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TMI Blog2016 (3) TMI 416X X X X Extracts X X X X X X X X Extracts X X X X ..... erein above, the C1T(A) also erred in directing the Assessing Officer to examine applicability of sub-section (2) of section 244A of the Act, whereas, it was neither the subject matter of appeal before him nor he had power under law to set up a new case and set aside the order u/s 251 of the Act. 5. That the order passed by CIT(A) is void, bad unjustified, against the provision of law and without giving an opportunity to the appellant and, therefore, same deserves to be quashed and appeal of the appellant should be allowed. 2. Brief facts are: During the course of assessment for A.Y. 1992-93 the AO made the addition of interest income of Rs. 2,69,84,3017-, as income from other sources, rejecting the assessee's plea that it was business income. The dispute went up to the level of the ITAT, which admitting assessee's alternate ground held the income to be taxable in A.Y. 1993-94. Pursuant thereto AO passed order giving effect to the order of ITAT for A.Y. 1992-93 and in order to include this amount in A.Y. 1993-94, a notice u/s 154 dated 4-6-2004 was issued to the assessee, inviting objections on the inclusion of this income in A.Y. 1993-94. Assessee gave its ''no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing that here was no mistake in the order dated 30-7-2004 while granting interest u/s 244A of the Act. AO himself proposed action u/s 154 earlier to withdraw credit for TDS in A.Y. 1992-93 and allow the same in A.Y. 1993-94 along with interest u/s 244A of the Act; that each year was a separate unit and interest u/s. 244A of the Act was allowable in A.Y. 1993-94 independent of any demand/ refund, interest charged/ allowed in A.Y. 1992-93. Thereafter, AO again issued notice u/s 154 dated 5-9-2005 on similar lines to notice dated 5-8-2005, to which assessee replied dated 15-9-2005 reiterating its stand. 2.6. AO, however, passed order u/s 154 of the Act dated 24-10-2005 by which interest u/s 244A granted earlier was withdrawn to the extent of Rs. 72,01,376/- out of interest on refund earlier allowed as under: "Order u/s 154/154/143(1) of the Income Tax Act, 1961" Order u/s 154 of the I.T. Act, 1961 was passed on 30.07.2004 wherein interest u/s 244A of Rs. 75,44,408/- was granted to the assessee from 3.4.1993 to 31.3.2004 i.e. the date of issue of refund. The facts of the case are that the Hon'ble ITAT vide order ITA no. 6639/Del/94 dated 17.09.2002 for assessment year 1992-93 h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest shall be calculated at the rate of 1 % per month or part of a month comprised in the period from the 1st day of April of assessment year to the date on which the refund is granted. In the particular case the interest u/s 244A is allowable to the assessee from 1.4.93 to 29.6.93 on Rs. 8,83,022/- and from 13.9.93 to 31.3.94 on Rs. 52,75,710/-. The total interest allowable thus comes, to RS.343032/-. Keeping in view of the aforementioned order of the CIT(A) and reading of section 4A(l)(a), the excess interest amounting to RS.72,01,376/- is hereby withdrawn. Issue revised forms. Withdraw excess interest allowed u/s 244A of Rs. 72,01,3 76/- and allow interest only upto the issue of refund in the assessment year 1992-93 i.e. upto 29.6.93 and 30.3.94 as per rules." 2.7. Aggrieved, assessee preferred first appeal. Ld. CIT(Appeals), however, dismissed the assessee's appeal by following observations: "7. This being the facts of the case it is seen that the appellant had itself offered the entire income for assessment for the assessment year 1992-93 and the refund was given to the appellant on 30-3-94. However, this case was taken up for scrutiny and on 30-3-94 a demand of R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd contends that assessee's issues about refund and interest u/s 244A payable thereon has been subjected to multiple 154 orders, the chronology is mentioned in AO's impugned order. 3.1. Besides, the remaining credit of Rs. 7,39,856/- was granted in A.Y. 1992- 93. It shall be pertinent to mention that the amounts of refunds, issues about interest on refunds were allowed in favour of the assessee after due approval of order of CIT, Delhi-IV, New Delhi vide order dated 29-7-2004, which is placed on the record, relevant portion is as under: "You were directed to take all remedial actions and send compliance report by 05.05.04. I also personally explained to you that orders u/s. 154 should only be passed after allowing opportunity of being heard. However, no report was received in the succeeding two months in spite of several telephonic reminders in this regard. Examination of file reveals that you had sent the refund proposal to Addl. CIT, Range-II on 28.05.04 by passing order u/s 154 without allowing opportunity to the assessee. These were sent back by Addl. CIT on 04.06.04 with the directions that orders u/s.184 may be passed after allowing opportunity of being heard. F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y. It cannot be called carrying mistake apparent from the record as in none of the rectification orders AO has ever indicated any reasons for delay in refund attributable to the assessee. The determination now, as to whether the delay in granting refund is attributable to the assessee or not, is a debatable issue to arrive at a conclusion after consideration of facts and arguments. The same cannot be called mistake apparent from record and carried out u/s 154. Therefore, the impugned order which is to be rectified u/s 154 contains no apparent mistake. 3.4. In the first para of the 154 order AO has referred only to the history; in second para, AO has relied on the order for A.Y. 1992-93 in which the Id. CIT(Appeals) quashed the interest u/s 220(2) which also has no relevant to A.Y. 1993-94. AO has arbitrarily held that the interest granted to assessee for A.Y. 1993-94 became infructuous, which is a distinct and separate issue. According to Id. counsel, both the years are distinct and separate taxable entities, quashing of interest u/s 220 for A.Y. 1992-93 has no relation with grant of interest u/s 244A for A.Y. 1993-94. Therefore, there exists no mistake for A.Y. 1993-94 which is s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t on which interest was payable under subsection (4) has been increased or reduced, as the case may be, the interest shall be increased or reduced accordingly, and in a case where the interest is reduced, the Assessing Officer shall serve on the assessee a notice of demand in the prescribed form specifying the amount of the excess interest paid and requiring him to pay such amount; and such notice of demand shall be deemed to be a notice under section 156 and the provisions of this Act shall apply accordingly." 3.7. Thus, if by any order of the Court any amount of refund is increased or reduced, in that case the amount of interest allowable u/s 244A is to be accordingly increased or reduced. In this case the interest in question was awarded to assessee consequent to ITAT directions which is covered u/s 244A(3). The order dated 30-7-04 was passed consequent to ITAT judgment dated 17-9-02 and as per the effect of the order of the ITAT if the refund of the assessee became due, the interest is to be awarded to the assessee thereon. If any further 154 order is proposed to be passed, then it should be in conformity with ratio laid down by the Hon'ble Supreme Court judgments in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s orders there is any whisper of any delay attributable to the assessee. The refund and interest was approved by Addl. CIT & CIT as per procedure, who have elaborately dealt with issue about delay and AO's role therein. 5.1. With these orders on record and in the absence of any allegation about assessee's default, the issue of interest on refund cannot be readjudicated in the garb of rectification. Ld. CIT(Appeals) while deciding assessee's appeal should not have issued further directions to AO to consider the issue of 244A(2) afresh. Reference to reconsider 244A by CIT(A) itself makes the order of AO & CIT(A) to decide afresh argumentative issues i.e. to consider the delay attributable to the assessee. For this purpose new facts are to be ascertained and the responsibility about delay is to be fixed, which cannot be done by way of rectification u/s 154. The Id. CIT(Appeals)'s action is wrong inasmuch as neither the issue arises out of the order of AO nor any enhancement notice was served on the assessee. 5.2. Besides, AO's rectification and CIT(A)'s direction is at variance with the approval of refund and interest accorded by Addl. CIT & CIT, New Delhi af ..... X X X X Extracts X X X X X X X X Extracts X X X X
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