TaxTMI 
TaxTMI 
2013 (6) TMI 41
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....icer, the petitioner is entitled to get refund of the excess tax deposited for all these three assessment years. The orders of the Tribunal for the assessment years 1992-93, 1993-94 and 1994-95 all have become final and the following amounts of refund have become due : Assessment Year Amount Rs. 1992-93 7,45,163 1993-94 6,39,771 1994-95 2,05,770 2. The petitioner has been pursuing its refund claim for the last five to six years but without any success. 3. In the petition the following reliefs have been claimed : (I) A writ, order or direction in the nature of mandamus directing respondents Nos. 2 and 3 to grant refund of Rs. 15,90,694 of excess deposit of tax for the assessment years 1992-93, 1993-94 and 1994-95 together with exemplary interest for delay of 5-6 years in making the refund. (II) Issue any other writ, order or direction, as this hon'ble court may deem fit and proper under the facts and circumstances of the case. (iii) Award cost of the petition to the petitioner. 4. The above writ petition was filed on January 12, 2012, after giving its notice to the learned standing counsel for the respondent-Department. It appears t....
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....lated from the date of payment of "tax or penalty specified in the notice of demand issued under section 156 is paid in excess of such demand". Emphasis has been laid on the words "paid in excess of such demand." According to them, in view of the Explanation to section 244A, the petitioner having not paid any amount in excess of demand notices issued by the Assessing Officer under section 156, the petitioner is not entitled for any interest. 8. Sri S. D. Singh, learned counsel for the petitioner, submits that on a true and correct interpretation of section 244A, the petitioner is entitled for interest on the delayed payment of refund amount. The submission is that the interest is payable from the date of actual deposit till the date of actual payment of refund amount at the rate specified in section 244A(1)(b). Reliance has been placed on a Departmental Circular No. 549, dated the 31st of October, 1989 (see [1990] 182 ITR (St.) 1), explaining the scope and effect of the newly inserted section 244A as amended by the Direct Tax Laws (Amendment) Act, 1989. 9. Further, reliance has been placed upon the apex court judgment Sandvik Asia Ltd. v. CIT [2006] 280 ITR 643 (SC) ; [2006] ....
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.... may add that the dispute in the present writ petition relates to the period subsequent to March 31, 1989. Section 244A is operative with regard to the payment of interest on refund for the assessment year 1989-90 and thereafter. The provisions relating to refund and interest of the Income-tax Act, were drastically amended by the Direct Tax Laws (Amendment) Act, 1989, with effect from April 1, 1989. 15. Provisions relating to refund and interest are contained in Chapter XIX of the Income-tax Act. Section 237 provides that if the Assessing Officer is satisfied with the liability of tax paid by any persons or by any other person on behalf of the assessee for any assessment year exceeds the amount with which he is properly chargeable under the Act for that year, the said person shall be entitled to a refund of the excess amount. Section 240 deals with the refund of the tax as result of an appellate order. Sections 243 and 244 deals with interest on delayed refund and interest on refund were no claim application needed. But these provisions shall not apply in respect of any assessment for the assessment year commencing on April 1, 1989, or any subsequent assessment years. 16.The ....
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....ituted for "three-fourth per cent." by the Finance Act, 2002, w. e. f. 1-6-2002," three-fourth per cent." was substituted for "one per cent." by the Finance Act, 2001, w.e. f. 1-6-2001 and "one per cent." was substituted for "one and one-half per cent." by the Finance (No. 2) Act, 1991, w. e. f. 1-10-1991. # Inserted by the Direct TAx Laws (Amendment) Act, 1989, w. e. f. 1-4-1989. ## Inserted by the Finance Act, 2005, w. e. f. 1-4-2006. ### The words "and one-half" have been omitted by the Finance (No. 2) Act, 1991 (49 of 1991), s 64 (w. e. f. 1-10-1991). to the period to be excluded, it shall be decided by the Chief Commissioner or Commissioner whose decision thereon shall be final. (3) Where, as a result of an order under sub-section (3) of section 115WE or section 115WF or section 115WG or sub-section (3) of section 143 or section 144 or section 147 or section 154 or section 155 or section 250 or section 254 or section 260 or section 262 or section 263 or section 264 or an order of the Settlement Commission under subsection (4) of section 245D, the amount on which interest was payable under sub-section (1) has been increased or reduced, as the case may....
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....) Act, 1964, was passed with retrospective effect. Section 3, without the proviso, may be read as a whole : "Continuation and validation of certain proceedings.-(1) Where any notice of demand in respect of any Government dues is served upon an assessee by a taxing authority under any scheduled Act, and any appeal or other proceeding is filed or taken in respect of such Government dues, then, (a) where such Government dues are enhanced in such appeal or proceeding, the taxing authority shall serve upon the assessee another notice of demand only in respect of the amount by which such Government dues are enhanced and any proceedings in relation to such Government dues as are covered by the notice or notices of demand served upon him before the disposal of such appeal or proceeding may, without the service of any fresh notice of demand, be continued from the stage at which such proceedings stood immediately before such disposal ; (b) where such Government dues are reduced in such appeal or proceeding (i) it shall not be necessary for the taxing authority to serve upon the assessee a fresh notice of demand ; (ii) the taxing authority shall give intimation of the fact of s....
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....the words of a statute are clear, plain or unambiguous, the courts are bound to give effect to that meaning irrespective of the consequences. In such cases no question of interpretation is involved. 28. It will be useful to reproduce the following two paragraphs from Principles of Statutory Interpretation by Justice G. P. Singh, page 51, 10th edition. "It may look somewhat paradoxical that plain meaning rule is not plain and requires some explanation. The rule, that plain words require no construction, starts with the premise that the words are plain, which is itself a conclusion reached after construing the words. It is not possible to decide whether certain words are plain or unambiguous unless they are studied in their context and construed. * D. Saibaba v. Bar Council of India, AIR 2003 SC 2502, 2507 ; [2003] 6 SCC 186 ; [2003] 2 KLT 669 (This proposition is approvingly referred from page 45 eighth edition of this book). See further Ibrahimpatnam Taluk Vyavasaya Coolie Sangham v. K. Suresh Reddy [2003] 7 SCC 667 pages 677, 678. The rule, therefore, in reality means that after you have construed the words and have come to the conclusion that they can b....
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....ecause of their authoritative construction by superior courts, they are presumed to have been used in the same sense when used in a subsequent legislation in the same or similar context." In Aphali Pharmaceuticals Ltd. v. State of Maharashtra, AIR 1989 SC 2227, it has been held as follows : 32. "An Explanation, as was found in Bihta Marketing Union v. Bank of Bihar, AIR 1967 SC 389 ; [1967] 1 SCR 848, may only explain and may not expand or add to the scope of the original section. In State of Bombay v. United Motors, AIR 1953 SC 252 ; [1953] SCR 1069, it was found that an Explanation could introduce a fiction or settle a matter of controversy. Explanation may not be made to operate as 'exception' or 'proviso'. The construction of an Explanation, as was held in Collector of Customs v. G. Dass and Co., AIR 1966 SC 1577, must depend upon its terms and no theory of its purpose can be entertained unless it is to be inferred from the language used. It was said in Burmah Shell Oil Ltd. v. CTO, AIR 1961 SC 315 ; [1961] 1 SCR 902, that the Explanation was meant to explain the article and must be interpreted according to its own tenor and it was an error to explain the Explanation with....
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....or penalty" for the purposes of calculation of interest amount. The circumstances when interest will be payable by the Revenue has been given sub-section (1) of section 244A. The Explanation, therefore, cannot be interpreted in a manner which will control, prevail upon sub section (1) of section 244A. It cannot control the substantive provision. 36. Looked from another angle, we find that the stand of the Department with regard to the interpretation of the Explanation is not sustainable in view of sub-section (3) of section 244A. This sub-section provides where as a result of appellate order, etc. "the amount on which interest was payable under sub-section (1) has been increased or reduced". It contemplates a situation which may arise on account of decision of appeal under section 250 or section 254 resultantly the amount on which interest is payable is varied in either way, the interest amount will be varied accordingly. The liability to pay interest by the Department is (i) as a result of assessment order, etc., under sub-section (1) of section 244A, as also (ii) as a result of appellate order, the amount on which the interest is payable is enhanced, due to the relief granted ....
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....tained in sections 214, 243 and 244 were complicated. Certain gaps were left for which the interest was not paid by the Department to the assessee for money remaining with the Government. To remove this inequity as also to simplify the provisions in this regard, the Amendment Act, 1987, has inserted a new section 244A in the Income-tax Act. Meaning thereby section 244A has been added to remove the complication and make the Department liable to pay interest for the money remaining with the Government. 42. The relevant portions from the circular is extracted below (page 48 of 182 ITR (St.) : "11.3 These provisions, apart from being complicated, left certain gaps for which interest was not paid by the Department to the assessee for money remaining with the Government. To remove this inequity, as also to simplify the provisions in this regard, the Amending Act, 1987, has inserted a new section 244A in the Income-tax Act, applicable from the assessment year 1989-90 and onwards, which contains all the provisions for payment of interest by the Department for delay in the grant of refunds. The rate of interest has been increased from the earlier 15 per cent. per annum to 1.5 per c....
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....lt of appellate order-Interest payable by the Department under section 244A : Rs. Rs. (i) Tax due as per return of income for the assessment year 1989-90 filed on October 31, 1989, the due date 3,00,000 (ii) The tax of Rs. 3,00,000 due as per return has been paid by the assessee as follows : By way of advance tax by March 31, 1989 Under section 140A on October 31, 1989 2,80,000 20,000 3,00,000 (iii) Tax determined on completion of regular assessment under section 143(3) on March 31, 1990 4,00,000 (iv) Date of payment of further demand of Rs. 1,00,000 [column (iii) minus (ii)] 1-5-1990 (v) Tax determined as a result of appellate order under section 250 on September 30, 1990 3,20,000 (vi) Refund due as a result of appeal 80,000 (vi) Date of grant of actual refund 31-10-1990 &nb....
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....d issued under section 156, no interest is payable, is rejected. This is a novice stand which has been taken by the Department in the present case. The said stand has been taken in ignorance of a situation when the demand is ultimately reduced as a result of an order passed by the higher authority or court. 47. The Income-tax Act statutorily provides for payment of interest on the excess deposit of tax. It has gone to the extent by providing that if an assessee deposits the excess tax by way of advance tax or excess tax is deducted at source under section 206C or is treated as paid under section 199, the assessee would be entitled to receive the simple interest on the excess amount as per formula provided under clause (a) of section 244A(1). 48. On a correct reading of the Explanation, date of actual payment of tax or penalty, in the light of Explanation III referred in the Departmental Circular No. 549 will be the date from which the refund is due. The word "excess" used in the Explanation means the amount as found "excess" as a result of subsequent to the order ordering the issue of notice of demand under section 156 of the Act. 49. There is another aspect of the case. T....
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....ot available in the official records. May as it be, the fact is that there has been some delay on the part of the Department and, therefore, the Department has tentatively decided to grant refund along with statutory interest on the refund amounts. It may be informed that as per calculation in ITNS 150, dated February 1, 2012, refund of Rs. 29,82,056 has been worked out. The refund order of actual amount will be issued after approval of the competent authority at an early date." 54. The respondents have come out with the case that there has been delay in grant of refund due to frequent changes of the Assessing Officers. In the same breath, it has been stated that delay has been caused due to inaction on the part of the assessee-petitioner in bringing the fact regarding grant of refund to the notice of the assessing authority. 55. Noticeably, the said paragraph has been sworn not on the basis of the record or by any of the Assessing Officers of the petitioner. It has been sworn on the basis of the legal advise. It follows that the plea that delay is attributable to the assessee has been set out on getting the legal advice. Such a plea is liable to be rejected at its threshold.....
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.... to the Department or to the competent authority referred to in paragraphs 3 and 17, the interest amount has been withheld and is awaiting the approval of the competent authority. 63. We do not wish to say anything more in this regard and leaving the matter open to the concerned authority to take such action as it may be deemed fit against the competent authority or any other person concerned for not taking an appropriate decision or for inaction. Noticeably, the apex court has already expressed its displeasure in paragraph 49 for the inaction on the part of such officers by making the following observations. We follow them. 64. For the sake of convenience, paragraph 49 is reproduced below (page 677 of 280 ITR) : "This is the fit and proper case in which action should be initiated against all the officers concerned who were all in charge of this case at the appropriate and relevant point of time and because of whose inaction the appellant was made to suffer both financially and mentally, even though the amount was liable to be refunded in the year 1986 and even prior thereto. A copy of this judgment will be forwarded to the hon'ble Minister for Finance for his perusal and ....