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2015 (6) TMI 930 - ITAT MUMBAI

2015 (6) TMI 930 - ITAT MUMBAI - TMI - Eligibility for interest on refund out of excess Self Assessment Tax paidas per clause (b) of Sub-section (1) of Section 244A - CIT(A) allowed claim - Held that:- Issue regarding grant of interest on self assessment is no more res-integra as Hon'ble Bombay High Court in the case of Stock Holding Corporation of India Ltd. vs. N.C. Tewari, the Commissioner of Income Tax, Mumbai &Others, [2014 (11) TMI 899 - BOMBAY HIGH COURT ] after considering various argume .....

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al, JM. Both these appeals are filed by the Revenue and are directed against two separate orders passed by Ld. CIT(A)-13 dated 24/05/2013 and 30/05/2013 for assessment years 2008-09 and 2011-12 respectively. Grounds of appeal in both the appeals are identical and read as under: 1. The Learned CIT(A) has erred on facts and in law in holding that the assessee is eligible for interest on refund as per clause (b) of Sub-section (1) of Section 244A of the Income Tax Act, 1961 without properly appreci .....

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1961 3. The Ld. CIT(A)'s order is contrary in law and on facts and deserves to be set aside. 4. The appellant prays that the order of CIT(A) on the above grounds be set aside and that of the AO restored. The appellant craves leave to amend or alter any ground or add a new ground that may be necessary. 2. As it can be seen from the grounds of appeal the only grievance of the Revenue is that Ld. CIT(A) has committed an error in granting interest to the assessee on the self assessment tax as t .....

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the assessee and has recomputed the interest payable to the assessee in respect of self assessment made in respect of both the years and refund adjusted in respect of assessment year 2007- 08. 3. Relying upon the grounds of appeal it was submitted by Ld. DR that Ld. CIT(A) has committed an error in granting the interest to the assessee on the payment of self assessment tax as well as refund adjustment in respect of A.Y 2007-08. 4. At the outset it was pointed out by Ld. AR that issue regarding .....

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and a copy was also given to Ld. DR. In the said case assessee had paid a sum of ₹ 2.60 crores on 31/8/1994 by way of self assessment tax on which grant of interest was denied by the Revenue. Several contentions were raised by the Revenue to contend that assessee is not entitled to such interest. Their Lordships of Hon'ble Bombay High Court have considered all these contentions of the Revenue and after analyzing the provisions of section 244A of the Act their Lordships have held that t .....

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it is not the tax payable. Therefore, their Lordships held that there is no substance in the objection of the Revenue that amount paid on self assessment is not tax and, therefore, no interest can be granted on refund on such amount which are not taxed. 4.1 Their Lordships of Hon'ble Bombay High Court have also rejected the contention of the Revenue that relying upon decision of Hon'ble Supreme Court in the case of Union of India vs. Tata Chemicals, 363 ITR 658, interest should not be p .....

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cted at a higher rate in view of the order passed by the authority under the Act. We are unable to appreciate this distinction. This is for the reason that when an assessee pays tax either as Advance tax or on self assessment, it is paid to discharge an obligation under the Act. Not complying with the obligation under the Act visits consequences to an assessee just as non compliance of orders passed by authorities under the Act would. Thus there is no voluntary payment of tax on self assessment .....

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ound that in view of the Explanation appended to Section 244A(b) of the Act, refund of any amount under the aforesaid provision could only be respect of refund of excess payment made under section 156 of the Act. The aforesaid interpretation was negatived in the second appeal by the Tribunal as well as by the High Court and the Apex Court." 4.2 Their Lordships have also rejected the contention of the Revenue that payment of interest should only be made from the date of the notice under sect .....

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ction 156 of the Act. In this case, the payment has not been made pursuant to any notice of demand but prior to the filing of the return of income in accordance with Section 140A of the Act. Secondly, the provisions of section 244A(1) (b) very clearly mandate that the revenue would pay interest on the amount refunded for the period commencing from the date the payment of tax is made to the revenue upto the date when refund is granted to the revenue. Thus, the submission of Mr. Pinto that the int .....

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