TaxTMI 
TaxTMI 
2018 (2) TMI 350
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....ne, 2010. The contention so advanced by the assessee in its rectification application was rejected by the Assessing Officer stating that the interest u/s 244A is allowable to the assessee upto May, 2010 as per approval No. 498 dated 04.06.2010 and the same has been duly allowed to the assessee. 3. Being aggrieved, the assessee carried the matter in appeal before the ld. CIT(A) and submitted that interest u/s 244A is to be allowed up to the date on which refund is granted. As per Rule 119A (b) where interest is to be calculated for every month or part of a month comprised in a period, any fraction of a month shall be deemed to be full month and interest shall be so calculated. In the present case, the interest is to be calculated @1/2% for every month or part of a month comprised in the period from 1st April of assessment year to the date on which the refund is granted. It is undisputed that refund is granted on 09.06.2010. The assessee is, therefore, entitled to interest for the month of June 2010 also. 4. It was submitted that the AO has not accepted the contention of the assessee for the reason that CIT has given the approval to allow interest to the assessee up to May 2010. It....
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....ted in 141 TTJ 0862 wherein the decision of Hon'ble Rajasthan High Court in case of Rajasthan State Electricity Board (supra) has been followed. It was submitted that the said decision of the Hon'ble Rajasthan High Court, in fact, supports the case of the assessee. The ld. AR also referred to the decision of Mumbai Bench of the Tribunal in case of Jay Bros. Investment & Trading Co. (P) Ltd. vs. DCIT reported in (2002) 74 TTJ 748 wherein a similar proposition has been laid down whereby refund has been directed to be calculated from the first day of the April of the assessment year to the date on which refund voucher is signed. 8. The ld. DR supported the order of the lower authorities. Further he referred to the decision of Hon'ble Gujarat High Court in case of CIT vs. Arvind Mills Ltd., in ITA No. 2486 of 2009 dated 13.09.2011 for the legal proposition that the assessee was not entitled to interest under section 244A of the Act for both the months when the tax was paid and when the tax refundable was subsequently determined. Per contra, the ld. AR has submitted that in the instant case, the interest is calculated from the month next following the month in which tax is paid but int....
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.... Gujarat High Court was as under: "Whether in facts and in circumstances of the case the Appellate Tribunal was right in law in reversing the orders passed by the CIT (Appeals) and thereby holding that the assessee was entitled to interest under section 244A of the Act for both the months when the tax was paid and when the tax refundable was adjusted irrespective of the period between such events?" 13. The Hon'ble Gujarat High Court referring to the provisions of section 244A, Rule 119A as well as section 3(35) of the General Clauses Act held as under:- "26.0 From the above statutory provisions, it can be seen that Section 244A provides for payment of interest where refund of any amount becomes due to the assessee under the said Act. In such a case the assessee is entitled to receive in addition to the refund amount, simple interest at the prescribed rate. Clause (b) of section (1) of Section 244A of the Act in particular provides that 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 of periods from the date or, as the case may be, dates of payment of the tax or penalty to the date on which the refun....
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....ll month. Therefore, in order to ascertain for how many months the assessee would be entitled to receive interest, the number of months comprised in the period shall have to be found out. In this context, the term 'month' in our opinion, must be given the ordinary sense of the term i.e. 30 days of period and not the British calendar month as defined under section 3(35) of the General Clauses Act. 38.0 We are of the opinion that the definition contained in Section 3(35) of the General Clauses Act defining the term 'month' cannot be adopted for the purpose of sub-section (1) of Section 244A of the Act. Such importation of the definition would lead to anomalous situation. For example, the assessee who pays tax on 1st January of a particular year and is granted refund on 28th of February of the same year, would be entitled to receive interest for two months. If the contention of the assessee in the present case is accepted, in a case where the assessee pays tax on 31st January and is granted refund on 1st February of the same year, shall also be entitled to interest for two full months. This would be so because the assessee contends that for the purpose of sub-section (1) of Section....