TMI Blog2013 (12) TMI 467X X X X Extracts X X X X X X X X Extracts X X X X ..... e order dated 4.2.2003 - No amount of interest have been withheld - If there is any delay in assessment and refund of the amount, the question of payment of interest would arise and not otherwise – The assessee as well as the AO has not mentioned the period of delay of refund - The case was remitted back to the Assessing Officer for the limited purpose of calculation of interest on interest, if any arising out of delay in payment of interest. - ITA No. 1250/Mds/2008 - - - Dated:- 31-1-2013 - N. S. Saini And Shri Vikas Awasthy,JJ. For the Appellant : Mr. Shaji P. Jacob, Addl. CIT For the Respondent : Mr. C. Naresh, CA ORDER Per Vikas Awasthy, JM : The set of eight appeals i.e. ITA Nos.1250/Mds/2008,1252/Mds/2008, 391/Md ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d from the date of payment till the date of actual refund. He submitted that interest under section 244A becomes due to the assessee when Assessing Officer passes order quantifying the refund of excess amount paid along with interest and if there is any default in payment of such interest the assessee is entitled for further interest under section 244A on such amount. The learned DR relied on the judgement of the Hon'ble Delhi High Court reported as 320 ITR 88 wherein it was held that interest under section 244A being a statutory claim become due to the assessee when the concerned authority passes the order. To further support his contentions, he relied on the judgement of the Hon'ble Madras High Court in the case of CIT Vs. Wheels India Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of refund was not paid to the appellant on 27-3-1981 and 30-4- 1986 due to the erroneous view that had been taken by the officials of the respondents. Interest on refund was granted to the appellant after a substantial lapse of time end hence it should be entitled to compensation for this period of delay. The High Court has failed to, appreciate that while charging interest from the assesses, the Department first adjusts the amount; paid towards interest so that the principle amount of tax payable remains outstanding and they are entitled to charge interest till the entire outstanding is paid. But when it comes to granting of interest on refund of taxes, the refunds are first adjusted towards the taxes and then the. balance towards int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt dates between the period from 12.01.1991 to 26.12.1996, after passing the assessment order and there is no inordinate delay on the part of the Revenue in refunding the amount. .Moreover in the order passed under Section 154 of the Act, the amount refundable have been determined only vide order dated 4.2.2003 and, therefore, no amount of interest appears to have been withheld. Only if there is any delay in assessment and refund of the amount, the question of payment of interest would arise and not otherwise. Therefore, as rightly submitted by the Revenue, since the refund amount of interest had been paid without any delay, the question of paying interest on such interest does not arise. 11. A similar view has been taken by the Delhi Hig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax is refunded without interest, the amount of interest retained would be liable for interest i.e. interest on interest would also become payable. The withholding of interest without any justifiable reason in an arbitrary manner will entitle the assessee to claim interest on interest. As regards the method of calculation of interest is concerned, we hold that the assessee is entitled to interest to be calculated in accordance with the law laid down by the Hon'ble Supreme Court in the case of Sandvik Asia Ltd(supra). We, therefore, remit the case back to the Assessing Officer for the limited purpose of calculation of interest on interest, if any arising out of delay in payment of interest in accordance with the method as set out by the Hon ..... X X X X Extracts X X X X X X X X Extracts X X X X
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