TaxTMI 
TaxTMI 
2017 (11) TMI 988
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....ard together and are being disposed of by this common order. 4. The sole issue raised in these appeals is as to whether the assessee is entitled to grant of interest / compensation on the delayed payment of interest u/s 244A of the Act. 5. The brief facts relating to the issue under consideration are that the assessee is engaged in the business of carriage of goods and has been assessed to tax. For the assessment year under consideration, certain refunds arising out of excess tax deducted at source were issued to the assessee from time to time. However, the interest u/s 244A of the Act was not paid in respect of those refunds. The assesses filed an application u/s 154/155 of the Income-tax Act, 1961 (in short 'the Act') on 21.02.2006 with the Assessing officer requesting that the interest should be allowed under section 244A of the Act to the assessee on the refunds issued. However, the same has been denied to the assessee by the Assessing officer stating that the proceedings were delayed for the reason attributable to the assessee and the interest for the entire period was not payable to the assessee. The assessee, however, submitted that under the provisions of sect....
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....ourt in the case of 'Sandvik Asia Ltd. Vs. CIT', 280 ITR 643 (SC) did not lay down the correct law and ought to be reconsidered. Hence, the matter was referred to a larger Bench of the Hon'ble Supreme Court. He further observed that the larger Bench (three judges Bench) of the Supreme Court in the case of 'CIT Vs. Gujarat Flluro Chemicals' (2014) 1 SCC 126 (SC) 126 has held that section 244A provides for interest on refunds in various contingencies and it is only that interest provided for under the statute which may be claimed by an assessee from the Revenue and no other interest on such statutory interest. He, therefore, relying upon the aforesaid decision, rejected the claim of the assessee. 7. Being aggrieved by the said order of the CIT(A), the assessee has come up in appeal before us. 8. We have heard the rival contentions and have also gone through the record. For properly adjudicating the issue under consideration, firstly, we may refer to the findings arrived at by the Hon'ble Supreme Court in the case of 'CIT Vs. Gujarat Flluro Chemicals' (2014) 1 SCC 126 (SC). The Hon'ble Supreme Court while throwing light on the core issue in 'Sandvik Asia Ltd. Vs. CIT....
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....rest. 10. At this stage, we deem it appropriate to reproduced the relevant provisions of section 244 A of the Act . "Interest on refunds. 244A. (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) ............." 11. Now what has been held by larger Bench (three judges Bench) of thee Hon'ble Supreme Court in the case of 'CIT Vs. Gujarat Flluro Chemicals' (2014) 1 SCC 126 (SC) is that the assessee is entitled to interest on the refund of any amount which becomes due to assessee under the statute. We find that another Larger Bench (three Judges Bench) of the Hon'ble Supreme Court in the case of 'CIT Vs. H.E.G. Ltd' (supra) has answered the question "what is the meaning of the words 'refund of any amount becomes due to the assessee' in section 244A?" 12. The Hon'ble Supreme Court held that the interest component will partake the character of 'amount due' u/s 244A. It becomes integral part of the amount due which becomes due and pay....
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....the respondent for not refunding Rs. 45,73,528 for 57 months. We see no merit in this argument. The interest component will partake of the character of the "amount due" under section 244A. It becomes an integral part of Rs. 45,73,528 which is not paid for 57 months after the said amount became due and payable. As can be seen from the facts narrated above, this is the case of short payment by the Department and it is in this way that the assessee claims interest under section 244A of the Income-tax Act. Therefore, on both the afore-stated grounds, we are of the view that the assessee was entitled to interest for 57 months on Rs. 45,73,528. The principal amount of Rs. 45,73,528 has been paid on December 31, 1997 but net of interest which, as stated above, partook of the character of " amount due" under section 244A." 13. At this stage, the Ld. AR of the assessee has again brought our attention to the relevant wording in section 244A of the Act and has pointed out that the Legislature has not used the words 'refund of excess tax paid' or the 'principle amount of tax paid'; the words used by the legislature are "any amount". The Ld. Counsel for the assessee has, therefore, stressed ....