TaxTMI 
TaxTMI 
TaxTMI 
2015 (3) TMI 639
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.... not allowing interest u/s 244A of the Act on the tax refund of Rs. 663.12 lacs from 1/4/1995 (being the date of commencement of the assessment year) till 23/8/2007, (being the date on which the imgpuned order is stated to have been received by the CIT) a) particularly when there is no delay attributable to the appellant. b) The refund has arisen as a result of the order of ITAT giving effect to the order of BIFR. c) Stating that there is no delay on the part of the Department till 23/8/2007 (being the date of receipt of the impugned order by the CIT) which is not a legally tenable reason to deny interest u/s 244A(2) of the Act. 4. The AO has on facts and in the circumstances of the case and in law erred while calculating interest u/s 244A and; 4.1 denying interest for the month of March 1998 on the payment of Rs. 7,75,50,260/- made on 25/03/1998 4.2 and thereafter allowing interest on Rs. 74,357,749, after appropriating the difference of Rs. 3192511 towards the refund attributable to BIFR refund; and also 4.3 not allowing interest for the months of November, 1998, August 1999, and March, 2006 (on Rs. 54,700,000) 5. The AO has erred on facts and in the circumstances of the ....
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....erusal of the assessment record reveals that the benefit of set off of accumulated losses and unabsorbed depreciation was initially claimed by the assessee company in A.Y. 1996-97 to 1999-2000. The AO allowed benefit of set off of accumulated losses pertaining to MITCO which was subsequently withdrawn by the Department in terms of order u/s 154 of the Act dated 29/03/2004 the relief in terms of scheme of merger was restricted to the extent of Rs. 663.12 lacs for the year under consideration in this appeal. 4. Being aggrieved by the aforesaid action of the AO the assessee company carried the matter before CIT(A) and in terms of his order dated 22/07/2004 it was decided by the CIT(A) that the benefit of Rs. 663.12 lacs was in terms of tax credit and not in terms of quantum of unabsorbed losses/depreciation of MITCO and, therefore, the AO was directed to grant tax benefit to the assessee company for A.Y. 1995-96. Subsequently the CIT(A) rectify his own order so as to hold that the tax benefit was to be granted for A.Y. 1996-97 and not for 1995-96 as earlier held by him. 5. Being aggrieved by the aforesaid rectification made by the CIT(A) the matter was brought by the assessee compan....
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....ation. The ld. Sr. Counsel vehemently contended that the CIT(A) wrongly reverse his own order dated 22/07/2004 denying relief u/s 72A of the Act as there was no delay attributable on the part of the assessee company so as to deny interest u/s 244A of the Act. The ld. Sr. Counsel further pointed out that the refund has arisen constant effect as directed by the ITAT and interest u/s 244A of the Act is mandatorily allwoable by the provisions of the Act on the consequential refund. The ld. Sr. Counsel strenuously contended that the CIT(A) grossly erred on facts and circumstances of the case and also in law in holding that the claim of the assessee company in regard to the interest u/s 244A of the Act is not covered either by clause (a) or (b) of sub-section (1) of sec. 244A of the Act. 9. The ld. Sr. Counsel further submitted that the CIT(A) wrongly justified the denial of assessee's claim of interest u/s 244A of the Act for the year under consideration on the basis of non charging of interest u/s 220(2) of the Act for A.Y. 1996-97 which was even otherwise not leviable according to the provisions of law. The ld. Sr. Counsel finally submitted that the assessee company be allowed intere....
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....to hold that neither the AO nor the CIT(A) were right in ordering the exclusion of any period for computation of interest on refund u/s 244A(1) of the Act as it was outside the ambit of their powers. 13. At this stage it will be appropriate and relevant to reproduce provisions of section 244A of the Act to decide this controversy in a judicious manner, thus, said provision reads as under: "244A Interest on refunds : (1) Where refund of any amount becomes due to the assessee under this Act, he shall, subject to the provisions of this section, be entitled to receive, in addition to the said amount, simple interest thereon calculated in the following manner, namely : (a) Where the refund is out of any tax paid under s. 115WJ or collected at source u/s 206C or paid by way of advance tax or treated as paid u/s 199, during the financial year immediately preceding the assessment year, such interest shall be calculated at the rate of one-half per cent for every month or part of a month comprised in the period from the 1st April of the assessment year to the date on which the refund is granted: Provided that no interest shall be payable if the amount of refund is less than ten per cent o....
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....ec. 244A has been inserted on the statute by the Direct Tax Laws (Amendment) Act, 1989 w.e.f. 1st April, 1989 and it has been inserted in lieu of ss. 214, 243 and 244. Sub-s. (1) of s. 244A provides for granting of refund by the Revenue to the assessee in the cases where payment of advance tax and TDS exceeds the tax liability. In the present case, there is no dispute so as for the entitlement of assessee to get refund, but the controversy is regarding the period which is to be excluded as per provisions of s. 244A(2). Looking to the language used in s. 244A, it is very clear that the AO, considering the facts before him, will have to determine whether the assessee is entitled to refund or not and if he is entitled to refund then for what period he is entitled to interest and further where any question arises as to the period to be excluded the same shall be decided either by Chief CIT or CIT whose decision thereon shall be final. Here, in the present case, the AO excluded the period at his own while processing the claim of the assessee for refund. Under the express provisions of s. 244A(2) the AO could not do so as it was outside of his jurisdiction and the question of exclusion o....