TMI Blog2021 (8) TMI 922X X X X Extracts X X X X X X X X Extracts X X X X ..... AT MUMBAI] and DCIT vs. Peerless General Finance Investment Co. Ltd. [ 2017 (8) TMI 237 - ITAT KOLKATA] - Thus a refund issued to the assessee on various dates has to be first adjusted against the interest due on the income tax and thereafter against the principal amount. Accordingly, we set aside the order of Ld. CIT(A) and direct the AO to make adjustment of refund as indicated above. - Decided in favour of assessee. - ITA No.4678/M/2019 - - - Dated:- 22-7-2021 - Shri Rajesh Kumar, Accountant Member And Shri Amarjit Singh, Judicial Member For the Assessee : Shri Neeraj Sheth, A.R. For the Revenue : Shri Satya Pinisetty, D.R. And Shri Brajendra Kumar, D.R. ORDER PER RAJESH KUMAR, ACCOUNTANT MEMBER: The pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 against the order dated 12.04.2018 requesting the AO that the amount of refund issued to the assessee on various dates such as 31.07.1990, 29.11.1991 and 15.10.2007 should first be adjusted towards interest receivable under 244A of the Act as on that date and balance amount if any should be adjusted against the tax receivable by the assessee. In defence of his arguments, the assessee relied on the decision of the co-ordinate bench of the Tribunal of Mumbai Bench in the case of UOI vs. ACIT (2016) 521 ITR(T) 221. Noteworthy to state that while making the above rectification application, the assessee has not claimed interest on interest receivable u/s 244A of the Act. The AO again rejected the rectification application moved under section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Gujarat Fluoro Chemicals (supra) has no bearing on the instant case since that case dealt with the issue whether interest on interest can be allowed to an assessee, whereas the Appellant has not made a claim of interest on interest but has merely requested that the proper method of adjustment of refund be followed, namely, the refund should first be adjusted against the interest and thereafter against the tax. It is well settled that refund granted by the tax department has to be first adjusted against the interest and thereafter against tax amount refundable to the assessee. The ld counsel in his defense placed reliance on the following decisions: a. Union of India v/s. ACIT [2016] 72 taxmann.com 348; b. DCIT v/s. State Bank of Sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat interest granted on various dates should first be adjusted against the interest on income tax refund and thereafter if balance remaining any should be adjusted against the principal amount of tax due to the assessee by way of refund. The Ld. CIT(A) dismissed the appeal of the assessee by just mentioning that the issue is debatable one and can not be decided at this point under section 154 of the Act and thus upheld the order of the AO. However, we find that the adjustment of refund issued earlier has to be adjusted against the interest and only thereafter against the principal amount of tax. The issue is squarely covered by the various decisions cited by the Ld. A.R. during the course of hearing namely; Union of India vs. ACIT (supra), ..... X X X X Extracts X X X X X X X X Extracts X X X X
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