TMI Blog2016 (8) TMI 165X X X X Extracts X X X X X X X X Extracts X X X X ..... ing interest to the assessee under section 244A(1) of the Act. In this case, there was no decision by the Commissioner or Chief Commissioner on this issue and so much so, we do not think the Assessing Officer made out the case of delay in refund for any period attributable to the assessee disentitling for interest. So much so, in our view, the officer has no escape from granting interest to the assessee in terms of section 244A(1)(a) of the Act - SPECIAL CIVIL APPLICATION NO. 6830 of 2016 With SPECIAL CIVIL APPLICATION NO. 6832 of 2016 - - - Dated:- 27-7-2016 - MR.JUSTICE AKIL KURESHI AND MR.JUSTICE A.J. SHASTRI, JJ. FOR THE PETITIONER : MR MANISH J SHAH, ADVOCATE FOR THE RESPONDENT : MR PRANAV G DESAI, ADVOCATE ORAL ORDER (PER : HONOURABLE MR.JUSTICE AKIL KURESHI) 1. Since the facts are common, we may notice them from Special Civil Application No.6830 of 2016. 2. The petitioner has challenged an order dated 18.2.2016 passed by the Principal Commissioner and further, an order dated 16.3.2016 passed by the Assessing Officer giving effect to the order of the Commissioner. The petitioner has also challenged a demand notice dated 16.3.2016 under which th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me for A.Y.2008-09 on 29.9.2008 showing total income at ₹ 56,02,55206/-. In the said return of income you had offered the receipt of Kutch Incentive Scheme as part of your total income and paid taxes thereon. However subsequently, you had filed revised computation of income during the course of assessment proceedings vide your letter dated 7.11.2009, showing total income ₹ 17,67,05,584/-. In the revised statement of income the receipt from Kutch Incentive Scheme in the form of Excise and VAT refunds were reduced from the total income treating the same as capital receipts. Again vide order u/s. 154 of the IT Act dated 22.3.2014, the total income was passed and the total income further revised to Rs.(-) 3,02,98,318/- due to set off of loss granted for earlier years. Finally an order 154 of the IT Act was passed on 12.6.2014 granting you refund of ₹ 4,36,72,050/-. 3. On perusal of computation of tax made in the order passed it is noticed that you have been allowed total interest u/s.244A of the IT Act at ₹ 3,72,70,522/-. This interest has resulted as you had filed revised return of income on 7.11.2009 in which income offered for taxation in the original retu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ho, by the impugned order dated 18.2.2016, held that the petitioner was not entitled to interest on the refund for the entire period from 1.4.2008 till the date of order giving effect to the appellate order. Likewise, for the Assessment Year 2007-08, he denied interest to the petitioner for the period from 1.4.2007 till the date of the order giving effect to the appellate order. 8. While giving effect to this order of the Commissioner, the Assessing Officer modified his earlier order granting refund by withdrawing the interest of ₹ 2,15,73,710/-. Consequently, he issued the notice dated 16.3.2016 directing the petitioner to pay up the said sum. 9. These orders the petitioner has challenged in these petitions. Learned counsel, Mr.J.P.Shah, appearing for the petitioner raised following contentions; (i) The Commissioner had no authority to pass the said order advising Assessing Officer to withdraw the interest since the reference in a rectification proceedings would not be maintainable; (ii) In any case, this was not an issue which could have been examined in the rectification proceedings since no error apparent on the records was committed by the Assessing Officer w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -half per cent for every month or part of a month comprised in the period,- (i) from the 1st day of April of the assessment year to the date on which the refund is granted, if the return of income has been furnished on or before the due date specified under sub-section(1) of Section 139; (ii) from the date of furnishing of return in income to the date on which the refund is granted, in a case not covered under sub-clause (i) ; (aa) where the refund is out of any tax paid under section 140A, 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, from the date of furnishing of return of income or payment of tax, which ever is later, to the date on which the refund is granted. Provided that no interest under clause (a) or clause (aa) shall be payable, if the amount of refund is less than 10 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 [onehalf 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion in the first place. The issue was not one where it can be stated that there was an error apparent on the record which can be corrected in exercise of limited powers of rectification. As is well settled, power of rectification under Section 154 of the Act cannot be equated with the power of review. It necessarily vests Assessing Officer with limited power of correcting errors apparent on the record. When detailed consideration and examination of facts and law is necessary, the issue would not fall within the scope of rectification proceedings. 16. We would also examine the order of the Commissioner on merits. As noted, according to the Commissioner the assessee had raised a belated claim during the course of the assessment proceedings which resulted into delay in granting of refund and therefore, the assessee was not entitled to interest for the entire period from the first date of assessment year till the order giving effect to the appellate order was passed. We cannot uphold the view of the Commissioner. First and foremost requirement of sub-section (2) of Section 244A is that the proceedings resulting into refund should have been delayed for the reasons attributable to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 244A provides that the assessee shall not be entitled to interest for the period of delay in issuing the proceedings leading to the refund that is attributable to the assessee. In other words, if the issue of the refund order is delayed for any period attributable to the assessee, then the assessee shall not be entitled to interest for such period. This is of course an exception to clauses (a) and (b) of section 244A(1) of the Act. In other words, if the issue of the proceedings, that is, refund order, is delayed for any period attributable to the assessee, then the assessee is not entitled to interest of such period. Further, what is clear from sub-section (2) is that, if the officer feels that delay in refund for any period is attributable to the assessee, the matter should be referred to the Commissioner or Chief Commissioner or any other notified person for deciding the issue and ordering exclusion of such periods for the purpose of granting interest to the assessee under section 244a(1) of the Act. In this case, there was no decision by the Commissioner or Chief Commissioner on this issue and so much so, we do not think the Assessing Officer made out the case of delay in re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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