TaxTMI 
TaxTMI 
2020 (10) TMI 522
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.... the amount of interest and in not considering the fact that the Department has not wrongly retained the refund amount? (ii) Whether on the facts and in the circumstances of the case, the Tribunal is right in law in relying upon the case of CIT v Sandvik Asia Ltd. (SC) wherein interest is not granted when it is due and granted subsequently? 2. Facts leading to filing of the appeal briefly stated are that the assessee is a Nationalized Commercial Bank. The assessee filed return of income for Assessment Year 1984-85 on 29.06.1984 declaring a total loss of Rs. 2.29 Crores. The assessee filed the return for the Assessment Year 1987-88 on 26.06.1987 and declared a total loss of Rs. 6.9 Crores. The assessments were completed on 21.03.1986 and 30.01.1989, by which total income of the assessee for Assessment Years 1984-85 and 1987-88 was determined at Rs. 30.68 Crores and 42.44 Crores. The assessee filed appeal against the order passed by the Assessing Officer and while giving effect to appellate order, the interest was granted on excess tax paid. Thereupon, the assessee filed an application under Section 154 of the Act on 24.10.2005 and sought interest, which accordi....
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....sion in the case of SANDVIK, supra, has been considered by the Supreme Court in 'COMMISSIONER OF INCOME-TAX, GUJARAT Vs. GUJARAT FLOURO CHEMICALS' (2014) 42 TAXMANN.COM 1 (SC) and our attention has been invited to paragraphs 6, 7 and 8 of the aforesaid decision and it has been pointed out that in the said decision, the Supreme Court has held that refund of certain amount was directed by the Supreme Court in the case of SANDVIK, supra, which was paid by way of compensation and not on interest on interest. It is also pointed out that the aforesaid decision has been followed by Delhi High Court in 'COMMISSIONER OF INCOME-TAX Vs. INDIAN FARMER FERTILIZER CO-OPERATIVE' (2016) 71 TAXMANN.COM 37 (DELHI) and by High Court of Kerala in 'JOSEPH KORAH Vs. INCOME TAX OFFICER' (2015) 229 TAXMAN 0331 (KERALA). Lastly, it is urged that in the absence of any statutory provisions on delayed interest, the assessee is not entitled to interest on delayed payment. In this connection, reference has been made to the decision of the Supreme Court in 'UNION OF INDIA & ORS. Vs. ORIENT ENTERPRISES ETC.' (1998) 146 CTR 546. 4. On the other hand, learned counsel for the assessee submitted that in SANDVIK....
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....ains to the assessment years 1984-85 and 1987-88. Therefore, the decision relied upon by the counsel for the assessee in the case of HEG Ltd. (supra) and Narendra Joshi (supra) do no apply to the factual situation of the case as the aforesaid case deals with Section 244-A of the Act and it is not applicable to the case of the assessee. It is further submitted that computation which has been handed over to us by the learned counsel for the assessee does not apply to the factual situation of the case as the aforesaid computation has been made by taking into account Section 244-A(i) of the Act. It is not applicable to the case of the assessee. It is also submitted that the Division Bench of the Gujarat High Court in the case of Gujarat Flora Chemicals -v- Commissioner of Income Tax (377 ITR 307) has directed refund of the amount by way of compensation in exercising the powers under Article 226 of the Constitution of India. The learned counsel for the Revenue further submitted that in the case of Tata Chemicals (supra), the Hon'ble Supreme Court was dealing with the interest on refund and not interest on interest. Therefore, the aforesaid decision has no application to the facts of the....
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....under sub-clause (i); (aa) where the refund is out of any tax paid under section 140A, 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 date of furnishing of return of income or payment of tax, whichever is later, to the date on which the refund is granted: Provided that no interest under clause (a) or clause (aa) shall be payable, if the amount of refund is less than ten per cent of the tax as determined under sub-section (1) of section 143 or on regular assessment; (b) in any other case, 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 or periods from the date or, as the case may be, dates of payment of the tax or penalty to the date on which the refund is granted. Explanation.-For the purposes of this clause, "date of payment of tax or penalty" means the date on and from which the amount of tax or penalty specified in the notice of demand issued under section 156 is paid in excess of such demand. 7. Thus, the language of the Section is precise, clear and unambiguous. Sub-Section ....