2024 (5) TMI 1071

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....or consideration is relating to chargeability of interest under section 220(2) of the Income-tax Act, 1961 (in short 'the Act'). 3. Briefly the facts relating to the issue in dispute are, the assessee is a resident corporate entity. As per the case set up by the department, for the assessment year under dispute, the assessee filed its return of income on 30.11.2017, declaring income of Rs. 176,52,75,160/-. Return of income was processed under section 143(1) of Act accepting the returned income and determining refund due of Rs. 7,59,49,760/-. However, out of the said refund due, an amount of Rs. 1,83,69,090/- was adjusted, which comprised of an amount of Rs. 91,84,590/- being outstanding Fringe Benefit Tax (FBT) demand under section 115WE....

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.... learned Commissioner (Appeals) having found that the assessee had suo motu deposited FBT demand of Rs. 91,84,500/- on 16th October, 2018, directed the Assessing Officer to give credit of such payment and set off with the demand dated 04.01.2011. He further directed that since the assessee has deposited FBT demand on 16th October, 2018, the excess demand of the very same amount recovered from the assessee should be refunded. 5. Insofar as the interest component under section 220(2) is concerned, learned Commissioner (Appeals) observed that such interest shall be chargeable till the date of payment of demand. As regards assessee's contention that no interest is payable in terms of section 115WJ of the Act, learned Commissioner (Appeals) h....

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....y and not penal in nature, as it is levied to compensate for the loss of revenue due to non-payment of tax by the due date. Therefore, where the tax has been duly deposited by due date, there is no requirement to levy such interest. In support of such contention, he relied upon the following decisions: 1. CIT Vs. Pranoy Roy [2009] 179 Taxman 53 (SC) 2. CIT Vs. Jindal Exports Ltd. [2009] 179 Taxman 391 (Delhi) 9. Strongly relying upon the observations of learned first appellate authority, learned Departmental Representative submitted, the assessee was very much aware of the FBT demand including the interest component, which was uploaded in the Income Tax Department portal. He submitted, the assessee had access to the Inc....

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....wever, as asserted by the assessee, the intimation of FBT liability as well as the demand notice was never served on the assessee. 11. It is observed, though, the aforesaid facts were brought to the notice of learned first appellate authority, however, neither he has disputed assessee's claim of payment of FBT amounting to Rs. 73,45,724/- through a composite challan, nor he has given any conclusive finding regarding assessee's claim that the intimation regarding FBT liability and demand notice was never served on the assessee. Only observation of learned first appellate authority is to the effect that since the assessee had paid the FBT liability through challan dated 16th October, 2018, it was aware of the demand. Thus, it is clearly bo....