TaxTMI 
TaxTMI 
TaxTMI 
2021 (4) TMI 397
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....CIT(A) had erred in not following the principle laid down in case of Stockholding Corporation of India Vs N.C. Tewari, CIT reported in (2015) 373 ITR 282 (Bom.) and CIT Vs Birla Corporation Limited (Calcutta High Court) (ITA No.526 of 2004) (order dated 02/02/2016), wherein it has been held that interest u/s 244A is allowable even on Self assessment tax payments, for the assessment years and orders passed prior to the amendment made by Finance Act, 2016." 2. The only effective ground raised by the assessee in this appeal is against the disallowance of the claim of interest on Assessment Year paid by the assessee. 3. Facts giving rise to the present appeal are that the assessment u/s 143(3) of the Income Tax Act, 1961 ('the Act') was framed vide order dated 22.09.2015 whereby the Assessing Officer accepted the return income for Rs. 20,83,91,190/-. However, subsequently, the assessee filed application u/s 154 of the Act. The order was rectified by the Assessing Officer. However, the claim of the interest on self assessment tax paid by the assessee u/s 244A of the Act was disallowed. Against this, the assessee preferred appeal before the Ld.CIT(A) who after considering the submissio....
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....016 since the present appeal pertains to the Assessment Year 2013-14. Therefore, the amended provisions of section 244A of the Act could not be made applicable for the year under appeal. 9. We have perused the judgement of the Hon'ble High Court of Punjab & Haryana in the case of CIT vs Punjab Chemical & Crop. Protection Ltd. (supra). The Hon'ble High Court has held as under:- 8. "The aforesaid provision came up for interpretation and consideration in National Horticulture Board's case {supra) wherein it was held as under (page 16 of 253 ITR) : "A conjoint reading of the provisions quoted above shows that the assessee is entitled to receive interest on the amount of refund at the rates prescribed in clauses (a) and (b) of subsection (1) of section 244A. The rationale underlying this provision is to compensate the assessee in lieu of the deprivation of his property right by virtue of unlawful collection of tax. If the proceedings resulting in the refund are delayed due to reasons attributable to the assessee, then the period of delay has to be excluded from the period for which the interest is payable. In other words, if the assessee is responsible for the delay in the fina....
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....i) tax collected at source under section 206C ; and (iii) advance tax or any tax treated as paid under section 199. But, with respect to other tax as per section 244A(l)(b), the interest shall be payable even if the amount is less than 10 per cent, of the tax as determined under section 143(1) or on the regular assessment, because there is no proviso to section 244A(l)(b) as provided under section 244A(l)(a).' The Madras High Court further observed (page 443 of 294 ITR) : 'It is also trite law that wherever the assessee is entitled to refund, there is a statutory liability on the Revenue to pay the interest on such refund on general principles to pay the interest on sums wrongfully retained (reference Sandvik Asia Ltd).' The Supreme Court dismissed the Special Leave Petition (SLP) No. 16877 of 2008 filed by the Revenue against the decision in Cholamandalam Investment and Finance Co. Ltd. [2007] 294 ITR 438 (Mad , vide order dated December 3, 2009. The Supreme Court has also, recently, in the case of CIT v. H.E.G. Ltd. reported in [2010] 324 ITR 331 (SCI, vide its order dated December 3, 2009, held that the expression 'refund of any amount' would include ....
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....ciple entitled to interest thereon since the self-assessment tax falls within the expression 'refund of any amount'." Similar view was expressed by the Delhi High Court in M.M.T.C. Ltd. 's case {supra). 11. It may be observed that in so far as the nature of payment of tax is concerned, the tax deducted at source, advance tax and also tax paid by way of self-assessment, after its adjustment in the tax liability of the assessee on regular assessment loses its original character and becomes tax paid in pursuance of the liability. Once that is so, it cannot be held that the assessee is only entitled to interest under section 244A(l)(b) on tax deducted at source or advance tax and not on self-assessment tax paid under section 140A of the Act which was found to be paid in excess. The assessee shall be entitled to interest under section 244A(l)(b) of the Act on the refund of self-assessment tax as well. 12. The Tribunal, while adjudicating the issue, had noticed as under : "6. We have considered the rival submissions carefully on this issue. Section 244A deals with the grant of interest on refund of any amount of tax which becomes due to the assessee in terms of the pr....
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....demand issued under section 156. The explanation appended to section 244A(1) amply clarifies the position as explained above.' From the above, it, therefore, follows that tax paid under section 140A is also taken as paid in pursuance of an assessment after the completion of assessment. 7. Moreover, the rationale of the provisions of section 244A has been a subject matter of review by the hon'ble jurisdictional High Court of Punjab and Haryana in the case of National Horticulture Board (supra). It has been opined that die rationale underlying the provision was to compensate the assessee for deprivation of his property right which was by virtue of an unlawful collection of tax. In fact, tested on such anvil, interest under section 244A on refund of tax paid as self-assessment tax cannot be considered as outside the purview of section 244A of the Act. The significance of the Explanation below clause (b) is merely to stipulate the period for which the interest has to be granted. For the purpose of clause (b), the interest is payable for the period starting from the date of the payment of tax ending up to the date on which such refund is granted. Therefore, in principle, w....