TMI Blog2015 (3) TMI 280X X X X Extracts X X X X X X X X Extracts X X X X ..... uld be inappropriate for this Court to consider that judgment now as binding authority. More importantly, Sandvik Asia Ltd. (supra) was explained by the larger Bench i.e. three Judge Bench decision in Gujarat Fluoro Chemicals (supra) where the Supreme Court categorically held that the only amount which an assessee aggrieved by delayed payment can legitimately claim under the statute is interest and that “no other interest on such statutory interest” is payable. This ruling, in the opinion of this Court, rendered by a larger Bench, would have to be followed as opposed to the ratio in HEG Ltd. (2009 (12) TMI 35 - SUPREME COURT ) where the Supreme Court had expressed a contrary opinion by indicating that the interest component towards the dela ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , at rates prescribed during that period. The AO had denied the amount but the assessee s appeal was partly allowed and the refunds claimed were partly adjusted for future years. The assessee s appeal to the ITAT succeeded. The Tribunal in ITA No.3398 and 3399/Del/2011 by its impugned order dated 20.1.2012 held that the amounts were payable towards delayed payment of interest. The ITAT discussed the facts in the following terms : 5. In this case refund of ₹ 10,38,32,977/- has been determined by the Assessing Officer. No interest has been granted u/s. 244A, though the tax and interest payable on the returned income was computed at ₹ 26,87,16,819/- as against the pre-paid taxes of ₹ 37,25,49,796/- including advance tax o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f interest on interest. 4. The ITAT relied upon the decision of the Supreme Court in Sandvik Asia Ltd. V. CIT Ors. (2006) 280 ITR 643 and held that in its opinion the assessee was entitled to interest on delayed payment of interest and upheld the assessee s contentions as follows : 10. We find that Hon'ble Apex Court in the case of Sandvik Asia Ltd. vs. C.I.T. Ors. 280 ITR 643 had held that assessee was entitled to compensation by way of interest under section 214 and section 244 for the delay in payment interest u/s 214 and 244 lawfully due to the assessee which were withheld wrongly and contrary to law by the department for inordinate long period. In our considered opinion, the ratio from this case law is rightly applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount which included the statutory interest and therefore, directed the Revenue to pay compensation for the same not an interest on interest. 8. Further it is brought to our notice that the Legislature by the Act No. 4 of 1988 (w.e.f. 01.04.1989) has inserted Section 244A to the Act which provides for interest on refunds under various contingencies. We clarify that it is only that interest provided for under the statute which may be claimed by an assessee from the Revenue and no other interest on such statutory interest. 6. Learned counsel for the assessee contends that the impugned order of the ITAT ought not to be disturbed. It is firstly argued that the refund sought was only in respect of the interest payable and not any amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he interest accrued on ₹ 1 lac under Section 244A is not refunded, the Revenue would be liable to pay interest on the amount due and payable but not refunded. Interest will not be due and payable on the amount refunded but only on the amount which remains unpaid, i.e, the interest element, which should have been refunded but is not paid. In another situation where part payment is made, Section 244A would be still applicable in the same manner. For example, if ₹ 60,000/- was paid on 31st March, 2013, Revenue would be liable to pay interest on ₹ 1 lac from 1st April, 2010 till 31st March, 2013 and thereafter on ₹ 40,000/-. Further, interest payable on ₹ 60,000/-, which stands paid, will be quantified on 31st Marc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his clause, date of payment of tax or penalty means the date on and from which the amount of tax or penalty specified in the notice of demand issued under section 156 is paid in excess of such demand. 8. In Sandvik Asia Ltd. (supra), the Court admittedly was dealing with facts prior to the insertion of Section 244A. Therefore, it would be inappropriate for this Court to consider that judgment now as binding authority. More importantly, Sandvik Asia Ltd. (supra) was explained by the larger Bench i.e. three Judge Bench decision in Gujarat Fluoro Chemicals (supra) where the Supreme Court categorically held that the only amount which an assessee aggrieved by delayed payment can legitimately claim under the statute is interest and that no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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