TMI Blog2007 (6) TMI 69X X X X Extracts X X X X X X X X Extracts X X X X ..... is 1997-98. The Assessing Officer in a rectification proceedings dated 27.1.2004 made under Section 154 of the Income Tax Act withdrew the interest amounting to Rs.39,38,684/- granted under Section 244A on the reason that the refund arose on account of payment of self assessment tax made under Section 140A. However, on appeal, the Commissioner of Income-Tax (Appeals) by order dated 29.6.2005 allowed the interest on refund and the same was confirmed by the Income-tax Appellate Tribunal in the order dated December1, 2006. 3. Aggrieved by the same, the Revenue has preferred the above appeal raising the following substantial question of law: "Whether in the facts and circumstances of the case, the Tribunal was right in holding that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nterest payable as aforesaid and the balance, if any, shall be adjusted towards the tax payable. (1A) For the purposes of sub-section (1), interest payable,-- (i) under section 234A shall be computed on the amount of the tax on the total income as declared in the return as reduced by the advance tax, if any, paid and any tax deducted or collected at source; (ii) under section 115WK shall be computed on the amount of tax on the value of the fringe benefits as declared in the return as reduced by the advance tax, paid, if any. (1B) For the purposes of sub-section (1), interest payable under section 234B shall be computed on an amount equal to the assessed tax or, as the case may be, on the amount by which the advance tax paid falls s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance tax or treated as paid under section 199, during the financial year immediately preceding the assessment year, such interest shall be calculated at the rate of one half percent for every month or part of a month comprised in the period from the 1st day of April of the assessment year to the date on which the refund is granted: Provided that no interest shall be payable if the amount of refund is less than ten per cent of the tax as determined under sub-section (1) of section 143 or on regular assessment; (b) in any other case, such interest shall be calculated at the rate of one-half per cent for every month or part of a month comprised in the period or periods from the date or, as the case may be, dates of payment of the tax or pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e deemed to be a notice under section 156 and the provisions of this Act shall apply accordingly. (4) The provisions of this section shall apply in respect of assessments for the assessment year commencing on the 1st day of April, 1989, and subsequent assessment years. Provided that in respect of assessment of fringe benefits, the provisions of this sub-section shall have effect as if for the figures "1989", the figures "2006" had been substituted. 6. Even though the short title to Section 140A reads as Self-assessment, the charging phrase employed in Section 140A namely "Where any tax is payable on the basis of any return required to be furnished under Section 115WD or Section 115WH or Section 139 or Section 142 or Section 148 or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law that wherever the assessee is entitled to refund, there is a statutory liability on the Revenue to pay interest on such refund on general principles to pay interest on sums wrongfully retained. 10. We are also strengthened by the decision of the Apex Court for the above view taken in Sandvik Asia Ltd. vs. Commissioner of Income-tax [2006] 280 ITR 643, wherein it is held as follows: "In view of the express provisions of the Income-tax Act, 1961, an assessee is entitled to compensation by way of interest for the delay in the payment of amounts lawfully due to the assessee which are withheld wrongly and contrary to law. The Government is liable to pay interest, at the rate applicable to the excess amount refunded to the as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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