2022 (3) TMI 378 - AT - Income Tax

Tribunal denies Assessee's appeal for interest on interest under Section 244A.

The Tribunal dismissed the Assessee's appeal, ruling it maintainable before the CIT(A). The Assessee's claim for interest on interest under Section 244A ... Entitlement of interest on the belated payment of interest as per section 244A - HELD THAT:- We find that, there is no dispute that the Assessee was due and entitled for grant of interest for the period 01/04/2003 to 24/03/2003 (36 months), which has been directed to be granted to the Assessee by this Tribunal [2018 (1) TMI 86 - ITAT DELHI] In compliance with the above direction of the Tribunal, the AO has granted interest w.e.f 01/04/2003 to 24/03/2006 to the assessee on 04- 05-2018 u/s. 244A at the rate of 6% p.a - AO has fully complied with directions of the Tribunal issued and there was no direction to compute interest on the interest or to pay compensation on account of belated payment of the interest as claimed by the Assessee in the present Appeal. AO had complied with the direction of the Tribunal in toto, therefore we cannot find fault with the Order passed by the AO. Tribunal vide Order [2019 (11) TMI 86 - ITAT DELHI] specifically directed AO to compute the interest on late payment of the interest, but in the Order dated 29-12-2017 [2018 (1) TMI 86 - ITAT DELHI] the Tribunal has directed the AO to “grant interest to the Assessee under Section 244A of the Income Tax Act w.e.f. 01/04/2003 to 24/03/2006”. There was no direction to pay either interest on interest or to pay composition for late payment of interest and the said Order of the Tribunal reached finality. Therefore the Order of the Tribunal in Assessee’s own case [2018 (1) TMI 86 - ITAT DELHI] is not applicable to the facts and circumstances of the present Appeal. - Decided against assessee Issues Involved:1. Maintainability of the appeal filed by the Assessee before the CIT(A).2. Entitlement of the Assessee to interest for delayed payment of interest (Compensation/interest on interest) under Section 244A of the Income Tax Act.Issue-wise Detailed Analysis:1. Maintainability of the Appeal:The Assessee contended that the appeal before the CIT(A) was maintainable, relying on the decision of the Hon'ble Supreme Court in the case of Central Provisions Manganesa Ore Co. Ltd. The Tribunal found substance in this contention, holding that the order giving effect to the Tribunal's directions is in the nature of an order under Section 143(3) of the Act, which is appealable under Section 246(1) of the Act before the CIT(A). Thus, the Tribunal concluded that the appeal filed by the Assessee before the CIT(A) was maintainable.2. Entitlement to Interest for Delayed Payment of Interest:The Assessee argued that the AO did not grant interest as per the Tribunal's directions in ITA No. 5172/Del/2014 and claimed entitlement to interest on the belated payment of interest under Section 244A of the Act. The Assessee provided calculations showing interest on the refund amount of Rs. 93,44,160/- for the period from 01-06-2013 to 04-05-2018 at a rate of 0.5%, amounting to Rs. 28,03,248/-. The Assessee also relied on CBDT Circular No. 549 dated 31.10.1989 and several judgments, including its own case for the assessment years 2005-06 and 2009-10.The Revenue contended that the AO had fully complied with the Tribunal's directions by granting interest under Section 244A for the period from 01.04.2003 to 24.03.2006, amounting to Rs. 93,44,160/-. The Revenue argued that the Tribunal's order did not direct the AO to grant interest on interest or compensation for belated payment of interest, and Section 244A does not provide for such interest on interest.The Tribunal noted that the Assessee was due for interest for the period from 01/04/2003 to 24/03/2006, as directed by the Tribunal in ITA No. 5172/Del./2014. The AO had complied with this direction by granting interest on 04-05-2018. The Tribunal found no direction in the previous order to compute interest on interest or to pay compensation for late payment of interest. The Assessee had not challenged the previous order, which had attained finality. Therefore, the Tribunal held that the AO's compliance with the directions was correct, and the Assessee's claim for interest on interest was not justified.The Tribunal also distinguished the present case from the Assessee's own case in ITA No. 5221 & 5222/Del/2016, where the Tribunal had specifically directed the AO to compute interest on late payment of interest. In the present case, there was no such direction in the previous order.Conclusion:The Tribunal dismissed the appeal of the Assessee, holding that the appeal before the CIT(A) was maintainable, but the Assessee was not entitled to interest on interest for the delayed payment of interest under Section 244A of the Act. The order was pronounced in the Open Court on 07th March 2022.