2011 (7) TMI 61
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....y the appellant/assessee. Challenging a portion of the order passed by the Income Tax Appellate Tribunal (hereinafter referred to as „the Tribunal‟) has impugned certain observations and issued directions to the Assessing Officer (AO) to recalculate the amount of refund allowable after tax deductable at source allowable thereon under Section 244A of the Income Tax Act („the Tax‟ in short). The AO included substantial income earned by the assessee while computing the taxable income. The Tribunal was dealing with the appeal preferred by the Revenue and the Revenue questioning the order of the CIT(A) whereby CIT(A) had deleted the interest charged by the AO under Section 220(2) of the Act. To this extent, the Tribunal affirmed the order of the CIT(A) and dismissed the appeal. However, thereafter the Tribunal made certain observations and issued the aforesaid directions. According to the assessee, when the Tribunal had upheld the order of the Commissioner of Income Tax (Appeals), it could not travel beyond the scope of the appeal preferred by the Revenue and issued such directions which are not only beyond the scope of the appeal, but also in excess of jurisdict....
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....o the Assessment Year 1993-94, the assessee was naturally not entitled to TDS credit of the aforesaid amount in the Assessment Year 1992-93. Finding this error in the orders passed by the AO dated 25.02.2004, the Tribunal gave direction to the AO to rectify its order by withdrawing credit for TDS for the Assessment Year 1992-93 and allowed the same in the Assessment Year 1993-94. 5. The AO, in these circumstances, issued notice under section 154 of the Act proposing to rectify intimations passed under Section 143(1)(a) of the Act earlier to withdraw the credit for TDS at Rs.68,98,588/- in Assessment Year 1992-93 and allow to the same in the Assessment Year 1993-94. This obvious effort was accepted by the assessee as well who gave his no objection dated 26.02.2004 to the aforesaid proposed rectification. The AO issued rectification orders dated 26.08.2004 revising tax computation raising demand of Rs.74,52,135/-. The position upto this, is not disputed and the assessee agreed to pay the aforesaid amount. However, it so happened that in the orders dated 28.06.2004, while raising the demand of Rs.74,52,135 on re-computation, the AO also charged interest under Section 220(2) of....
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....eld, reversing the decision of the High Court, (i) that the condition precedent under section 220 was that there should be a demand notice and there should be a default in paying the amount so demanded within the time stipulated in the notice. The assessee satisfied the demands under the notices issued under section 156 and nothing was due pursuant to the notices of demand. After the judgment of the High Court on a reference fresh demand notices were issued and in satisfaction of those demands the assessee had paid the amounts as demanded within the time stipulated therein. In such a situation, on a literal meaning of section 220(2), the Department had no right to demand interest for the period commencing from the date of refund of the tax upon the appellate order till the taxes were finally paid after disposal of the reference." 7. The CIT(A) opined that the interest could be charged under the aforesaid provision only when there was a demand notice and there is a default in paying the amount demanded even after the time stipulated in the notice. In the present case, since the interest was charged from the issue of date of refund to the date of withdrawal of refund in spite....
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....s a result of deleting interest under Section 220(2) of the Act, the assessee had got more refund than what was legitimately due to it and the Revenue should not be made to suffer because of mistake committed by the AO in making two separate ITNS-150 for single order passed under Section 154 of the Act. The assessee had countered the aforesaid submission by asking that the AO had passed two separate orders, one under Section 254/143(3) of the Act dated 25.02.2004 to give effect to the order of the Tribunal and another order dated 28.06.2004 under Section 154/143(1)(a) of the Act to rectify intimation earlier issued. The Tribunal dealt with these contentions and accepted the position that the AO committed mistake while giving effect to the orders of the Tribunal. It noted that the AO intended to rectify the mistake by issuing notice under Section 154 of the Act on 17.06.2004 to the assessee. The assessee gave no objection to proposed rectification of order under Section 143(1)(a) subject to the condition that interest was properly charged/allowed. Therefore, the assessee agreed for payment of interest on demand and right to receive interest on refunds as per the provisions of law. T....
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....rder to rectify the mistake of non-withdrawal of TDS credit in assessment year 1992-93 in order to rectify the mistake of non-withdrawal of TDS credit in assessment year 1992-93 in the order passed under section 254/143(3) on 25.02.2004, passed order under section 154 on 28th June, 2004 and two different ITNS-150 forms prepared by the office and signed by the assessing officer are complementary to each other and will constitute part and parcel of order passed under section 154 on 28th June, 2004. The order passed under section 154 on 28th June, 2004. The order passed under section 154 on 28.06.2004, thus, will be rectification of order dated 25.02.2004 passed u/s 254/143(3) giving effect to the order of ITAT." 12. The position which emerges from the foregoing discussion is encapsulated and recapitulated in the following manner: The assessee was earlier given the TDS credit in the Assessment Year 1992-93 and refunded that amount along with interest calculated under Section 254A of the Act. When the AO was giving effect to the orders of the Tribunal and passed the orders under Section 254/143(3) of the Act shifting the interest income from the Assessment Year 1992-93 to the A....
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....assessing officer who can be rectified as per the law. In our view TDS credit (refund) for assessment year 1992-93 can be withdrawn by drawing one and only consolidated ITNS-150. The assessing officer has not prepared any such consolidated ITNS-150. If it is not done the Revenue will be put to loss as the assessee has received undue interest u/s 244A on the refund of Rs.74,52,135/- already granted which is not permissible in law. It is interesting to note that on one hand assessee is objecting to charging of interest u/s 220(2) which is nothing but an action to set off interest allowed u/s 244A on refunds in first ITNS-150. On the other hand, he is keeping silence on undue interest allowed to him. The assessee can claim what is due to it from the department and nothing else. The TDS credit is to be given in assessment year 1993-94. It will be taken in assessment year 1993-94 from very beginning meaning thereby that refund of TDS amount granted thereon will be withdrawn in assessment year 1992-93. Therefore the amount of Rs.74,52,135/- will be deducted from tax paid by the assessee. The assessing officer should have computed interest u/s 244A on net amount of refund after reducing f....