TaxTMI 
TaxTMI 
2019 (11) TMI 1001
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....essing Officer. 3. That the appellant graves leave to add or amend the aforesaid grounds of appeal at any time on or before the date of hearing of the appeal." Further, the assessee submitted on 19.11.2019 "1. That the ground no.1 in the Memo of appeal originally reads as under: "that the Ld. CIT(A) erred in dismissing the assessee's claim for interest for which assessee was eligible on account of gross and unreasonable delay in granting the refund" 2. That an application was made on 21.03.2017 to amend the aforesaid ground No.1 reads as under: " That the Ld. CIT(A) erred in dismissing the assessee's claim for interest on interest and/or to pay compensation for delayed payment for which assessee was eligible on account of gross and unreasonable delay in granting the refund." 3. That consequent to insertion of section (1A) in section 244(A) appellant desires to further amend the said ground No.1 as under: "That the Ld. CIT(A) erred in dismissing the assessee's claim for interest on interest and/or Additional interest for which the assessee is eligible as per sub-section (1A) of Section 244(A) and/or to pay compensatio....
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....9. that means delay was on the part of the assessee at least upto Sept. 1999 and not on the part of the department. Effect of CBDT's order was given by the department in 2000. The AO did not allow interest u/s 244A. the AO passed the order on 1.7.2000 but the assessee filed an appeal against the order on 13.1.2003 i.e after a delay of two year and five months, obviously it was again a delay on the part of the assessee. The assessee filed an appeal before the CIT(A) seeking interest u/s 244A. There was only one ground of appeal before the CIT(A) that the AO erred in not granting interest on refund. CIT(A) passed order directing the AO to allow interest as per the law. CIT(A) did not direct the AO to give interest on interest. The department was of the view that the appeal before Ld. CIT(A) against order giving effect to CBDT's order was not maintainable. So department filed appeal before I.T.A.T. against the order of CIT(A) directing the AO to grant interest as per the law. The grounds of appeal field by the department before I.T.A.T. was as under: i) In entertaining the appeal as the issue involved was of non-appealable nature. ....
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....In the case of CIT vs. Gujarat Flouro Ltd. Hon'ble Supreme court have held as under: "Further it is brought to our notice that the Legislature by the Act No.4 of 1988 (w.e.f. 01.04.1989) has inserted Section 244A to the Act which provides for interest on refunds under various contingencies. We clarity that 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." In view of CIT vs. Gujarat Fluro Ltd. of the Apex Court it is held that no interest is payable on interest determined u/s 244A of the I.T. Act 1961." 4. Against this the assessee is in present appeal. 5. The only effective ground is against rejecting the claim of the assessee for granting interest on interest on the delayed refund. Ld. counsel for the assessee reiterated the submissions as made in the brief synopsis. For the sake of clarity, the brief synopsis of the assessee is reproduced hereunder: The 3 appeals namely appeal nos. 696, 697 & 698 for the Asst. Years: 1973-74, 1974-75 & 1975-76 respectively raised common questions and therefore documents relating to the Ist Asst. year i....
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....der on 15.9.1992 Soon after the order of Tribunal, assessee requested the CBDT u/s 119(2) of Income Tax Act to condone the delay in deposit of balance amount of Rs. 10,55,762/-. This delay was condoned by CBDT vide order dt. 16.7.1999. Copy of this order is enclosed and marked as Annexure 3. 7. The Assessing Officer gave effect to this order on 22.6.2000. Copy of this order is enclosed and marked as Annexure 4. Although the AO had decided refund of principal amount by order dt. 22.6.2000 however even this refund was only issued on 27.3.2002 i.e., after nearly 2 years. A perusal of this order dt. 22.6.2000 at internal page no. 3 would show that the appellant had already been made to pay an amount of Rs. 6 lacs towards demand for the Asst. year 1973-74. While allowing refund of the amount, the A.O.held that the appellant was not entitled to any interest on this refund. The A.O. also referred to the judgment reported in 188 ITR 137 that 'interest ordinarily is as reckonable compensation when there is retention of the amount due, particularly for an unduly long period'. A.O. also referred to an English judgment that : 'interest is damages due to delay in payment of mo....
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....s enclosed marked as Annexure 12). This order of A.O. dt. 27.2.2008 was the impugned order before CIT (A). 14. The A.O. had rejected appellant's claim of interest for 3 consecutive assessment years by one single order dt.27.2.2008. 15. Consequently, one single appeal came to be filed against this order dt.27.2.2008 before the CIT (A). When this technical objection arose, the CIT (A) allowed the appellant to withdraw its common appeal by order dt. 29.3.2010. Soon thereafter 3 separate appeals were filed on 21.6.2010 which were ultimately decided by the impugned order of CIT (A) dt.18.3.2016 which is under challenge in the instant appeal. Copy of order of CIT (A) impugned in the appeal is enclosed and marked as Annexure 13. 16. In the appeals before the CIT (A) out of which the recent appeal to the Tribunal arises, the only question was with regard to payment of interest on interest in any form to the appellant. II. Submissions of the appellant before CIT (Appeals): i) That, there was inordinate delay in issuing refund to the appellant, thereby entitling the appellant to interest on interest. ii) That, the claim for inter....
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....uish Narendra Doshi case by mentioning that interest in that case was u/s 214 (1) of the Act but in the instant case the claim was not under that section, therefore the judgment did not apply. CIT (A) further held that in view of subsequent judgment in case of CIT Vs. Gujarat Fluro interest on refund could only be granted according to section 244(A) which had been inserted w.e.f. 1.4.1989 and therefore no interest on interest payable u/s 244(A) of the Income Tax Act. V. Submission of the appellant on the question of delay in payment of refund: 1. The first question that arises is whether there is any delay in making the refund. The appellant has given breakup of delay in its letter dt.20.8.07 to the CIT along with the working out chart, a copy of which is already annexed as Annexure 10. A perusal of this chart clearly brings out the delay in making the refund to the appellant. 2. Whether there is any delay on the part of the appellant in this matter: As per CIT (A) there was delay on the part of appellant. Firstly, in depositing the provision amount of gratuity. In this connection, it is submitted that as per law 50% of gratuity....
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.... that the department accepted this order, in other words conclusion of ITAT in the order Annexure 2, that appellant was entitled to benefit of gratuity provision amount actually deposited, was correct and the contrary view of the department in the assessment order was incorrect. Because of this incorrect view of the department the appellant was compelled to deposit an amount of Rs. 6 lacs which was the starting point of dispute and the total claim of refund and interest on refund and interest on interest, all arose because of the department's mistake in not giving credit of the deposit amount of Rs. 20,79,031/- to the appellant at the initial stage. The appellant had been claiming interest on refund according to law. 6. The refund due to the appellant on account of CBDT order Annexure 3 was only issued 2 years after the A.O. had passed order Annexure 4 on 22.6 .2000. Although, the appellant was entitled to interest according to law on the amount of refund, the A.O.by order Annexure 4 refused to grant interest on refund. This mistake was required to be got corrected by filing appeal before CIT (A) which was allowed on 2.12.2004. Instead of admitting the mi....
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....re 14). In appeal Supreme Court dismissed the departmental appeal upholding MP High Court order and also observing that similar judgments passed in other cases had not been challenged by the department (a copy of the order is marked Annexure 15). Judgment in case of Narendra Doshi did not depend on the section under which refund was being granted. Thereafter, in the judgment a Sandvik Asia (a copy of the order is marked Annexure 16) clearly turned on the fact that there was inordinate delay in making refund to the assessee and therefore the assessee was entitled to be compensated by way of interest on interest , in other words the grant of interest on interest in Sandvik Asia was in the nature of compensation. Supreme Court in the case of Gujarat Fluro (copy enclosed marked asAnnexure 17) did not refer to CIT Vs Naraendra Doshi and did not over rule Sandvik Asia's case, but merely expressed that Supreme Court had granted compensation in that case looking to the circumstances of the case. The law is well settled that if there is a 3-Judges judgment of the Supreme Court, it cannot be overruled or passed by any subsequent Bench of 2 or 3 Judges. In ....
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....as inserted Section 244A to the Act which provides for interest on refunds under various contingencies. We clarify that 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." 9. It is the contention of the assessee that the Hon'ble Apex Court did not consider its judgement rendered in the case of CIT Vs. Narendra Doshi 259 ITR 606, wherein the Hon'ble Apex Court held as under: "The question that the High Court was called upon to answer read thus: "Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was justified in law in upholding the order of the Deputy Commissioner of Income-tax (Appeals), Indore, directing to allow interest on interest, when the law points for grant of simple interest only?" It answered it in the affirmative and in favour of the assessee relying upon the judgements which laid down that interest was payable on the excess amount paid towards income-tax. The Tribunal, whose decision the High Court affirmed, had relied upon the decision of the Gujarat High Court in the case ....