TaxTMI 
TaxTMI 
2021 (7) TMI 215
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....be computed on the balance amount. 2. On the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred in interpreting the provisions of section 244A of the Income-tax Act, 1961." 3. The only issue in all these appeals of the revenue is, as to whether the refund should be adjusted first against tax refund or against interest refund while computing the grant of interest u/s. 244A of the Act. 4. We have heard the rival submissions, perused the orders of the authorities below. Ld.CIT(A) considering the submissions of the assessee and following the decision of the Hon'ble Delhi High Court in the case of India Trade Promotion Organization v. CIT [361 ITR 646] and Mumbai Tribunal decision in the case of Union Bank of India v. ACIT in ITA.No. 7589/Mum/2014, directed the Assessing Officer to compute interest u/s.244A as per the findings given by the Hon'ble Delhi High Court observing as under: - "6.1.5. The Appellant placed reliance on the decision of Hon'ble Delhi High Court in case of Re India Trade Promotion organisation v/s CIT (361 ITR 646) wherein the Hon'ble court has held as under: "The words used in section 244A of the Income-tax Act, 1....
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....usted towards the tax payable. This interpretation follows the same principle, when the Revenue defaults and makes part payment of the amount refundable. The interpretation also ensures that the Assessing Officer/Revenue refunds the entire amount, which is due and payable, including interest payable under section 244A. It discourages part payment. There is no other provision under the Act under which an Assessing Officer Revenue can be made liable to pay interest when part payment is made and the entire amount, which is refundable is not paid to the assessee. Otherwise, the Assessing Officer/Revenue can refund the principal amount and not pay the interest component under section 244A for an unlimited period with impunity and without any sanction, which would amount to allowing a premium on non-compliance with the law." 6.1.6. The appellant further placed reliance in the decision of Hon'ble ITAT Mumbai in case of re Union bank of India v/s ACIT LTU Mumbai in ITA no.7589/Mum/2014 order dated 11/08/2016. 6.1.7. In view of above discussion and respectfully following the judgment of Delhi High Court in the case of Re India Trade Promotion organisation v/s CIT (361 ITR 646) and....
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....i Soparkar had made two principal claims - one was that additional interest under sub-section [1A] of Section 244A of the Act should be granted. He argued that this provision was inserted by the legislature by way of a remedial measure and should therefore be applied to all pending cases, even those which might have arisen prior to enactment of such section. His second prayer was to grant compensation for long delay in granting refund. He contended that though the Supreme Court in the case of Gujarat Flourochemicals Ltd. v. Commissioner of Income Tax & Ors., reported in [2015] 377 ITR 307 [Guj.] had disapproved the claim of interest-on-interest, had not held that the compensation for delay in giving refund cannot be ordered. In this context, we may refer to the relevant statutory provisions. Section 244A of the Act pertains to "Interest on refunds." Sub-section [1] of Section 244A mandates the Revenue to grant interest at the statutory rate where refund of any amount becomes due to the assessee under the Act. The situations envisaged under subsection [1] of Section 244A are sub-divided into three parts contained in clauses (a), (aa) and (b). Clause (a) of sub-section [1] of Sec....
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....said period, for reasons beyond his control, the Principal Commissioner or Commissioner on receipt of such request in writing from the Assessing Officer, if satisfied, may allow an additional period of six months to give effect to the order : Provided further that where an order under section 250 or section 254 or section 254 or section 260 or section 262 or section 263 or section 264 requires verification of any issue by way of submission of any document by the assessee or any other person or where an opportunity of being heard is to be provided to the assessee, the order giving effect to the said order under section 250 or section 254 or section 260 or section 262 of section 263 or section 264 shall be made within the time specified in sub-section (3)." We may note that in the earlier form, Section 153 of the Act did not contain any provision similar or equivalent to sub-section (5) of Section 153 of the Act. Brief analysis of the above provisions would show that prior to the amendments in the Act, by virtue of which Section 244A [1A] and Section 153 [3] were brought into effect from 1st June 2016, the Legislation did not envisage any interest on refund in addition to the i....
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.... request in writing from the Assessing Officer, if satisfied, may allow an additional period of six months to give effect to the order. The further proviso to sub-sec. (5) provides that where an appellate or revisional order requires verification of any issue by way of submission of any document by the assessee or any other person, or where an opportunity of being heard is to be provided to the assessee, the order giving effect to such order shall be made within the time specified in sub-sec. (3). Sub-section (3) in turn provides for a time limit for passing fresh assessment pursuant to appellate or revisional order by prescribing time limit of nine months from the end of financial year in which the order under section 254 is received, or order under section 263 or section 264 is passed. Analysis of sub-section (5) of Section 153 would show that the said provision prescribes a time limit of three months for the Assessing Officer to pass an order giving effect to the appellate or revisional order from the end of the month in which appellate order is received or revisional order is passed. Such time limit could be extended by additional period of six months by the Principal Commiss....
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....gislature has provided for retrospective operation thereof. In his book "Principles of Statutory Interpretation", Justice GP Singh refers to observations of Frankfurter in his article "Some reflections on the Reading of Statutes", wherein, it is observed that, "Legislation has an aim, it seeks to obviate some mischief, to supply and indequacy, to effect a change of policy, to formulate a plan of government. That aim, that policy is not drawn, like nitrogen, out of the air, it is evidenced in the language of the statute, as read in the light of other external manifestations of purpose." Though it is well settled that statutes dealing with substantive rights are prima facie prospective, unless it is expressly or by necessary implication made to have retrospective operation, such rigors are not recognized by the Courts when it comes to dealing with remedial statutes. Nevertheless, whether remedial statute is meant to apply to past situations arising before introduction of the provisions in the statute book must depend on the language used in the statute and the purpose for which the amendment was being made by the legislature. We have noticed that prior to the relevant amendments ....
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....date such interest liability would arise. For the past period, there being no provision in sub-section (5) of Section 153 laying time limits, the computation of beginning of the period for granting interest would be unworkable. Claim of interest for the past period cannot be accepted for want of any machinery provided by the legislature to calculate such interest. The legislature therefore by necessary implications did not desire to give any retrospective effect to these provisions. The claim for additional interest therefore cannot be granted for the periods when the provisions of Section 244A [1A] and 153 [3] as they stand now were not in statute book at all. There would however be a caveat to this proposition and it is this. There may be cases where the appellate or revisional order may have been passed long before 1st June 2016. Till the relevant provisions of Section 244 [1A] and 153 [5] were added by the legislature on 1st June 2016, the Assessing Officer may not have passed the consequential order. Even after such amendments, he may not have passed the order within the time provided in such amendments. Even in such a case, if the amended provision of sub-section [1A] of ....
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.... tax paid by the assessee became refundable pursuant to an appellate decision. The principal was refunded but refund of interest was withheld for a long time. The Supreme Court posed a question to itself whether on general principles, the assessee ought to have been compensated for the inordinate delay for receiving monies properly due to it. It was noticed that the revenue has retained such monies of the assessee for the periods ranging from 12 to 17 years. The Court held that the revenue having unjustifiably withheld the refund for seventeen years without any reason, the assessee would be entitled to receive such amount with further interest. The larger Bench of the Supreme Court considered the question whether the decision in case of Sandik Asia Limited v. CIT [Supra] lays down the principle that interest on interest is payable when the refund is delayed. The Supreme Court explained the decision in case of Sandvik Asia Limited [Supra] observing that the Supreme Court in such case was considering the issue as to whether the assessee who was made to wait for refund of interest for decades should be compensated for great prejudice caused to it due to delay in its payment after the ....
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....s held by the Supreme Court in the case of Gujarat Flourochemicals Limited [Supra], whenever statute provides for interest on delayed refunds, the same would hold the field. Further, there cannot be any direction for payment of interest on interest. In the present case, the statute provides for interest on delayed refund in terms of sub-section [1] of Section 244A of the Act. As and when applicable, newly inserted sub-section [1A] of Section 244A provides for additional interest. The statutory provisions thus govern the situations where the interest on delayed refund would be paid as also the rate on which such interest is to be calculated. There cannot be any further direction for payment of interest over and above such statutory prescriptions. This is not a case where the principal refund is granted at one point of time, withholding the interest and the Revenue thereafter, having frozen the liability of interest seeks to avoid making any further payment of compensation on the amount of interest which remained unpaid for a long period of time. Under the circumstances, the petition is disposed of with the following observations and directions: [i] The petitioner would not be en....
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....ll as sub-section (5) of Section 153 of the Act would apply. In the latter, if harmonious construction approach is not adopted, the Assessing Officer could contend that he is under no obligation to pass order giving effect to the appellate or revisional order, nor would the revenue be liable to pay additional interest even after the time available to the Assessing Officer for passing such order has expired. The legislature could not be expected to have brought about such a situation. Any such interpretation would also restrict the prospective effect of these provisions. In such circumstances, the harmonious construction of the statutory provisions would require that if any order giving effect to the appellate or the revisional order is not passed by the Assessing Officer within the time permitted under section 153 [5], after the amendments were made in the statute book, even though the appellate or revisional order was passed before 1st June 2016, the liability to pay additional interest under sub-section [1A] of Section 244A would arise upon completion of such period as if the starting point for computing such period for passing the order was 1st June 2016. To this limited exten....