AI Drafter 
TaxTMI 
TaxTMI 
2015 (12) TMI 109
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.... of Rs. 2, 430/-. 4) In law and in facts and circumstances of the Appellant's case, the learned CIT(A) has grossly erred in holding that appellant is not eligible for additional compensation on delayed grant of interest u/s. 244A of the I. T. Act. 5) Your appellant reserves the right to add, alter, amend all or any of the above grounds of appeal as may be advised from time to time. We would like to mention here that while arguing the lead appeal i. e. ITA/5864/Mum/2014, it was stated by the representatives of both the sides that facts are identical in respect of each of the appeals. Therefore, for the sake of convenience, a consolidated order is being passed to adjudicate the above appeals. Brief Facts-(ITA No. 5864/Mum/2014): 2. The assessees are beneficiaries of K. Kacharadas Patel Specific Family Trust(KKPSFT), having 0. 5% interest in parent Trust'. For AY. under appeal, return was filed with on 18/06/1986, showing total income of Rs. 40, 686/- and paid taxes of Rs. 6, 600/-. the AO completed the assessment u/s. 143(3) of the Act on 30. 3. 1987 determining the income of the assessee at Rs. 47, 690/-. However, the assessment was made on protective basi....
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....k Pramodbhai Patel & Ors). Dimissing the appeals filed by the Revenue, the Hon'ble High Court observed as under : "As regards grant of interest on refund, we find that Tribunal was justified in holding that refund should be granted with interest. We are in full agreement with the order of the Special Bench of the Tribunal. We repeat that Revenue should not drag the respondents to unnecessary avoidable litigation" We find that while deciding 31 appeals filed by the other trusts, on 25. 3. 2015, the "F" Bench of the Tribunal had held as under :- 3.3. It is undisputed fact that in view of the substantial assessability of the income in the hands of the main Trust no income is assessable in the hands of these assessees. Thus, it is the case of the assessee that whatever tax is refunded to the assessee, the assessee is entitled to get interest on the said refund under the provisions of section 244(1A) of the Act. It is the case of the assessee that on similar facts and circumstances in the cases of other beneficiaries there is decision of Special Bench, which is dated 7/7/2006, copy of which is filed at pages 33 to 63 of the paper book and it was decided by the Speci....
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....have settled the dispute under KVSS. They have paid the tax under KVSS in respect of the assessment completed in their hands on substantive basis. Therefore, in the light of the circular, the corresponding protective assessments made in the hands of beneficial trusts would fade away and the demand raised in those protective assessment would no longer be valid. When the assessment is not subsisting and the demand is not valid, the amount paid by the assessee along with the return subject to protective assessment becomes refundable to the assessee. Therefore, we are of the considered opinion that the assessing officer has rightly accepted the prayers of the assessees and passed appropriate orders excluding the incomes which have already been considered in the hands of the Main Trusts under KVSS. Therefore, obviously, the assessing officer is justified in following the consequential procedure and making refund to the assessees. 30. One of the basic principles of taxation is that the income shall not be taxed twice. In the present case, the income under dispute is the same considered in the hands of the Main Trusts and also considered in the hands of the beneficial trusts. Kar....
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....e assessments. The consequence is that if the assessees have paid any amount of tax along with their returns considered for protective assessments, such taxes have to be refunded to them. 32. We do not find much force on the reliance placed by the learned standing counsel on the decision of the Gujarat High Court in the case of Saurashtra Cement & Chemical Industries vs. ITO 194 ITR 659. In that case there was no assessment at all and the question of refund was considered in that perspective which is quite different from the present case. The income involved in the substantive assessment as well as in the protective assessments are one and the same. The income has been assessed substantively in the hands of the Main Trusts and the demand subsequently settled under KVSS. It is quite unnecessary to repeat that the income has already been assessed in the hands of the Main Trusts. Therefore, nothing remains thereafter to be assessed in the hands of the beneficiary trusts, as far as the income of Main Trust is concerned. Moreover, a case of assessment can be contemplated in the pre5ent cases because the stand taken by the assessees is that the, income of the Main Trusts has to ....
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.... " XXXXXXXXXXXXXXXXXXX 3.5. It was further submitted that in one of the cases interest has already been granted by the Revenue and said grant of interest has not been reversed. Reference in this regard was made to the case of M/s. Vruti Discretionary Family Trust, in respect of which AO disallowed the application of the assessee for grant of interest and Ld. CIT(A) restored the matter back to the file of AO to allow the interest as per law and AO vide his order dated 11/2/2010 has allowed such interest. Reference in this regard was made to the papers filed in the paper book as follows: (1. ) Rectification application of the assessee from pgs. 106 to 108 (2. ) Order passed by Ld. CIT(A) dated 19/9/2008 page 109 to 110 of the paper book. (3. ) Order giving effect by the AO dated 11/2/2010 pages 111 of the paper book. (4. ) Notice of demand under section 156 granting interest of Rs. 40, 238/- page 112 of the paper book. (5. ) Computation of such interest at pages 113 to 114 of the paper book. 3.6. Thus, it was pleaded by Ld. AR that in view of above submissions the necessary relief should be granted to the assesse....
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....ction and no other interest on such statutory interest can be provided. Thus, it was pleaded by Ld. DR that there is no provision according to which assessee can be granted interest on interest. 7. We have heard both the parties and their contentions have carefully been considered. In the present cases assessees are common to the assessees with regard to whom, earlier Special Bench had decided the issue that assessee is entitled to interest on the refund. Special Bench order was on the merits of the issue as well as on the validity or otherwise of section 263 of the Act which was invoked by the CIT to deny these assesses benefit of interest which was already granted by the AO. Special Bench has decided this issue in favour of the assessee and relevant observation of Special Bench have already been reproduced above. 7. 1. The Revenue challenged the aforementioned order of Special Bench before Hon'ble Gujarat High Court and Gujarat High Court has not only upheld the decision of Special Bench on the issue regarding grant of interest but Hon'ble High Court has also directed Revenue authorities that they should not drag the assesseess to unnecessary avoidable litigation. In spite ....