TMI Blog2014 (4) TMI 284X X X X Extracts X X X X X X X X Extracts X X X X ..... etained and enjoyed the money deposited - Even the Department has understood the object behind insertion of Section 244A, as that, an assessee is entitled to payment of interest for money remaining with the Government which would be refunded - There is no reason to restrict the same to an assessee only without extending the similar benefit to a resident/deductor who has deducted tax at source and deposited the same before remitting the amount payable to a non-resident/foreign company - the assessee is eligible for interest u/s 244A on the amount of refund due to the assessee worked out on TDS deducted by it – thus, the order of the CIT(A) set aside and the AO is directed to grant interest u/s 244A – Decided in favour of Assessee. - ITA No. 8925/Mum./2010 - - - Dated:- 28-3-2014 - Shri Sanjay Arora And Shri Amit Shukla,JJ. For the Petitioner : Mr. Dinesh Vyas For the Respondent : Mr. Girija Dayal ORDER Per Amit Shukla, J.M. The aforesaid appeal has been preferred by the assessee challenging the impugned order dated 11th October 2010, for the assessment year 1998 99, passed by the learned Commissioner (Appeals) XI, Mumbai. The sole dispute in this appeal i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity in the order of the Assessing Officer for not granting any interest under section 244A. He further held that interest on refund under section 244A is admissible only on the amount of excess tax paid or penalty by the assessee, however, when the amount paid by the assessee is not a tax then interest on refund of 244A is not admissible. 4. Before us, the learned Senior Counsel, Mr. Dinesh Vyas, on behalf of the assessee, submitted that this issue of granting of interest under section 244A in relation to the TDS deducted in pursuance of the order passed under section 195 had come up for consideration before the Tribunal in several cases and now it is a covered issue. Copies of such Tribunal decisions were filed before us. i) Neo Sports Broadcast v/s DDIT, (TA no.4649/Mum./2010, order dated 30th January 2013; ii) Satellite Television Asian Region v/s DDIT, ITA no.8639 8641/Mum./2010, order dated 6th March 2013; iii) ACIT v/s Taj T.V. Ltd., ITA no.413/Mum./2008 order dated 28th January 2011; iv) Tata Chemicals Ltd. v/s DCIT, [2007] 16 SOT 481 (Mum.); v) DDIT v/s Star Cruises (I) Travel Services P. Ltd., ITA no.6498 6500/Mum./2006 dated 24th March 2009. 5. Thus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntitled to receive in addition to the said amount of refund, interest, which is to be calculated in the manner prescribed therein. Section 244A(1)(b) further provides that interest shall be calculated at the rate given therein in any other cases also, which means that in case other than the amounts paid under clause (a) of sub section (1). This clause covers the interest on the amount of tax or penalty specified in the notice of demand issued under section 156, which is to be paid in excess of such demand. This has been provided in Explanation below clause (b). Thus, the language used in section 244A, clearly provides that interest has to be granted on the refund of any amount which becomes due to the assessee. It cannot be construed to mean that such an interest will not be allowed on the refund of TDS, which has been deducted by the payer. The section per se does not make any distinction on the tax determined in pursuance of orders passed under section 143(3) or the refund of tax on account of TDS. The section 244A clearly provides right to the assessee to claim interest on the amount of refund which has become due to him under the provisions of the Act. 8. Now, this issue h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te the rigour of a particular Section for the benefit of the assessee. Therefore, we cannot be taking exception to the reasoning and conclusion reached by the authorities under the Act. However, the Tribunal and the High Court, have granted interest on the amount of tax deposited by the resident/deductor from the date of payment on the ground, firstly, the refund of tax is directed by the first appellate authority in the appeal filed by the deductor/ resident under Section 240 of the Act and secondly, the Revenue for having retained the sum by way of tax has to compensate the person who had deposited the tax. 36. Section 240 of the Act provides for refund of any amount that becomes due to an assessee as a result of an order in appeal or any other proceedings under the Act. The phrase other proceedings under the Act is of wide amplitude. This Court has observed, that, the other proceedings under the Act would include orders passed under Section 154 (rectification proceedings), orders passed by the High Court or Supreme Court under Section 260 (in reference), or order passed by the Commissioner in revision applications under Section 263 or in an application under Section 273A. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d used it, is bound to make the party good, just as an individual would be under like circumstances. The obligation to refund money received and retained without right implies and carries with it the right to interest. Whenever money has been received by a party which ex ae quo et bono ought to be refunded, the right to interest follows, as a matter of course. 39. In the present case, it is not in doubt that the payment of tax made by resident/depositor is in excess and the department chooses to refund the excess payment of tax to the depositor. We have held the interest requires to be paid on such refunds. The catechize is from what date interest is payable, since the present case does not fall either under clause (a) or (b) of Section 244A of the Act. In the absence of an express provision as contained in clause (a), it cannot be said that the interest is payable from the 1st of April of the assessment year. Simultaneously, since the said payment is not made pursuant to a notice issued under Section 156 of the Act, Explanation to clause (b) has no application. In such cases, as the opening words of clause (b) specifically referred to as in any other case , the interest is pay ..... X X X X Extracts X X X X X X X X Extracts X X X X
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