TMI Blog2006 (8) TMI 436X X X X Extracts X X X X X X X X Extracts X X X X ..... interest for delay in grant of interest and hence the Assessing Officer may please be directed to allow interest on delay in grant of interest under section 244A." ( b )In ITA No. 4869 (Mum.)/1995, the following additional grounds are taken by the assessee : "1. That on the facts and in the circumstances of the case, the appellant is entitled for exclusion of interest on tax-free debentures and NSC in computing book profit as per provisions of section 115J and hence the Assessing Officer may please be directed to exclude interest on tax-free debentures and NSC in computing Book Profit as per the provisions of section 115J of the Act. 2. That on the facts and in the circumstances of the case, on grant of further interest under section 244A as prayed for, the appellant would be entitled to interest for delay in grant of interest and hence the Assessing Officer may please be directed to allow interest on delay in grant of interest under section 244A." ( c )In ITA No. 4870 (Mum.)/1995, the assessee has taken the following additional ground : "That on the facts and in the circumstances of the case, on grant of further interest under section 244A as prayed for, the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the return, the assessee has filed Form No. 30 claiming the total refund of Rs. 57,01,613. As per the assessee the pre-paid taxes includes the amount of TDS which was Rs. 27,35,132. The assessee did not furnish the original TDS certificates but only photocopies of those certificates were furnished. As the assessee did not furnish the original TDS certificates while processing the return under section 143(1)( a ), the amount in respect of TDS was not considered for giving the credit. The assessee furnished the original TDS certificates on 19-9-1990. The Assessing Officer granted interest to the assessee but that interest was computed only from the date of furnishing of the original TDS certificates by the assessee i.e. from 19-9-1990 and not from 1-4-1989. The Assessing Officer passed the order under section 154 dated 30-10-1990 and directed to give credit in respect of TDS certificates amounting to Rs. 27,35,132. 6. As the assessee was not granted interest under section 244A(1) of the Act, the same was challenged before the CIT (Appeals). The CIT (Appeals) was of the opinion that due to the late filing of TDS certificates, provisions of section 244A(2) are attracted and hence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 244A on the refund due for the period of the delay. On the plain reading of the language used in sub-section (2) what is important is the proceedings "in which the refund is determined". Merely because original TDS certificates are not filed but there is no other controversy regarding the genuineness of the payment or whether the assessee is eligible for the credit, then whether that can be said to be the proceedings which are contemplated by sub-section (2) of section 244A of the Act. Section 199 deals with the credit to be given which puts the condition for giving the credit that the person claiming the credit should furnish the certificate issued to him under section 203 of the Act. In this case, the return filed by the assessee was processed by the Assessing Officer on 30-3-1990. At that time, as the original certificates were not furnished by the assessee, credit was not given, but it cannot be said that there was delay in processing the return of income under section 143(1)( a ) which was attributable to the assessee. Section 199 puts the obligation on the assessee to furnish the original certificates for the purpose of verification whether the credit is rightly claimed or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 244A up to the date of issue of the refund order." The grievance of the assessee is that though the Assessing Officer passed the order giving effect to the order of the CIT (Appeals) on 15-3-1994, the refund was granted to it only in the month of June, 1994. The ld. AR relied on the precedent in the case of Jay Bros. Investment Trading Co. (P.) Ltd. v. Dy. CIT [2002] 74 TTJ (Mum.) 748. In that case, after considering the relevant Circular issued by the CBDT, it is held that "therefore, it is proper to assume that the words when the refund is granted in section 244A means the date of signing the income-tax refund order i.e. refund voucher". Respectfully following the legal principles laid down by the co-ordinate Bench of the Tribunal, we direct the Assessing Officer to grant the interest to the assessee up to the date of signing of the refund voucher after verification as per the provisions of law. 10. The next issue is whether the assessee is entitled for interest under section 244A of the Act on the interest on the refund if there is a delay in giving the refund to the assessee. 11. We have heard the rival submissions of the parties. We have also carefully co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 per cent per annum to 1.5 per cent per month or part of a month comprised in the period of delay in the grant of refund. The Amending Act, 1987, has also amended sections 214, 243 and 244 to provide that the provisions of these sections shall not apply to the assessment year 1989-90 or any subsequent assessment years." 12. Section 244A which is brought on the statute book with effect from assessment year 1989-90 reads as under : "244A. (1) Where refund of any amount becomes due to the assessee under this Act, he shall, subject to the provisions of this section, be entitled to receive, in addition to the said amount, simple interest thereon calculated in the following manner, namely : ( a )where the refund is out of any tax collected at source under section 206C or paid by way of advance tax or treated as paid under section 199, during the financial year immediately preceding the assessment year, such interest shall be calculated at the rate of one and one-half per cent for every month or part of a month comprised in the period from the 1st day of April of the assessment year to the date on which the refund is granted : Provided that no interest shall be payable if th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equired for interpreting the issue in the light of the provisions of section 244A. 13. The Apex Court by the judgment in the case of CIT v. Narendra Doshi [2002] 254 ITR 606 had impliedly approved the legal principles laid down by the Gujarat High Court in the case of D.J. Works v. Dy. CIT [1992] 195 ITR 227 and Chimanlal S. Patel v. CIT [1994] 210 ITR 419 as the revenue has not challenged the decision of Gujarat High Court in respect of the payment of interest on interest due to the assessee. Now, in the recent judgment in the case of Sandvik Asia Ltd. v. CIT [2004] 267 ITR 78 (Bom.) wherein assessment years 1977-78, 1978-79, 1981-82 and 1982-83 are involved, the Hon ble Supreme Court has examined the provisions of sections 214, 237, 240, 243, 244 and relevant case law on the issue and held as under : "In view of the express provisions of the Income-tax Act, 1961, an assessee is entitled to compensation by way of interest for the delay in the payment of amounts lawfully due to the assessee which are withheld wrongly and contrary to law. The Government is liable to pay interest, at the rate applicable to the excess amount refunded to the assessee, on the in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecome due to an assessee, and further that the phrase "any amount" will also encompass interest. For the assessment year 1977-78 for which the assessee had paid advance tax, the assessee was granted refund of tax on the basis of assessment order and was asked to pay additional tax after rectification. The Commissioner (Appeals) gave substantial relief and the assessee received refund only of the excess amount paid as advance tax. The assessee was not granted interest on the amounts refundable. For the assessment year 1978-79 the assessee was granted refund of tax on the basis of the assessment order but no interest was paid on the refund. After the Commissioner (Appeals) gave substantial relief the assessee received refund only of the excess amount paid as advance-tax. But no interest was granted. For the assessment year 1981-82 the assessee was granted refund as well as interest on the amount under section 214. After the Commissioner (Appeals) granted substantial relief the assessee was allowed interest only under section 214 but no interest was granted under sections 214(1A) and 244(1A). For the assessment year 1982-83, the assessee paid further tax on assessment; but the Commi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We, are therefore, of the opinion that the principles applicable to the earlier provisions in respect of the payment of interest by the Department on the delayed amount of tax refundable and interest due thereon are also applicable to section 244A of the Act. 15. The precedent relied on by the ld. DR in the case of Sandvik Asia Ltd. ( supra ) has been reversed by the Hon ble Supreme Court in Sandvik Asia Ltd. v. CIT [2006] 280 ITR 643 and hence, the ratio of that decision cannot be applied to the facts of this case. We, therefore, respectfully following the legal principles laid down by the Hon ble Supreme Court in the case of Narendra Doshi ( supra ) and the recent decision in the case of Sandvik Asia Ltd. ( supra ), hold that the assessee is entitled on the interest due included in the amount of refund where there is a delay in refunding the same or giving the same to the assessee. We, therefore, set aside the order of the CIT (Appeals) on this issue and direct the Assessing Officer to grant interest on the interest due to the assessee on the amount of tax refundable till the date of signing of the refund voucher. 16. In ITA No. 4869 (Mum.)/1995 relating to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is a delay on the part of the Assessing Officer to refund the same. We, therefore, direct the Assessing Officer to grant interest on the amount of interest due which was belatedly refunded to the assessee. 20. The next issue in this appeal is whether while computing the book profit under section 115J, the amount of tax-free debentures and NSC should be excluded. This issue emerges for our consideration in the additional ground taken by the assessee in the assessment year 1990-91. We have heard the rival submissions of the parties. We have also perused the paper book filed by the assessee. The assessee has placed the copy of computation statement which is at page Nos. 1 to 4 of the paper book. While working out the book profit, the Assessing Officer has reduced the book profit by the following amounts : ( i ) Interest on debentures exempt from tax under section 10( 15 )( iv )( h ) of the Act Rs. 72,85,770 ( ii ) Interest on National Savings Certificates exempt under section 10( 15 ) Rs. 4,070 The assessee filed its return of income for the assessment year 1990-91 on 4-3-1991 declaring total income of Rs. 1,51,50,340 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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