Tribunal corrects interest calculation error, directs AO to recalculate refund interest without reduction.

The Tribunal allowed the appeals of the assessee for various assessment years, directing the Assessing Officer to recalculate interest under Section 244A without reducing the interest from the refund due. The Tribunal found the AO's method of reducing total refund, including interest under Section 244A, from the tax refund to be incorrect, leading to a lower interest amount for the assessee. The CIT(A)'s decision was set aside for lack of assessing the correctness of the AO's method, emphasizing the erroneous calculation that resulted in a decreased entitlement for the assessee.

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Issues:
Appeals filed by assessee against CIT(A) order for assessment years 1991-92, 1997-98, 1999-2000, 2007-08 & 2008-09 regarding computation of interest under Section 244A of the Income Tax Act, 1961.

Analysis:
The common issue in all appeals concerns the method of calculating interest under Section 244A. The grievance of the assessee is that the AO computed interest by reducing the refund (including interest already granted) from the tax refund due, resulting in a lower interest amount than entitled to. The AR argued that the refund granted should be reduced from tax and interest separately, citing sec 244A(3) and a decision by ITAT - Mumbai in a similar case. The AR referred to a previous case where the Tribunal restored the matter to the AO for recalculating interest without reducing the interest u/s 244A from the refund due. The DR argued against granting interest on interest, citing relevant case laws.

The Tribunal considered the method adopted by the AO for interest calculation under Section 244A. It was observed that the AO reduced the total refund granted, including interest u/s 244A, from the tax refund due, leading to a lower interest amount. The Tribunal agreed with the AR that only the refund already granted should be reduced, not the interest on such refund. Referring to a previous case, the Tribunal concluded that the AO's method resulted in a reduction of interest payable to the assessee, which was incorrect. The Tribunal directed the AO to calculate interest without reducing the interest u/s 244A from the refund due.

The Tribunal found that the CIT(A) did not assess the correctness of the AO's method but upheld it based on consistency. Therefore, the Tribunal set aside the CIT(A)'s decision and directed the AO to recalculate interest without reducing the interest u/s 244A from the refund due. The Tribunal referred to relevant case laws and emphasized that the interest calculation method adopted by the AO was erroneous, resulting in a lower entitlement for the assessee. Consequently, all appeals of the assessee for different assessment years were allowed for statistical purposes.

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