TaxTMI 
TaxTMI 
2023 (1) TMI 615
X X X X Extracts X X X X
X X X X Extracts X X X X
.... relevant to the Assessment Years (1983-1984 & 1984-1985) respectively. 2. The assessee has raised the following grounds of appeal: 1. In law and in facts and circumstances of the Appellant's case, the learned Commissioner of Income-tax (Appeals) has erred in points of law and facts. 2. In law and in facts and circumstances of the Appellant's case, the learned Commissioner of Income-tax(Appeals) has grossly erred in dismissing the appellant's ground in segregating the refund issued into tax refund and interest refund and adjusting the tax refund from tax refund due and interest refund from interest refund due instead of adjusting the entire refund granted first against the interest refund due and thereafter against the tax refund due.....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... finds no fault with action of LJAO in impugned contested order, which has been passed following order of Hon'ble Gujarat High Court's decision in related case of Nima Specific Family Trust Vs. ACIT (SCA No.7073 of 2018). Thus, this ground of appeal is dismissed. 7. Being aggrieved by the order of the learned CIT (A), the assessee is in appeal before me. 8. The learned AR before me contended that the amount of interest on the refund granted earlier shall be adjusted against the interest amount for which the assessee is entitled. 9. On the other hand, the learned DR contended that the AO has rightly attributed the amount of refund granted to the assessee under section 244 of the Act towards the principal and interest respectively. 10. I....
X X X X Extracts X X X X
X X X X Extracts X X X X
....up to the date of first issue of refund Rs. 76,872/- 7.1 At the time of 1st refund of Rs. 1,09,410/-, there was no dispute between the assessee and the Department qua the principal amount of refund viz a viz the interest thereon till November 1987 which has been elaborated in the immediate preceding paragraph. 7.2 Further, there is also no dispute to the fact that the amount of refund was short granted by the Revenue in November 1987. The assessee has first adjusted the full amount of interest of Rs. 76,870/- payable till November 1987 against the refund of Rs. 1,09,410/- and the balance amount of Rs. 32,538/- was treated as the recovery against the principal amount of Rs. 1,71,780/- only, thus leaving the principal amount due at Rs. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y as per strict rule of law. Thus, since the statute itself has already prescribed a particular method of adjustment in explanation to section 140A(1), then justice, fairness, equity and good conscience demands that same method should be followed while making adjustment for refund of taxes, especially when no contrary provision has been provided. Under these circumstances and aforesaid discussion, we find that the judicial proprietary demands that order of the Tribunal of earlier years must be followed and therefore we direct the AO to re-compute the amount of interest u/s. 244A by first adjusting the amount of refund already granted towards the interest component and balance left if any shall be adjusted towards the tax component. Thus, wi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....re before the Hon'ble Supreme Court as discussed above. In our humble understanding, we find that there was no question before the Hon'ble Supreme Court whether the amount of refund granted by the Revenue first has to be adjusted against the interest or the principal. Accordingly, no benefit can be derived by the revenue based on the judgment of Hon'ble Supreme Court cited above. As such, the issue on hand is identical to the controversy which was there before the Mumbai tribunal in the case cited above and the same has been resolved. The relevant extract of the order of the ITAT has already been reproduced somewhere in the preceding paragraph. In view of the above and after considering the facts in totality, we set aside the finding of the....