TMI Blog2021 (12) TMI 442X X X X Extracts X X X X X X X X Extracts X X X X ..... of self-assessment tax for the period beginning from the date of payment of tax or filing of return, whichever was later, to the date on which the refund is granted. This amendment though has been brought w.e.f. 1.6.2016, but it is curative and declaratory provision therefore, same should be applied retrospectively. It has been held so by the Hon ble High Court in the case of CIT vs. Ansal Land Mark Township (P) Ltd [ 2015 (9) TMI 79 - DELHI HIGH COURT] that if the amendment was declaratory and curative in nature, the same should have been on retrospective basis specially when this amendment has been brought to bring fairness and equity and proposed to pay interest in the case where the refund is a result of self assessment tax. Such a benefit has to be extended to all and not only from a particular date i.e. 1.6.2016. Accordingly we direct the AO to allow the interest u/s 244(A). Appeal of the assessee is allowed. - ITA No. 6992/Del/2017 (Asstt. Year : 2014-15) - - - Dated:- 8-10-2021 - SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER Assessee by: Shri Raja Ram Gupta, Advocate Department by : Shri K.A. Manu, Sr. DR ORDER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rate ledger account and too for personal expenses, it does not mean that the expenses cannot be verified or are personal in nature. No discrepancy or any particular expenses have been pointed out as these are for personal nature or the expenses incurred are not for the purpose of business. Such adhoc disallowance cannot be sustained and the same is directed to be deleted. 6. On the issue of interest on refund on self assessment tax and advance tax u/s 244A, from the perusal of the records and written submissions filed by the Ld. Counsel, the facts in brief are that the assessee filed the return and declared net income of ₹ 7442380/- and paid tax of ₹ 2439683/- including TDS of ₹ 157590/- and ₹ 2282093/- U/s 140A of the Income Tax Act. The return was revised at a loss of ₹ 383667/- and the tax of ₹ 2439683 /- paid become refundable. The A.O. issued the refund after assessment after providing interest of ₹ 25,216/- on TDS amount of ₹ 1,57,590/- only u/s 244 of the Income Tax Act. The refund was computed through the IT system which has not considered the tax paid u/s 140-A of the Income Tax Act. Thus the Income Tax Software conside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mprised in the period or periods from the date or, as the case may be, dates of payment of tax or penalty to the date on which the refund is granted. Explanation.-For the purposes of this clause, date of payment of tax or penalty means the date on and from which the amount of tax or penalty specified in the notice of demand issued u/s. 156 is paid in excess of such demand. (2) (3) (4) Thus, section 244A(1)(a) provides for interest on refunds out of Advance tax and tax deducted at source while Section 244A(1)(b) is residual in nature and provides for interest on refund in other cases including excess tax paid on self assessment u/s.140A. The CBDT Circular No. 549 dated 30 October 1989; (III) that the provisions of s.244A(1)(b) mandate that the revenue would pay interest on the amount refunded for the period commencing from the date when the tax was paid to the date when the refund is granted; 8. In the case of Tata Chemicals (supra) the issue before the Supreme Court was whether the resident/Deductor is also entitled to interest on refund of excess deduction or erroneous deduction of tax at source u/s. 195 of the Act. In this case, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court. The Apex Court dismissed the appeal and recognised the right of the deductor/resident to receive interest u/s.244A on the amount of refund. 8.2 The Apex Court held that the amount paid was held by the Government till a direction was issued by the appellate authority to refund the same, therefore, it should carry interest as a matter of course. Furthermore, it was held that interest was in the nature of compensation for use and retention of money collected unauthorisedly by the department. In this regard, the Apex Court held as follows:- A tax refund is a refund of taxes when the tax liability is less than the tax paid. As per the old section an assessee was entitled for payment of interest on the amount of taxes refunded pursuant to an order passed under the Act, including the order passed in an appeal. In the present fact scenario, the deductor/assessee had paid taxes pursuant to a special order passed by the assessing officer/Income Tax Officer. In the appeal filed against the said order the assessee has succeeded and a direction is issued by the appellate authority to refund the tax paid. The amount paid by the resident/deductor was retained by the Govern ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... carries with it the right to interest. Whenever money has been received by a party which ex ae quoet bono ought to be refunded, the right to interest follows, as a matter of course. 8.4 The Apex court also held that explanation to Clause (b) of Sub-section (1) of Section 244A will not be applicable where payment is not made pursuant to any notice u/s.156. Furthermore, Clause (b) of Section 244A(1) is residual in nature and prescribes interest on refund from the date of payment of tax in cases which are not covered by Clause (a) of Section 244A (1). In this regard the Apex Court held as follows:- In the present case, it is not in doubt that the payment of tax made by the resident/depositor is in excess and the department chooses to refund the excess payment of tax to the depositor. We have held that the interest requires to be paid on such refunds. The catechise is from what date interest is payable, since the present case does not fall either under clause (a) or (b) of Section 244-A 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (a) if the refund is out of any advance tax paid or tax deducted at source during the financial year immediately preceding the assessment year, interest shall be payable for the period starting from the 1st April of the assessment year and on the date of grant of the refund. No interest shall, however, be payable, if the amount The said decision has been considered in various cases and allowed interest on Tax paid u/s 140-A also. 9. The Finance Bill 2016, considered the Equity and justice amended The Act, introduced a Sec. 244A(1aa). The explanatory note attached to the finance Bill is reproduced as under:- Payment of interest on refund Section 244A inter alia provides that an assessee is entitled to interest on refund arising out of excess payment of advance tax, tax deducted or collected at source. It also provides that the period for which the interest is paid on such excess payment of tax begins from the 1st April of the assessment year and ends on the date on which refund is granted. In order to ensure filing of return within the due date it is proposed to amend section 244A to provide that in cases where the return is filed after ..... X X X X Extracts X X X X X X X X Extracts X X X X
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