Tribunal Allows Assessee's Appeals on Interest Calculation

The Tribunal allowed the assessee's appeals for the assessment years 1997-98, 2001-02, 2002-03, and 2003-04. The Tribunal held that interest on the amount of interest due under section 244A was not permissible, following the Supreme Court's ruling in CIT v/s Gujarat Fluoro Chemicals. The orders of the Commissioner (Appeals) were set aside, directing the Assessing Officer to compute allowable interest under section 244A in line with the Supreme Court's judgment. The appeals were treated as allowed for statistical purposes.

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Issues:
- Appeals challenging orders of Commissioner (Appeals) for assessment years 1997-98, 2001-02, 2002-03, and 2003-04.
- Entitlement to interest on the amount of interest due under section 244A.

Analysis:

1. Common Issue in Appeals:
The appeals were filed challenging separate orders of the Commissioner (Appeals) for various assessment years. The common issue across all appeals was the entitlement of the assessee to interest on the amount of interest due under section 244A. The appeals were consolidated due to the common issue arising from identical facts and circumstances.

2. Contention of the Assessee:
The Senior Counsel representing the assessee argued that interest on interest should be granted as the correct amount of interest on refund was not provided on time. He referred to previous High Court decisions favoring the assessee but acknowledged a recent Supreme Court decision clarifying that only interest provided under the statute could be claimed, not interest on statutory interest. The Departmental Representative also agreed with this interpretation.

3. Decision of the Tribunal:
After considering the Supreme Court's ruling in CIT v/s Gujarat Fluoro Chemicals, the Tribunal held that section 244A only allows interest on refunds under specific circumstances, and no interest on such interest can be claimed. The Tribunal set aside the orders of the Commissioner (Appeals) for the relevant assessment years and directed the Assessing Officer to compute the allowable interest under section 244A in accordance with the Supreme Court's judgment. The appeals were treated as allowed for statistical purposes.

4. Outcome:
As a result of the Tribunal's decision, the assessee's appeals for the assessment years 1997-98, 2001-02, 2002-03, and 2003-04 were allowed for statistical purposes. The judgment was pronounced in open court on 15th May 2014.

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