day of a sse s sme n t y e a r to the gr a n t o f re fu nd. Wh i le a l l se l f a sse ss me n t ta xe s o r oth e r ta xe s pa i d a r e to be comp e n sa te d fo r the pe r i od s f r om t he d a te o f fi li n g of r e t ur n of in come or t he d a te of p a yme n t o f t a xe s w hi che ve r i s la te r, to th e gr a n t of r e f un d . Th e on l y ca v e a t or exc e p ti on is pr ov id e d in s ubse cti on ( 2 ), th a t w h e re a ny p r ocee d in gs of re fu nd a re de lay e d b y the a sse ss ee , t hi s pe r iod i s t o be e xcl u de d fr om t he pe r io d for wh i ch in te re st i s to b e pa id . Fu r the r it i s on l y t he Ld . P r . C I T w h o i s e mp ow e re d t o d e c ide the pe r i od o f de la y.
16 . Th u s i t is a bu n d a n tl y cl e a r th at in te re st on re fu nd s gr a nte d i s c omp en sa tor y i n n a tu r e . Th e H on'b l e Ape x C our t ha s c a te g or ic a ll y st a te d so i n th e ca s e of U n i on of I n di a vs ITA Nos.1264 to 1267/Chd/2019 & ITA Nos.103 to 106/Chd/2020 A.Ys. 2002-03 to 2005-06 Page 15 of 28 Ta t a C h e mi ca l s L t d( 2 0 14 ) 4 3 ta x m a nn .c om 2 4 0 ,a t pa ra 3 7 of its or d e r a s un der :
"37.A "tax refund" is a refund of taxes when the tax liability is less than the tax paid. As per the old section an assessee was entitled for payment of interest on the amount of taxes refunded pursuant to an order passed under the Act, including the order passed in an appeal. In the present fact scenario, the deductor/assessee had paid taxes pursuant to a special order passed by the assessing officer/Income Tax Officer. In the appeal filed against the said order the assessee has succeeded and a direction is issued by the appellate authority to refund the tax paid. The amount paid by the resident/ deductor was retained by the Government till a direction was issued by the appellate authority to refund the same. When the said amount is refunded it should carry interest in the matter of course. As held by the Courts while awarding interest, it is a kind of compensation of use and retention of the money collected unauthorizedly by the Department. When the collection is illegal, there is corresponding obligation on the revenue to refund such amount with interest in as much as they have retained and enjoyed the money deposited. Even the Department has understood the object behind insertion of Section 244A, as that, an assessee is entitled to payment of interest for money remaining with the Government which would be refunded. There is no reason to restrict the same to an assessee only without extending the similar benefit to a resident/ deductor who has deducted tax at source and deposited the same before remitting the amount payable to a non-resident/ foreign company."
17. H a vi ng s a id so a n d c omin g to th e fa ct s of th e p re se nt ca se , t he i ssue i n d is p ute i s w h e the r or n ot the a ct of ma ki n g a cl a i m b e l a te d l y b y th e as se sse e re su lti n g i n r e f un d ta nt a moun ts to " d e la y i n p r ocee d in gs re su lti n g i n r e f un d " as me nt ion e d in s ec tio n 2 44 A (2 ) of the A ct for th e pu r po se of ITA Nos.1264 to 1267/Chd/2019 & ITA Nos.103 to 106/Chd/2020 A.Ys. 2002-03 to 2005-06 Page 16 of 28 e xcl u di n g the a for e s a i d pe r iod b y r e fe r r in g t he ma tte r to the Ld. P r . C I T. 18 . I n our vie w , it i s n ot so. An y cl a i m o f th e a ss e ssee a ll ow e d a t a ny sta g e re s ul ti ng i n r e fu nd w he the r in the fi r st a pp e l l a te s ta ge , t he se c ond a p pel l a te s ta ge or e ve n be fore the Ho n'b le H i gh C our t o r Hon 'b l e S up re me C our t, on ly re cog ni se s the posi ti on tha t the a sse sse e wa s ne ve r re q u ire d to p a y ta xe s on th a t p or tio n of th e i nc ome . The e nt ire pr oc e ss e n vi sa ged un d e r l a w , o f a s se s sme n ts a nd a p p e a l s is a co nti n uou s pr oc e ss of a sse ssin g tr ue a nd cor re c t i n come of the a ss e ssee , be gi nn in g w i th th e a s se sse e h i mse l f di sc lo si ng th e s a me i n hi s r e tu rn of i n co me a nd t he sa me the re a fte r be in g scr u ti ni ze d i n a ss e ss me n t a n d th e re a fte r a ny a d ve r se con cl us ion drawn th e re o n be in g ch a l le nge d be fore t he a pp e l l a te a u th or iti e s a nd h ig he r j ud i ci al a uth or it y. Th e e nt ir e p r oce ss, the re f ore , of a s se ssme nt a n d a pp e a ls cul mi na t e s i n the de te rmi n a ti on of tr ue a nd c or r e ct in come on w hi ch th e a s se sse e w as r e q u ire d t o p a y i ts ta xe s. An y c la i m a l l ow e d to the a s se sse e a t a ny st a ge w he the r ma de f or the f i rst ti me or w he ther ta k e n up i n a pp e a l on ly un de r li ne s the pos it ion th a t n o ta xe s we re re q uir e d to be pa i d by t he a s se sse e on th e s a id cl a i m a t a l l . Th e re f ore , i n ITA Nos.1264 to 1267/Chd/2019 & ITA Nos.103 to 106/Chd/2020 A.Ys. 2002-03 to 2005-06 Page 17 of 28 suc h c i rc ums ta n c e s, th e re fu nd ge ne r a te d on a c cou nt of t he sa me , h a vi ng bee n re ta i ne d by the S ta te un la wf ul l y is e nt itle d to be comp e n sa t e d w i th i n te re s t for th e e nt ire pe r iod for w hi ch i t i s s o re ta i ne d.
19 . I t i s t o be re me mb e re d th a t the Sta te i s e n ti tle d to on ly ta xe s due on the cor r e c t ta xa b le i nc ome s a nd i t is the d uty of t he De pa r t me nt to d e te r min e the tr ue a nd c or re ct i n come a nd gu id e th e as se s see in th e pro ce s s. Th e y a r e n ot a n d ca n not b e e nti tled to t a ke the be ne fi t o f the i gn or anc e of t he a sse sse e and col l e ct un d ue taxe s . Th e r e f ore any t a xes mis ta k e nl y p a id a nd u nl a w f ul ly r e ta i ne d b y th e Sta te h ave to b e co mpe ns a ted w ith in te re st on r e f un d . 20 . Th e s itu a ti on e n vi sa ge d in s e ct ion 2 4 4 A( 2 ) of the A ct i s tha t wh e re a ny p r oc ee d i ng s w he re th e c la i m of th e ass e ssee is be in g a d j ud i cate d o r de te r mi ne d , th e a s se s se e re s or ts to me th od s w hi ch d e l a y the p r ocee d in gs t he re b y in cr e a si ng pe r iod f or w hi ch i nt e re s t i s to be gi ve n, I t is such p e r i od wh i ch i s t o b e exc lu de d f or th e p u r po se of ca l cu la t in g t he in te re st. 21 . Th i s vi e w ha s b ee n up he ld i n v a r iou s j ud i ci a l d e c is io ns re lie d up on b y the Ld. C ou ns e l f or th e a sse ssee be f or e us .
ITA Nos.1264 to 1267/Chd/2019 & ITA Nos.103 to 106/Chd/2020 A.Ys. 2002-03 to 2005-06 Page 18 of 28 22 . Th e H on 'b le G uja r a t Hi gh C o ur t in th e ca se o f Aj a nt a Ma nu fa c tur i ng L td .( su p ra ), w hi l e d e a l i ng w ith a n i d e n tic a l is sue w he re in th e a s se s se e ha d r a i se d a be la te d cl ai m by re vi si ng i ts re t urn a n d th e Re ve nue h a d c onte n de d th a t on a ccou nt of the be l a te d c la i m t he re fu nd h a d bee n d e l a ye d a nd th e re fore the a s se s se e w a s n ot e nti tle d t o int e re s t f or the p e ri od o f suc h d e l a y, c a te go rica l l y he ld tha t m e re r a i si ng a b e l a te d cl a i m ca n n ot b e sa i d t o b e re a s ons f or del a yi n g t he pr oc ee d i ng s a tt ri b uta bl e to the asse ssee . I t w e nt o n to h ol d tha t th e a l l ow a nc e of c la i m b y t he a p pe l la te com mis si one r onl y ta n ta mou nt to a l lo wi n g a cl a im i n l a w w h i ch w as a ll ow a b le b y th e As se s si ng O f fi ce r. Th e H on'b l e H ig h C our t he l d th a t it is onl y w h e re th e a s se s se e i s r e s po ns ib l e f or de la y in g t he a sses sme n t o r a p p e lla te p r oce e d i ngs th a t wo ul d ta nt a moun t to d e la y in p r ocee d ings re su lt in g i n re fu nd . The re le va n t f i nd i ng s a t p a r a 16 -1 7 o f the o rde r a re a s un d e r ;
"16. We would also examine the order of the Commissioner on merits. As noted, according to the Commissioner the assessee had raised a belated claim during the course of the assessment proceedings which resulted into delay in granting of refund and therefore, the assessee was not entitled to interest for the entire period from the first date of assessment year till the order giving effect to the appellate order was passed. We cannot uphold the view of the Commissioner. First and foremost requirement of sub-section (2) of Section 244A is that the proceedings resulting into refund should have been delayed for the reasons attributable to the assessee, whether wholly or in part. If such requirement is ITA Nos.1264 to 1267/Chd/2019 & ITA Nos.103 to 106/Chd/2020 A.Ys. 2002-03 to 2005-06 Page 19 of 28 satisfied, to the extent of the period of delay so attributable to the assessee, he would be disentitled to claim interest on refund. The act of revising a return or raising a claim during the course of the assessment proceedings cannot be said to be the reasons for delaying the proceedings which can be attributable to the assessee. Mere fact that the claim came to be granted by the Appellate Commissioner, would not change this position. In essence, what the Commissioner (Appeals) did was to allow a claim which in law, in his opinion, was allowable by the Assessing Officer. In other words, by passing order in appeal, he merely recognized a legal position whereby, the assessee was entitled to claim certain benefits of reduced tax. Surely, the fact that the assessee had filed the appeal which ultimately came to be allowed by the Commissioner, cannot be a reason for delaying the proceedings which can be attributed to the assessee.
17. The Department does not contend that the assessee had needlessly or frivolously delayed the assessment proceedings at the original or appellate stage. In absence of any such foundation, mere fact that the assessee made a claim during the course of the assessment proceedings which was allowed at the appellate stage would not ipso facto imply that the assessee was responsible for causing the delay in the proceedings resulting into refund. We may refer the decision of the Kerala High Court in case of Commissioner of Income- Tax V/s. South Indian Bank Ltd., reported in (2012) 340 ITR (Ker) in which the assessee had raised a belated claim for deduction which was allowed by the Commissioner (Appeals).
The Revenue, therefore, contended that for such delay, interest should be declined under Section 244A of the Act. In the said case also, the assessee had not made any claim for deduction of provision of bad debts in the original return. But before completion of the assessment, the assessee had made such a claim which was rejected by the Assessing Officer. The Commissioner allowed the claim and remanded the matter to the Assessing Officer. Pursuant to which, the assessee became entitled to refund. Revenue argued that the assessee would not be entitled to interest in view of Section 244A(2). In this context, the Court held in Para.6 as under :
"6. Sub-section (2) of section 244A provides that the assessee shall not be entitled to interest for the period of delay in issuing the proceedings leading to the refund that is attributable to the assessee. In other ITA Nos.1264 to 1267/Chd/2019 & ITA Nos.103 to 106/Chd/2020 A.Ys. 2002-03 to 2005-06 Page 20 of 28 words, if the issue of the refund order is delayed for any period attributable to the assessee, then the assessee shall not be entitled to interest for such period. This is of course an exception to clauses (a) and
(b) of section 244A(1) of the Act. In other words, if the issue of the proceedings, that is, refund order, is delayed for any period attributable to the assessee, then the assessee is not entitled to interest of such period. Further, what is clear from sub-section (2) is that, if the officer feels that delay in refund for any period is attributable to the assessee, the matter should be referred to the Commissioner or Chief Commissioner or any other notified person for deciding the issue and ordering exclusion of such periods for the purpose of granting interest to the assessee under section 244a(1) of the Act. In this case, there was no decision by the Commissioner or Chief Commissioner on this issue and so much so, we do not think the Assessing Officer made out the case of delay in refund for any period attributable to the assessee disentitling for interest. So much so, in our view, the officer has no escape from granting interest to the assessee in terms of section 244A(1)(a) of the Act."
18. Under the circumstances, impugned orders dated 18.2.2016 and 16.3.2016 passed by the Commissioner of Income-Tax and Assessing Officer respectively and the demand notice dated 16.3.2016 are quashed. Petitions are disposed of accordingly."
23 . F ol low i ng thi s dec i si on th e H on 'b le B o mba y hi gh cou rt in t he ca se of C I T-8 vs Me ls ta r I nf or ma ti on Te c hn ol ogi e s Ltd . ( su p r a ) he l d th e re w a s no de la y a tt ri b uta bl e to t he a sse sse e w he re in th e fa c ts b e f ore it t he c la i m for an e xpe n d itu re w a s ma d e f or the fi r st time be fore the Tri b un a l wh o i n tu rn h a d r e ma n de d the ma tt e r to the CI T( A) w h o h a d a ll ow e d t he cl a im r e s ul ti ng in r e f un d to the a s se s se e . The Hon 'b l e H i gh C o ur t he l d tha t th e re w a s no thi n g t o s ugg e st ITA Nos.1264 to 1267/Chd/2019 & ITA Nos.103 to 106/Chd/2020 A.Ys. 2002-03 to 2005-06 Page 21 of 28 tha t a ny of th e p r oc ee d i ng s, be for e t he I TA T or th e C I T( A) we re i n a n y ma n ne r de la ye d b y th e a s se s se e . Th a t th e re fore se c tio n 2 4 4 A( 2) w a s n ot a p p l ic a ble . Th e re le v a nt fi nd i ngs of the H on' ble H igh C our t a t p a r a 4 -8 of the or de r a re a s un de r :
"4.The facts on record would show that the assessee had not claimed certain expenditure before the Assessing Officer but eventually raised such a claim before the Tribunal. Upon which, the Tribunal remanded the proceedings to the CIT(A). As such stage, the additional benefit claimed by the assessee was granted. This resulted in refund and the question of payment of interest on such refund.
5. As is well known, in case of refunds payable to the assessee, interest in terms of sub-section (1) of Section 244A would be payable. Sub-section (2) of Section 244A, however, provides that if the proceedings resulting in the refund are delayed for reasons attributable to the assessee whether wholly or in part, the period of delay so attributable, would be excluded from the period for which interest is payable under sub-section (1) of Section 244A of the Act.
6. The Tribunal in the present case came to the conclusion that the delay cannot be attributed to the assessee and therefore, directed payment of interest.
7. Sub-section (2) of Section 244A of the Act refers to the proceedings resulting in the refund which are delayed for the reasons attributable to the assessee. There is no allegation or material on record to suggest that any of the proceedings hit the assessee's appeal before the Tribunal or remanded the proceedings before the CIT(A) whether in any manner delayed on accounts of the reasons attributable to the assessee. The Tribunal, was, therefore correct in allowing the interest to the assessee.
8. We may notice that in the case of Ajanta Manufacturing Ltd Vs. Deputy CIT (Guj) [2017] 391 ITR 33 (Guj) the Division Bench of Gujarat High Court had occasion to consider a similar issue. The assessee had made a belated claim during ITA Nos.1264 to 1267/Chd/2019 & ITA Nos.103 to 106/Chd/2020 A.Ys. 2002-03 to 2005-06 Page 22 of 28 assessment of filing revised return. According to the Revenue, this would entitle the assessee for claim of interest to the extent of delay. Provisions of sub-rule (2) of Section 244A of the Act were sought to be pressed in service. The Court made following observations:
"16. We would also examine the order of the Commissioner on merits. As noted, according to the Commissioner the assessee had raised a belated claim during the course of the assessment proceedings which resulted into delay in granting of refund and therefore, the assessee was not entitled to interest for the entire period from the first date of assessment year till the order giving effect to the appellate order was passed. We cannot uphold the view of the Commissioner. First and foremost requirement of sub-section (2) of Section 244A is that the proceedings resulting into refund should have been delayed for the reasons attributable to the assessee, whether wholly or in part. If such requirement is satisfied, to the extent of the period of delay so attributable to the assessee, he would be disentitled to claim interest on refund. The act of revising a return or raising a claim during the course of the assessment proceedings cannot be said to be the reasons for delaying the proceedings which can be attributable to the assessee. Mere fact that the claim came to be granted by the Appellate Commissioner, would not change this position. In essence, what the Commissioner (Appeals) did was to allow a claim which in law, in his opinion, was allowable by the Assessing Officer. In other words, by passing order in appeal, he merely recognized a legal position whereby, the assessee was entitled to claim certain benefits of reduced tax. Surely, the fact that the assessee had filed the appeal which ultimately came to be allowed by the Commissioner, cannot be a reason for delaying the proceedings which can be attributed to the assessee.
17. The Department does not contend that the assessee had needlessly or frivolously delayed the assessment proceedings at the original or appellate stage. In absence of any such foundation, mere fact that the assessee made a claim during the course of the assessment proceedings which was allowed at the appellate stage would not ipso facto imply that the ITA Nos.1264 to 1267/Chd/2019 & ITA Nos.103 to 106/Chd/2020 A.Ys. 2002-03 to 2005-06 Page 23 of 28 assessee was responsible for causing the delay in the proceedings resulting into refund. We may refer the decision of the Kerala High Court in case of CIT Vs. South Indian Bank Ltd., reported in (2012) 340 ITR 574 (Ker) in which the assessee had raised a belated claim for deduction which was allowed by the Commissioner (Appeals). The Revenue, therefore, contended that for such delay, interest should be declined under Section 244A of the Act. In the said case also, the assessee had not made any claim for deduction of provision of bad debts in the original return. But before completion of the assessment, the assessee had made such a claim which was rejected by the Assessing Officer. The Commissioner allowed the claim and remanded the matter to the Assessing Officer. Pursuant to which, the assessee became entitled to refund. Revenue argued that the assessee would not be entitled to interest in view of Section 244A(2). In this context, the Court held in Para. 6 as under (page 578 of 340 ITR):
"6. Sub-section (2) of section 244A provides that the assessee shall not be entitled to interest for the period of delay in issuing the proceedings leading to the refund that is attributable to the assessee. In other words, if the issue of the refund order is delayed for any period attributable to the assessee, then the assessee shall not be entitled to interest for such period. This is of course an exception to clauses (a) and
(b) of section 244A(1) of the Act. In other words, if the issue of the proceedings, that is, refund order, is delayed for any period attributable to the assessee, then the assessee is not entitled to interest of such period. Further, what is clear from sub-section (2) is that, if the officer feels that delay in refund for any period is attributable to the assessee, the matter should be referred to the Commissioner or Chief Commissioner or any other notified person for deciding the issue and ordering exclusion of such periods for the purpose of granting interest to the assessee under section 244A(1) of the Act. In this case, there was no decision by the Commissioner or Chief Commissioner on this issue and so much so, we ITA Nos.1264 to 1267/Chd/2019 & ITA Nos.103 to 106/Chd/2020 A.Ys. 2002-03 to 2005-06 Page 24 of 28 do not think the Assessing Officer made out the case of delay in refund for any period attributable to the assessee disentitling for interest. So much so, in our view, the officer has no escape from granting interest to the assessee in terms of section 244A(1)(a) of the Act."
9. In the result, no question of law arises. The appeal is dismissed."
24 . In the ca se of C he ta n N. Sh a h vs . M. K. M og he C om mis si on e r of I n come Ta x ( 2 0 1 5 ) 5 3 ta x ma n n .c om 1 8 , t he Hon 'b l e B o mba y h ig h cou rt h e l d th a t t he re i s no p r ovi si on for re je cti n g the cl a i m of i nt e r e s t on a c cou nt of a mis ta k e by the a sse ssee . Th a t su ch a p r op osi ti on w ou l d r e nde r the se c tio n oti ose s in ce e xce ss ta xe s p a id or ig in a te on a c cou nt of s ome mi sta k e e ithe r on fa c t or la w on th e pa r t of t he a sse sse e . Tha t i t i s on ly d e la y i n di sp os a l o f p r oce e d in gs re su lti n g i n re fund a tt ri b ut a bl e to th e a s se s se e w h ic h a re not to be c omp e ns a te d w ith i n ter e s t. The r e l e v ant f in d in gs a t p a r a 13 a r e a s un de r:
"13. The Assessing Officer has been given no discretion in the matter of granting interest. The amount of interest has to be paid to an assessee in terms of Section 244A of the Act. The only limitation provided therein under Section 244A of the Act is under sub-section 2 thereof which mandates that where any refund results to an assessee, while computing the interest payable thereon, the delay which is attributable to the assessee, in obtaining the refund would be excluded. The Act itself does not provide for rejecting the claim for interest on account of a mistake committed by an assessee. If such a proposition is to be accepted then all excess amounts of tax paid by the assessee on account of a mistake would stand ITA Nos.1264 to 1267/Chd/2019 & ITA Nos.103 to 106/Chd/2020 A.Ys. 2002-03 to 2005-06 Page 25 of 28 rejected rendering Section 244A of the Act otiose. Section 244A of the Act provides for interest on refunds in respect of any amount which has been paid in excess to that otherwise payable under the law. In most cases the excess amount paid as tax would originate on account of some mistake either on fact or of law on the part of the assessee. Advisedly the Act does not empower the authorities to reject a claim for interest on account of a mistake committed by the assessee."
25 . Th e d e la y e d c la i m of th e a sse ssee the re f ore ca n no t be sa i d t o ta n ta mo un t to de la y in p r oce e d in gs resu l tin g i n re fu nd a ttr i bu ta bl e t o t he a sse s see .
26 . Th e ca s e laws r e lie d u po n by the Ld .D R a re di st in gu is ha b l e on f a cts . I n t he c a se of P a l a Ma r ke ti ng C o- op Soc ie ty ( su p ra ) th e re tur n of in come i tse l f ha d b ee n f i le d be la te d ly a n d h a d b ee n r e je cte d bu t t he re a fte r on l y w h e n the ma tte r w e n t up to the Ho n'b le H ig h C ou rt t he d e l a y w a s con do ne d a n d th e re t ur n a cce pte d . I n suc h c i rcums ta nc e s the C ou rt h e l d th a t th e con do na ti on of d e l a y wa s on ly f or the p ur p ose of acc e p ti ng re tu rn a nd th a t ot he rw ise i t co ul d not b e sa i d t ha t d e la y w a s not a ttr i bu ta b l e to the a s se s se e . Th e H on'b l e Hi gh cou rt i n th is b a ck d r op o f fa c ts he ld tha t li a b il i ty t o p a y i nt e re s t on re f un d a r is e s f r om th e da t e w hen the cl a im f or r e fun d i s ma d e wi th a ll n e ce ss a ry p a rt ic ul a r s. Th e s a me c a nn ot b e e q ua te d w it h a s it ua ti on w he re the re i s ITA Nos.1264 to 1267/Chd/2019 & ITA Nos.103 to 106/Chd/2020 A.Ys. 2002-03 to 2005-06 Page 26 of 28 no de la y i n fi li n g r e tur n of i nc ome b u t i t i s onl y a l e gi ti ma te cl a im w hi ch i s cl a i me d a n d a l l ow ed i n a p p e l l a te pro cee di n gs. 27 . I n t he ca s e o f HH A Ta nk Te r mi n a l( P ) (l td ) ( su pr a ) t he a sse sse e ha d a lr e a d y be e n gr a n te d re f un d on p r oc e ss in g of its re tur n u/s 14 3 ( 1) of t he A ct a n d sub s e q ue nt ly i t h a d fi le d a re v ise d r e t ur n cl a imi n g f ur th e r re f und . In thi s ba c k dr op of fa c ts t he H on 'b le cou r t he ld th a t t he l a te r re fu nd cou ld only r e l a te b a ck t o the f il i ng of re v ised r e tur n . 28 . I n vie w of t he ab ov e , we ha ve no h e s ita t ion in ho ld i ng tha t th e a s se sse e wa s e nti tle d to i nt e re s t on t he re f und ge ne r a te d f or t he e nti re pe r i od of d e l a y a s e n vi sag e d u nde r the p r ovi si on s of se cti on 2 4 4A ( 1) (b ) of th e A ct th at t he re w a s no de la y a ttr i b uta b l e to t he a sse ssee i n t he p roce e d in gs re su lti n g in re f un d a nd , t he re fore , the p r ovi si on s of se c tion 24 4 A( 2 ) of th e A ct w e re n ot a ttr a ct e d i n the p rese nt ca se . Th e or de r of th e Ld . C I T( A) h old i ng so i s h e l d to be n ot i n a ccor d a n ce w i th l a w.
29 . As for th e a r gu me n t of t he a sse sse e th a t the Ld .C IT( A ) ha d n o pow e r to r e st ore t he ma tte r to th e A O , we do not f in d a ny me r i t i n th e sa me s in ce the Ld . C I T( A) h a s on ly g iv e n a di r e c tio n to the AO to r e fe r the ma tt e r t o t he Ld . Pr . C I T, ITA Nos.1264 to 1267/Chd/2019 & ITA Nos.103 to 106/Chd/2020 A.Ys. 2002-03 to 2005-06 Page 27 of 28 wh i ch s ur e l y d oes n ot ta n ta mou n t to r e s tor i ng the i ss ue to the AO . Thi s a r g ume n t of th e Ld . C oun se l for t he a sse ssee is the re fo re d i smi ss e d .
30 . Th e con te nti on of the Ld .D R th a t s in ce the Ld .CI T(A ) ha d no t a dj u di ca t e d the is sue , h a vi n g d ir e c te d th e A O to re fe r the ma tte r to th e Ld . Pr . C I T, no a ppe a l l a y a ga in st thi s or de r , we d o n ot f i nd a n y me r i t in th e s a me . Th e l i mite d scop e of the po we r w i th the Ld . Pr . C I T, a s p e r s ub s e ct ion ( 2 ) of se c tio n 24 4A, is de te r mi na t io n of pe ri od of de lay a ttr ib u ta b le to th e a sse s see . He h a s n o p ow e r to d e c ide the e nt itle me nt of gr a n t of r e fu nd . Th e d i re ct ion o f the Ld .C I T(A ) to th e AO to ma k e a re fe re n ce i s onl y to th i s l i mit e d e x te n t, wh i ch a r i se s a nd cou ld ha v e a r ise n onl y w hi le hol d in g t he a sse sse e n ot e nti tl e d to g r a nt o f i nt e re st for t he e nt ire pe r iod of de l a y. I t i s th is o rde r of t he Ld .C I T(A ) w hi ch ha s be e n c ha l le n ge d be fore u s. Th e a r gume nt of the Ld . DR the re fo re th a t the or de r of the Ld . C I T( A) c oul d n ot ha v e be e n cha ll e n ge d is cle a r ly de voi d of a ny me r i ts a nd is th us di smi ss e d .
31 . In t he re s ul t, th e a ppe a ls of t he a sse ssee in I TA N os. 1 26 4 to 1 2 67 /C hd /2 0 19 a r e a ll ow e d a n d the a p pe a ls of ITA Nos.1264 to 1267/Chd/2019 & ITA Nos.103 to 106/Chd/2020 A.Ys. 2002-03 to 2005-06 Page 28 of 28 the a sse s see i n ITA N os. 1 03 to 1 0 6 /C hd /2 0 20 a re d i smi sse d a s n on -ma i nta i n a bl e .
O r de r p r on oun ce d on 3 0 t h Jul y, 20 2 1 .
Sd/- Sd/-
(R.L. NEGI) (ANNAPURNA GUPTA)
याय क सद य/Judicial Member लेखा सद य/Accountant Member
Dated: 30th July, 2021
*रती*
आदे शक! त,ल-पअ.े-षत/ Copy of the order forwarded to :
1. अपीलाथ / The Appellant
2. यथ / The Respondent
3. आयकरआयु/त/ CIT
4. आयकरआयु/त (अपील)/ The CIT(A)
5. -वभागीय त न2ध, आयकरअपील&यआ2धकरण, च4डीगढ़/ DR, ITAT, CHANDIGARH
6. गाड फाईल/ Guard File आदे शानस ु ार/ By order, सहायकपंजीकार/ Assistant Registrar