TMI Blog2015 (12) TMI 109X X X X Extracts X X X X X X X X Extracts X X X X ..... as under: 1) In law and in facts and circumstances of the Appellant s case, the learned CIT(A) has grossly erred in the points of law and facts. 2) In law and in facts and circumstances of the Appellant s case, the learned CIT(A) has grossly erred in holding that appellant is not entitled to interest on refund of ₹ 4, 170/-. 3) In law and in facts and circumstances of the Appellant s case, the learned CIT(A) has grossly erred in holding that appellant is not eligible for interest on refund of ₹ 2, 430/-. 4) In law and in facts and circumstances of the Appellant s case, the learned CIT(A) has grossly erred in holding that appellant is not eligible for additional compensation on delayed grant of interest u/s. 244A of the I. T. Act. 5) Your appellant reserves the right to add, alter, amend all or any of the above grounds of appeal as may be advised from time to time. We would like to mention here that while arguing the lead appeal i. e. ITA/5864/Mum/2014, it was stated by the representatives of both the sides that facts are identical in respect of each of the appeals. Therefore, for the sake of convenience, a consolidated order is being pas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uring the course of hearing before us, Authorised Representative(AR)and the Departmental Representative(DR)agreed that identical issue has been deliberated upon and decided by the Tribunal in other group cases, following the order of the Special Bench, that the Hon ble Gujarat High Court had upheld the order of the Special Bench on 26. 06. 2008 in IT appeal Nos. 1514 to 1795of 2006(Punitaben K. Patel OSFDT and 284 other cases), Nos. 573-618 and1216-1233of 2007 (Manjulaben Pramodbhai Ors)and Nos. 182, 204 of 2002, No. 27-30 of 2004(Janak Pramodbhai Patel Ors). Dimissing the appeals filed by the Revenue, the Hon ble High Court observed as under : As regards grant of interest on refund, we find that Tribunal was justified in holding that refund should be granted with interest. We are in full agreement with the order of the Special Bench of the Tribunal. We repeat that Revenue should not drag the respondents to unnecessary avoidable litigation We find that while deciding 31 appeals filed by the other trusts, on 25. 3. 2015, the F Bench of the Tribunal had held as under :- 3.3. It is undisputed fact that in view of the substantial assessability of the income in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Board has clarified that the protective demand is not subject to recovery unless it is finally upheld. The Board has further explained that once the declaration in a substantive case or year is accepted, the tax arrear in protective case / year would no longer be valid and will be rectified by suitable orders in the normal course. In the present case substantive assessments have been made by the department in the hands of Main Trusts. Protective assessments have been made in the case of beneficial trusts. Main Trusts have settled the dispute under KVSS. They have paid the tax under KVSS in respect of the assessment completed in their hands on substantive basis. Therefore, in the light of the circular, the corresponding protective assessments made in the hands of beneficial trusts would fade away and the demand raised in those protective assessment would no longer be valid. When the assessment is not subsisting and the demand is not valid, the amount paid by the assessee along with the return subject to protective assessment becomes refundable to the assessee. Therefore, we are of the considered opinion that the assessing officer has rightly accepted the prayers of the assessees ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Main Trusts have settled their substantive assessments under KVSS which for all practical purposes is equivalent to finally settling the substantive assessments in their hands. The final outcome of the whole process is not different from the substantive assessments having been accepted by the assessees as such or having been settled under an available scheme known as Kar Vivad Samadhan Scheme, 1995. In either case the protective assessments become invalid whereby no demand can be enforced against those protective assessments. The consequence is that if the assessees have paid any amount of tax along with their returns considered for protective assessments, such taxes have to be refunded to them. 32. We do not find much force on the reliance placed by the learned standing counsel on the decision of the Gujarat High Court in the case of Saurashtra Cement Chemical Industries vs. ITO 194 ITR 659. In that case there was no assessment at all and the question of refund was considered in that perspective which is quite different from the present case. The income involved in the substantive assessment as well as in the protective assessments are one and the same. The income has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the assessees to decide whether to take benefit out of that or not. Therefore, it is only when KVSS was promulgated, the assessee had an occasion to make a move and settle the dispute. So also the proceedings were locked up in different appellate forums. Therefore, there is no merit in the argument of the Revenue that the delay was caused by the conduct of the assessees. 35. Therefore, we also find that the assessing officer has rightly granted interest to the assessees on refunds due to them. XXXXXXXXXXXXXXXXXXX 3.5. It was further submitted that in one of the cases interest has already been granted by the Revenue and said grant of interest has not been reversed. Reference in this regard was made to the case of M/s. Vruti Discretionary Family Trust, in respect of which AO disallowed the application of the assessee for grant of interest and Ld. CIT(A) restored the matter back to the file of AO to allow the interest as per law and AO vide his order dated 11/2/2010 has allowed such interest. Reference in this regard was made to the papers filed in the paper book as follows: (1. ) Rectification application of the assessee from pgs. 106 to 108 (2. ) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest can be claimed under section 214 beyond the date of regular assessment. In this manner Ld. DR pleaded that interest has rightly been denied by Ld. CIT(A). 6. So far as it relates to ground No. 4, it was submitted by Ld. DR that according to decision of Hon ble Supreme Court in the case of CIT vs. Gujarat Flouro Chemicals, 358 ITR 291 (SC)w. e. f. 1/4/1989 the interest which can be granted to the assessee on refund as per section 244A would be the interest provided in that section and no other interest on such statutory interest can be provided. Thus, it was pleaded by Ld. DR that there is no provision according to which assessee can be granted interest on interest. 7. We have heard both the parties and their contentions have carefully been considered. In the present cases assessees are common to the assessees with regard to whom, earlier Special Bench had decided the issue that assessee is entitled to interest on the refund. Special Bench order was on the merits of the issue as well as on the validity or otherwise of section 263 of the Act which was invoked by the CIT to deny these assesses benefit of interest which was already granted by the AO. Special Bench has de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Hon ble Gujarat High Court (supra), but keeping in view that no such request was made by Ld. AR, we restrain ourselves to award such cost. 8. Now coming to Ground No. 4, this issue has now been settled by Hon ble Supreme Court by the decision relied upon by Ld. DR. Therefore, we hold that assessee is not entitled to interest on interest. 9. In the result, appeals filed by these assessees are partly allowed in the manner aforesaid. 4. We further find that on 7. 9. 2015, the Tribunal had decided 35 appeals of the same group wherein identical grounds were raised in ITA 6090 6124/Mum/2013 AY 84-85. In that matter the order of the Tribunal dated 25/3/2015 was followed. Respectfully following the above, we hold that the conduct of the Assessing Officer(AO)is against the decision of the Special Bench and Hon'ble Gujarat High Court, that the issue regarding grant of interest to the assessee is covered by the Hon ble Court. Therefore, AO is directed to grant interest to the assessee. Ground Nos. 2 and 3 are allowed in favour of the assessee. Following the order of the Tribunal dt. 25. 03. 2015(supra), we decide Gr. No. 4 against the assessee. 5. Following the above ord ..... X X X X Extracts X X X X X X X X Extracts X X X X
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