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Shri Jagdish Chandra Malhotra Versus DCIT, Circle-6 (1) , New Delhi

2016 (2) TMI 564 - ITAT DELHI

Interest u/s 244A - Interest on refund where no claim is needed - Whether Commissioner (Appeals) erred in holding that delay in issue of refund was attributable to the assessee without considering the fact that application for rectification of mistake was filed on 17-12-2008. - Held that:- After going through the provisions of section 244 and 244A we are of the considered opinion that the appellant is entitled for simple interest on the excess tax paid, by whatever name called, such as TDS or Ad .....

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X, New Delhi dated 26.8.2013 on the following grounds of appeal:- 1 That Commissioner (Appeals) erred in not granting interest u/s 244A on the income tax refund of ₹ 8,63,139 paid to the assessee for the period from 17-12-2008, being the date of filing of rectification application, till 04-12-2012 being the date of grant of refund. 2 That Commissioner (Appeals) erred in holding that delay in issue of refund was attributable to the assessee without considering the fact that application for .....

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ent tax is a tax covered in Sec. 244A(l)(b) or not, direct judgement of Supreme Court in the case of Cholamandalam Investment & Finance Co. Ltd. [which lay down specific rule that self assessment tax is a tax covered under sec 244A(l)(b)] be followed and judgment of SC in the case of Commissioner of Income-tax, Gujarat v. Gujarat Fluoro Chemicals [2014] 42 taxmann.com 1 (SC) dated September 18, 2013 (which lay down general rule that it is only that interest provided for under the statute whi .....

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rejudice to above grounds, interest on refund u/s 244A be calculated on the same basis on which interest is charged by the income tax department u/s 201 of Act; interest payable to the assessee from 17-12-2008 till 04-12-2012 should be for 49 months in line with interest u/s 201 being charged by the income tax department. 7. That whether Interest which accrued to the assessee for not refunding ₹ 8,63,139 for 49 months (amounting to ₹ 2,11,469 calculated at the rate of 0.50% per month .....

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d was ₹ 50,000, TDS - ₹ 39,50,807 and self-assessment tax paid - ₹ 5,80,870. The appellant has calculated his returned income under the following heads:- Income from Salaries 11,90,400 Income from house properties 1,08,75,047 Long term capital gain 17,02,103 Income from other sources 3,83,397 Deduction claimed under Chapter VIA 51,760 He had paid ₹ 8,00,000/- as advance tax on 15.03.2008 by CSN 44 BSR 220094. In the application, the appellant admitted that by mistake the .....

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on received, the appellant filed rectification application u/s 154 on 1.6.2012 in which he claimed advance tax for ₹ 8 lakh which was not claimed in the original return filed. There was a demand u/s 143(1) and he was entitled for refund of ₹ 2,34,153/- for assessment year 2011-12 which was also adjusted. Accordingly, he was entitled for net refund of ₹ 10,34,153. Ld. Assessing Officer has denied interest on excess tax paid and passed the order u/s 154 showing net tax refundable .....

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entitled for interest on excess tax paid by way of self assessment tax, advance tax, TDS or any other mode of payment made by the assessee . Appellant has correctly calculated his tax due and filed return of income but by mistake he could not adjust his advance tax paid on 15.03.2008 at the time of filling of return and self assessment tax paid again on his balance tax due. The appellant, when come to his knowledge, filled rectification u/s 154 for claiming refund . He placed reliance on the cas .....

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s of taxes paid other than pre-paid taxes covered in clause (a), the computation of interest is for the period prescribed in clause (b), sub-section (1) of the said section. The tax due on the returned income has to be paid by way of tax deducted at source (section 199), advance tax (section 209) or by way of self-assessment tax (section 140A). In addition, where the assessment is completed at an income higher than the returned income, the tax payable by the assessee is specified in the notice o .....

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Government. This is based on the principle that if the revenue had, in the first instance, made correct assessment of the tax liability of the assessee, the assessee would not have been deprived of the use of money. In such a situation, where pre-paid taxes are in excess of the assessed tax, the assessee is entitled to refund of such tax along with interest thereon. Where an assessee out of abundant caution pays self-assessment tax whilst staking a claim in the return, which claim is accepted, r .....

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titled to interest thereon since the self-assessment tax falls within the expression refund of any amount . The computation of interest on self-assessment tax has to be in terms of section 244A(1)(b), i.e., from the date of payment of such amount up to the date on which refund is actually granted. He placed reliance also on the following judgements in support of his claim : 1). CIT vs. Engineers India Ltd. ( Del. H.C. ) ITA No. 300/2012 2). ACIT vs. M/s. Syndicate Bank Ltd. (ITA No. 1700 to 1704 .....

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(SC) 9. CIT vs. Gujrat Fluoro Chemicals (2014) 42 Taxmann.com 1(SC) 10. Amt. Manura & Ors (MAC App. 471/2014) dated 20 Feb. 2015 11. CIT vs. Gujrat Fluoro Chemicals (2014) 43 Taxmann.com 350(SC) 12. Sandvik Asia Ltd vs. CIT(Civil appeal No.1337-1340 of 2005) dated 27 Jan. 2006 13. CIT vs. A.B.T. Industries Ltd. (2013) 36 Taxmann.com 22 (Madras) 14. CIT vs. Arvind Mills Ltd. (2011) (9) TMI 244) dt. 13 Sept., 2011. He further submitted that Long term capital gain is taxable as per section 112 .....

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44 and 244A itself describes procedure and calculation of refund of any amount which becomes due to the assessee under this Act. 8. We are reproducing Section 244 as under: Interest on refund where no claim is needed. 244. (1) Where a refund is due to the assessee in pursuance of an order referred to in section 240 and the [Assessing] Officer does not grant the refund within a period of [three months from the end of the month in which such order is passed], the Central Government shall pay to th .....

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g been found in appeal or other proceeding under this Act to be in excess of the amount which such assessee is liable to pay as tax or penalty, as the case may be, under this Act, the Central Government shall pay to such assessee simple interest at the rate specified in sub-section (1) on the amount so found to be in excess from the date on which such amount was paid to the date on which the refund is granted : Provided that where the amount so found to be in excess was paid in instalments, such .....

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on (1) shall be payable to him in respect of the amount so found to be in excess.] (2) Where a refund is withheld under the provisions of section 241, the Central Government shall pay interest at the aforesaid rate on the amount of refund ultimately determined to be due as a result of the appeal or further proceeding for the period commencing after the expiry of [three months from the end of the month in which the order referred to in section 241 is passed] to the date the refund is granted. [(3 .....

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e refund is out of any tax paid under section 115WJ or collected at source under section 206C or paid by way of advance 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 onehalf per cent 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 a .....

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ate 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. (2) If the proceedings resulting in the refund are delayed for reasons attributable to the assessee, whether wholly or in part, the period of the delay so attributable to him shall be excluded from the period for which interest is payable, and where any question arises as to the period to be excluded, it .....

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