Appeal Partially Granted: Interest Calculation Date & Delayed Refund Interest

The tribunal partly allowed the appeal, ruling that interest for the appellant should be calculated from the date of the assessment order for Issue 1, in line with the Supreme Court's decision. Additionally, the tribunal granted interest for the delayed refund amount post ITAT's order for Issue 2, citing statutory provisions and case laws.

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Issues:
1. Calculation of interest due to the appellant from the date of payment of tax up to the date of assessment order.
2. Calculation of interest due to the appellant on the amount of refund granted based on ITAT's order.

Issue 1:
The appeal was filed by the assessee against the order passed by CIT(A)-XXXI, Mumbai regarding the interest due to the appellant from the date of payment of tax up to the date of the assessment order. The assessee contended that interest should be allowed from 1-4-1984 till the date of the assessment order, challenging the CIT(A)'s decision based on the Supreme Court's ruling in the case of Modi Industries Ltd. The Supreme Court held that advance tax and TDS are treated as payment of income tax from the date of the assessment order, not from the date of payment. The tribunal upheld this decision, stating that Section 244A, applicable from A.Y. 1989-1990, was not relevant for A.Y. 1984-1985. The argument that a later Supreme Court judgment diluted the earlier ruling was dismissed, as the latter case dealt with withholding refunds without legal sanction.

Issue 2:
Regarding the interest on the amount of refund based on ITAT's order, the tribunal found that the delay in granting the refund after the ITAT's order violated statutory provisions. The tribunal referred to Section 240, stating that the AO must refund the amount due to the assessee as a result of an appellate order without the assessee's claim. Sections 244(1) and 244(2) specify a three-month limit for refund after the order, which was not adhered to in this case. The assessee was entitled to interest on the refund from the date of the regular order to the date of the refund and also for the delay in granting the refund post ITAT's order. Citing various case laws and a CBDT circular, the tribunal allowed the assessee's appeal on this ground, granting interest for the delayed refund amount.

In conclusion, the tribunal partly allowed the appeal of the assessee, upholding the interest calculation from the date of the assessment order for Issue 1 and granting interest for the delayed refund amount post ITAT's order for Issue 2.

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