2003 (3) TMI 285 - AT - Income Tax

Tribunal denies interest on self-assessment tax under Income-tax Act

The Tribunal dismissed the appeal for both assessment years 1994-95 and 1995-96, holding that self-assessment tax was not eligible for interest under ... Refund Issues involved:- Entitlement to interest on self-assessment tax under section 244A of the Income-tax Act for assessment years 1994-95 and 1995-96.Assessment year 1994-95:The issue revolved around the entitlement of the assessee to interest on self-assessment tax paid, which became refundable under section 143(3)/250 as per the provisions of the Income-tax Act. The Assessing Officer granted interest on the self-assessment tax from 1-4-1997 to June 1997, whereas the assessee claimed it should have been granted from 20-11-1994, the date of payment. The first appellate authority held that self-assessment tax was not covered under section 244A(1)(b) and only post-assessment demands were eligible for interest. The assessee argued that interest should be granted from the date of payment, citing various case laws and the spirit behind the insertion of section 244A. The Tribunal analyzed the provisions of section 244A(1)(b) and the Explanation, concluding that self-assessment tax was not covered under this clause. The Tribunal emphasized that equity or hardship is not relevant in tax law interpretation, citing relevant case laws. The Tribunal also addressed the role of the Explanation in interpreting the statute and distinguished various case laws cited by both parties. Ultimately, the Tribunal dismissed the appeal for this year.Assessment year 1995-96:The facts for this year were similar to the previous year, with the only distinction being the return processed under section 143(1)(a). Both parties agreed that the decision for the assessment year 1994-95 would be applicable here as well. The Tribunal upheld the order of the Commissioner (Appeals) for this year too, dismissing the appeal. The Tribunal reiterated that the method of assessment under section 143(3) or issuance of intimation under section 143(1)(a) did not alter the situation regarding the entitlement to interest under section 244A.In conclusion, the Tribunal analyzed the provisions of section 244A, the Explanation, and relevant case laws to determine the entitlement to interest on self-assessment tax. The decision emphasized the statutory interpretation and applicability of the law in dismissing the appeals for both assessment years.