2017 (10) TMI 179 - HC - Income Tax

Income Tax Appeal Decision Upheld: Precedent & Consistency Key

The Commissioner of Income Tax 7, Mumbai Versus M/s. P.N. Writer & Co. Pvt. Ltd.,

The High Court upheld the Income Tax Appellate Tribunal's decision for the assessment year 2008-2009, regarding the addition under Section 14A read with ... Interest payable u/s 244A(1)(b) on refund of excess amount – Excess amount paid on self-assessment - Held that:- When there is a self-assessment and tax is paid in terms of such self-assessment, the obligation to award interest does not arise. We do not think that it would be fair for the Revenue to demonstrate to us that the Division Bench judgment of this Court in Stock Holding Corporation of India Limited (2014 (11) TMI 899 - BOMBAY HIGH COURT), which discusses all these questions and answers them against the Revenue and in favour of the assessee, should be brushed aside or ignored. It is not shown to be per incuriam, nor is it demonstrated that this judgment has not been accepted by the Revenue, and therefore, challenged in the Hon'ble Supreme Court of India and that challenge is pending or this judgment has been reversed. In the absence of such material on record, we do not think that the Division Bench judgment, which discusses all the questions and which are identical to the present case, should be discarded in this manner. Division Bench judgment of this Court in Stock Holding Corporation of India Limited (supra), we answer each of these questions against the Revenue and in favour of the assessee Issues:Challenge to the order passed by the Income Tax Appellate Tribunal for the assessment year 2008-2009. Interpretation of Section 14A read with Rule 8D for addition in assessment. Disallowance reduction by the Commissioner of Income Tax (Appeals). Granting of interest under Section 244A on self-assessment tax payment. Application of judgments by the Tribunal. Reference to conflicting judgments by the High Court and the Supreme Court. Interpretation of Section 140A in relation to interest award on self-assessment tax payment.Analysis:The High Court heard an Appeal challenging the Income Tax Appellate Tribunal's order for the assessment year 2008-2009. The main contention was the addition made under Section 14A read with Rule 8D, based on past assessment years' practices. The Commissioner of Income Tax (Appeals) reduced the disallowance, which was further contested by the assessee for interest under Section 244A on a self-assessment tax payment of Rs. 4.50 crores made in July 2008. The Tribunal upheld the Commissioner's decision regarding Section 14A and Rule 8D, and also ruled in favor of the assessee for interest payment as the tax was already paid under self-assessment.The Tribunal referred to judgments from the Karnataka High Court and the Delhi High Court to support its decision on interest payment under Section 244A. However, the appellant cited a subsequent High Court judgment that disagreed with the Delhi High Court's decision. The matter was then taken to the Supreme Court for further clarification. The appellant argued that the remand to the Delhi High Court did not cover the specific provision under Section 140A invoked in the present case for interest award on self-assessment tax payment.The High Court emphasized the importance of following judicial discipline and precedent, particularly a Division Bench judgment that favored the assessee in a similar case. The Court held that the questions raised were not substantial questions of law and dismissed the Appeal, ruling in favor of the assessee. The judgment highlighted the necessity of adhering to established legal principles and applying them consistently in similar cases.