TMI Blog2012 (11) TMI 810X X X X Extracts X X X X X X X X Extracts X X X X ..... ratio and the proposition of law laid down in case of Modi Industries Ltd.( 1995 (9) TMI 324 - SUPREME COURT). In the case of Sandvik Asia Ltd. (supra), the Hon’ble Supreme Court, was besieged with the issue of withholding of refund without sanction of law. Issue decides in favour of assessee Interest on refund - Assessee contended that interest should be paid on the amount of refund delayed after the expiry of 3 months from date of ITAT’s order till the date of actual granting of refund – AO argued that the interest should have to be paid in after the expiry of three months from the date of ITAT order, till the date of passing of the order giving effect of the ITAT and further interest on balance amount of refund shall become payable f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id refund became due to the appellant on the basis of ITAT s order dated 18.06.1997 and should have been refunded to the appellant within a reasonable time from the said date, but was actually granted on 25.05.2000. 2. Brief facts of the case are that the assessee is a non-resident company incorporated under the laws of Denmark. The assessee has filed return of income claiming refund of Rs..75,52,774/-. The assessment was completed under Section 143(3) by the Assessing Officer on 26-3-1987 and a refund of Rs..25,18,809/- was granted against the claim of Rs..75,52,774/-. The assessee s appeal was finally decided by the ITAt vide order dated 18-6-1997, wherein major part of the appeal was allowed. The effect of ITAT s order dated 18-6-19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Supreme Court in the case of Modi Industries Ltd. (supra), wherein the Hon ble Apex Court after analysing the provisions of Section 244(1)A and various other case laws, has held that the advance tax and TDS is to be treated as payment of income-tax in pursuance of the order of assessment on or from the date when these amounts are set off against the tax demand raised in the assessment order i.e. from the date of the assessment order. On the second aspect, the CIT(A) held that the interest on interest is also not permissible 5. Learned counsel appearing on behalf of the assessee submitted that the earlier judgment of the Hon ble Supreme in the case of M/s Modi Industries Ltd.(supra) stands diluted by the latest judgment of the Hon ble Su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 7. We have carefully considered the rival submissions and also perused the material on record. So far as the assessee s contention in ground No1 that the interest of refund should be allowed from the 1st of April of the financial year in which TDS was deducted, ie. from 1-4-1984 and not from the date of regular assessment order 26-3-1987, we find that, in assessee s case, provision of section 244 would be applicable as the matter pertains to assessment year 1984-1985 and not 244A, which has been brought in the statue from A.Y.1989-1990. The Hon ble Apex Court in the case of Modi Industries (supra), while interpreting the section 244(1A) has clearly held that :- If any tax is paid pursuant to an assessment order after March 31,1975 (w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of Modi Industries Ltd.(supra), as in the case of Sandvik Asia Ltd. (supra), the Hon ble Supreme Court, was besieged with the issue of withholding of refund without sanction of law. Thus, there is no merit in the assessee s ground No.1. Accordingly, ground No.1 is dismissed. 8. In ground No.2, the assessee has challenged that the interest should be paid on the amount of refund delayed from the date of ITAT s order till the date of actual granting of refund. From the records, it is evident that the effect of the ITAT s order dated 8.6.1997 has been given almost after three years and no interest has been granted for the delay of this three years. Section 240 provides that where as a result of any order passed in appeal or other proceedin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see should be granted interest on the total refund due for the period 1st October, 1997 till the date of actual refund is granted, as the effect of ITAT s order dated 8.6.1997 should have been given within three months from the end of June 1997, i.e. before 30th September 1997 as per section 244(1). This granting of interest in the second step, stands covered in favour of the assessee by the judgment of Hon ble Apex Court in the case of Sandvik Asia Ltd. (supra), and by host of other case laws, which has been referred to by the learned counsel of the assessee. Such an interest is to be granted even though the effect of granting of such interest on the refund from 1-10-1997, till the date of refund, amounts to interest on interest. This prop ..... X X X X Extracts X X X X X X X X Extracts X X X X
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