TMI Blog2023 (12) TMI 875X X X X Extracts X X X X X X X X Extracts X X X X ..... ould be entitled for interest on the unpaid refunds in accordance with the principle laid out in the aforesaid decision of Tribunal. AR during the course of hearing submitted a detailed working of the manner in which the AO has calculated the interest and also the correct way in which the same is to be calculated - Accordingly the assessing officer is directed to compute interest u/s 244A as per the claim of the assessee after giving a proper opportunity of being heard. Thus as relying on Pfizer Limited [ 1991 (3) TMI 121 - BOMBAY HIGH COURT] as well as the decision of CIT vs. K.E.C International [ 2005 (7) TMI 733 - BOMBAY HIGH COURT] assessee is justified in seeking interest u/s 244A of the Act upto the date of receipt of the refund order, i.e. 18.08.2022. Accordingly the AO is directed to re-calculate the interest up to the date of actual receipt of refund by the assessee. Interest calculation is that additional interest u/s. 244A(1A) to be calculated on the total amount of refund including Interest - The provisions of sub-section (1A) to section 244A are inserted by the Finance Act, 2016 as a remedial measure to compensate the assessee in cases where there are delays ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, the Ld. CIT(A) erred in remanding the matter to the Assessing Officer which is violative of section 251 of the Act. 2. The assessee is the principal investment holding company and promoter of Tata companies. The return of income for AY 1993-94 was filed on 31.12.1993 returning NIL income. The return was subject to assessment / reassessment and rectification over a period of time. The coordinate bench of the Tribunal through orders dated 04.02.2015 and 01.01.2016 gave relief to the assessee. The learned Deputy Commissioner of Income Tax 2(3)(1), Mumbai ( learned AO ) passed an order giving effect (OGE) dated 08.03.2016 grating the refund of Rs. 30,45,62,594 and the assessee received the said refund on 18.08.2022. The grievance of the assessee with regard to the short credit of interest is threefold as listed below (i) The AO has incorrectly adjusted the earlier refunds Interest short credited Rs 9,93,09,258/- (Ground No.2 3) (ii) The AO has not calculate the interest for the interim period from when the OGE was passed on 08.03.2016 and the actual receipt of refund i.e. 18.08.2022 Interest short credited Rs. 11,27,21,927/- (Ground No.1) (iii) The AO has not calcu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat where the amount of tax demanded is paid by the assessee then it shall first be adjusted towards interest payable and balance if any whatever tax payable. Now, if we go through section 244A, we find that no specific provision has been brought on the statute with respect to adjustment of refund issued earlier for computing the amount of interest payable by the revenue to the assessee on the amount of refund due to the assessee. Thus, the law is silent on this issue. Under these circumstances, fairness and justice demands that same principle should be applied while granting the refund as has been applied while collecting amount of tax. The Revenue is not expected to follow double standards while dealing with the tax payers. The fundamental principle of fiscal legislation in any civilised society should be that the state should treat its citizens, (ie, taxpayers in this case) with the same respect, honesty and faimess as it expects from its citizens. It is further noted by us that the hon'ble Delhi High Court has already decided this issue in clear words which has been followed by the Tribunal in assessee's own case in the earlier years. It is further noted by us that asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able on the tax amount remaining unpaid and balance towards tax component. We find that this issue is already settled in favour of the assessee by the following decisions of this Tribunal:- a. Decision in the case of Union Bank of India v. Asstt. CIT (2016) 72 taxmann.com 348/162 ITD 142 (Mum.). b. Decision in the case of Bank of Baroda v. Dy. CIT [IT Appeal No. 646 (Mum) of 2017, dated 20-12-2018) 7. In view of our aforesaid decision in the facts and circumstances of the instant case and respectfully following the judicial precedents relied upon hereinabove, the alternative argument made by the id AR on without prejudice basis, need not be gone into and no opinion is given herein and they are left open. 8. Accordingly, we direct the Id. AO to compute the correct amount of interest allowable to the assessee as directed by the id. CIT(A) as on the date of giving effect to the Tribunal's order i.e. 6-9-2013 We further hold that the refund granted on 6-9-2013 be first appropriated or adjusted against such correct amount of interest and consequently, the short fall of refund is to be regarded as shortfall of tax and that shortfall should then be considered for the purpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on such amount of refund at 3% p.a. for the period as mentioned therein. The ld AR submitted that the ITAT order, was passed on 04.02.2015 01.01.2016 and the present OGE has been passed on 08.03.2016 and refund was received on 18.08.2022. The provision of Section 244A(1A) came into effect from 01.06.2016 and hence from 01.06.2016 to 31.08.2022 there is a delay of 75 months for which the assessee is entitled for additional 3% interest under section 244A(1A). The ld AR in this regard relied on the decision of the coordinate bench in case of ACIT v/s Bharat Petroleum Corporation Ltd. (Mumbai ITAT B Bench) (30.06.2021) (ITA No. 5231 to 5233 of 2019). The ld AR further submitted that interest u/s 244A(1A) of the Act cannot be held as interest-on-interest as held by the Hon. Supreme Court and followed by High Court(s). In this regard our attention was drawn to the decision of the Hon. Delhi High Court in the case of India Trade Promotion Organization v/s CIT (06.09.2013) 38 taxmann.com 233 wherein by placing reliance on the decision of the Hon. Supreme Court of India in the case of CIT v/s. H.E.G. Ltd. (2010) 324 ITR 331, it is held that the words refund of any amount becomes due t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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