Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2014 (2) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (2) TMI 1218 - HC - Income TaxInterest charged under section 234D - Retrospectivity - ITAT cancelling the interest charged - Held that:- Explanation (2) to section 234D of the Act has been made applicable to even the assessment year commencing before June 01, 2003. The only requirement in such a case would be that the assessment has to be completed after June 01, 2003. Therefore, after insertion of Explanation 2, the operation of section 234D of charging interest on the excess refund paid to the assessee is not restricted, making operation of such section effective from June 01, 2003. This very issue came up for scrutiny before the Bombay High Court in the case of CIT v. Indian Oil Corpn. Ltd. [2012 (9) TMI 517 - BOMBAY HIGH COURT] has held that addition of explanation (2) to section 234D of the Act by Finance Act, 2012, with retrospective effect from June 01, 2003, is made applicable even to the period under assessment year 2004-2005. In respect of excess refund granted to the assessee under section 143(1) of the Act, the interest was payable by the assessee even if it was received prior to June 01, 2003, so long as the proceedings of the concerned assessment year for which the refund was granted was completed after June 01, 2003. We have respectfully chosen to follow the aforesaid decision of the Bombay High Court and, therefore, the order of the Tribunal in the instant case following the decision the case of Ekta Promoters (P.) Ltd. (2008 (7) TMI 452 - ITAT DELHI-E ) holding the provision of section 234D of the Act applicable only with effect from 2004-2005 and further holding that the interest under this section is not chargeable for earlier assessment years, even though the assessment has been framed after June 01, 2003, is not held to be a correct law and, accordingly, the Revenue's appeal deserves to be allowed. Answering the substantial question of law in favour of the Revenue that in all those matters where excess refund has been granted by the Revenue, the provision of section 234D of the Act will apply and even in the case of earlier assessment years where the assessments were framed after June 01, 2003, the interest will be chargeable in accordance with law - Decided against assessee
|