Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2017 (8) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (8) TMI 1591 - AT - Income TaxRectification u/s. 154 - AO has held that interest granted to the assessee u/s. 244A of the Act is liable to be taxed under Article 22 of Indo-Australia DTAA and accordingly raised demand upon the assessee - HELD THAT:- Special Bench has held in the case of Clough Engineering Ltd. [2011 (5) TMI 562 - ITAT, DELHI] that interest on income tax refund is taxable under Article 11 of the DTAA. The Revenue has originally deducted TDS on the interest granted u/s. 244A of the Act at the rate prescribed under Article 11 of DTAA, which is correct as per the decision rendered by the Special bench. Further the Coordinate Bench has held in the case of Principal Life-International Emerging Markets Separate Account [2014 (11) TMI 984 - ITAT MUMBAI] that question as to whether interest on income tax refund is liable to tax under Article 11 or Article 23 of DTAA was a debatable one. The facts of the said decision shall squarely apply to the facts of the present case also. Hence there is merit in the contentions of the assessee both on merits and on legal point. We hold that rectification order passed by the Assessing Officer is beyond the scope of provisions of section 154. Accordingly, we are of the view that the learned CIT(A) was not justified in confirming the order passed by the Assessing Officer u/s. 154 of the Act. Accordingly, we quash the orders passed by the tax authorities on this issue. Appeal filed by the assessee is allowed.
|