Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2024 (2) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2024 (2) TMI 930 - HC - Income TaxGrant of interest u/s 244A(1)(a) on the refund admissible to appellant - ITAT refused to grant interest on the ground that the refund arising on regular assessment after allowing TDS and advance tax is less than 10% of the tax as determined on regular assessment HELD THAT:- ITAT has completely misdirected itself in adjudicating the controversy involved inasmuch in the facts and circumstances of the case it is wholly academic whether the words “regular assessment” appearing in the proviso to Section 244A(1)(a) of the Act means the original assessment order or the assessment order passed giving effect to the CIT(A) order. The real controversy is whether the words “amount of refund” in the proviso must be given its natural meaning and, therefore, the actual amount of refund ought to be considered or does it contemplate an artificial split of the amount of refund into various components of advance tax, TDS, SA Tax and taxes paid pursuant to demand raised. The words “amount of refund” must mean, in our view, the whole of the refund, and not an artificial split as canvassed by the Department. Therefore, irrespective of what the words “regular assessment” mean, the proviso would not be attracted. The words “amount of refund” must be given their natural/neutral meaning and must, therefore, mean whole of the refund. These words must not be read as permitting an artificial split of the amount into various components of advance tax, TDS, SA Tax and tax paid pursuant to demand. This Court, in J.K. Industries V/s. Krishna Sahal, Commissioner of Income Tax [2023 (6) TMI 1037 - BOMBAY HIGH COURT] wherein the word “amount” in the context of interest payable under the old Section 244A(1A) of the Act was interpreted, held, as being a neutral expression wide enough to include even the interest collected by the Department alongwith the tax and it was consequently held that appellant therein was entitled to interest on the aggregate amount. If the Revenue’s contention that appellant is entitled to interest on advance tax and TDS under Section 244A(1)(b) of the Act is to be upheld, then appellant would be entitled to interest from the date of actual payment (i.e., for a period even prior to the first day of the assessment year) and the exchequer will only have to pay more interest to appellant, as is clear from the plain reading of Section 244A(1)(b) of the Act. The Explanation to Section 244A(1)(b) of the Act, giving a meaning to the phrase “date of payment” as being the date of notice of demand u/s 156 of the Act, has no application to cases where taxes have been paid voluntarily by an assessee – as held by the Hon’ble Apex Court in Tata Chemicals Ltd. [2014 (3) TMI 610 - SUPREME COURT] Questions of law as framed have to be answered in favour of assessee, i.e., appellant. Appellant would be entitled to interest under Section 244A.
|