TMI Blog2005 (12) TMI 452X X X X Extracts X X X X X X X X Extracts X X X X ..... Explanation to clause ( b ) to section 244A(1) of the Act. The provisions of the statute are to be given its full effect and in the instant case once the return has been processed u/s 143(1)( a ) and refund is determined as payable to the assessee. The provisions of the Act clearly provide that in addition the interest is payable on such sums which are held and utilized by the Government over and above the tax dues of the assessee under the provisions of Income-tax Act. Accordingly in addition to the refund of the money the assessee was entitled to receive interest on the said excess amount paid by him. We find support from the decision of the Calcutta Bench in the case of Hooghly Mills Co. Ltd. v. Dy. CIT [ 1999 (9) TMI 116 - ITAT CALCUTT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 44A is not admissible. According to him, interest under section 244(1)( a ) is payable by the department in those cases where refund is out of TDS or advance tax paid by the assessee. Further, interest under section 244A(1)( b ) read with Explanation is payable to those cases where refund is out of any tax or penalty paid in pursuance of any notice of demand issued under section 156. The Assessing Officer has pointed out that in this case refund has arisen on account of excess payment of self- assessment tax and section 244A does not provide for any interest from refund arising out of self-assessment tax. The learned CIT(A) allowed the claim of the assessee observing that, the provisions of clause ( b ) to section 244A(1) are applicable "in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee shall be entitled to receive interest under clause ( a ) to section 244A, sub-section (1) on payment of advance tax or TDS and under clause ( b ) in any other case of payment of tax or penalty. He further brought to our notice, the CBDT circular, regarding the insertion of new section 244A in lieu of sections 214, 243 and 244 of the Act by the Amending Act, 1987. It has been provided in the said Circular that the provisions of section 244A were inserted in order to simplify the provisions for the allowability of interest on the money remaining with the Government. It further stated that the old provisions apart from being complicated left certain gaps for which no interest was paid by the department to the assessee and in order to rem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowed the claim of the assessee regarding the entitlement of interest on self-assessment tax paid under section 140A of the Act. 5. We have heard the rival submissions and perused the records and the legal propositions. The provisions of section 244A of the Income-tax Act, applicable from assessment year 1989-90 were inserted by the Amending Act, 1987 in order to allow interest on the amounts due to the assessee by way of refund. These provi- sions were inserted in lieu of sections 214, 243 and 244 of the Act, which apart from being complicated left certain gaps for which no interest was paid by the department to the assessee for money remaining with the Government. The insertion of the new section 244A in the Income-tax Act was clearly ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Explanation appended to clause ( b ) to section 244A clarifies the date of payment of tax or penalty. The binding effect of the Circular on the revenue has been clarified by the Hon ble Supreme Court in various decisions including the decisions in the case of Navnitlal C. Javeri ( supra ) and in the case of Paper Products Ltd. ( supra ). The limited question for adjudication is whether the Explanation appended to clause ( b ) to section 244A(1) limits the allowability of interest on the payments made other than TDS and advance tax. Their Lordships of the Hon ble Supreme Court in the case of S. Sundaram Pillai ( supra ) have considered the impact of the Explanation on statutory provisions of the Act and have elaborately dealt with the matter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ked into from another angle also. The interest was required to be paid by the Government to the assessee for holding utilising the excess money paid by the assessee over and above its tax dues. In the instant case, the assessee had paid much more self-assessment tax than was required under the relevant provisions of law. Although, therefore, the payment had been claimed by the assessee and also considered by the departmental authorities, to be self-assessment tax, actually, the same was not exactly of the nature of self-assessment tax. The amount which the assessee was required to pay in addition to the tax deducted at source to meet up the tax liability arising out of the return should alone be considered as self-assessment tax. The balanc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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