TMI Blog2024 (2) TMI 930X X X X Extracts X X X X X X X X Extracts X X X X ..... unt of refund must mean, in our view, the whole of the refund, and not an artificial split as canvassed by the Department. Therefore, irrespective of what the words regular assessment mean, the proviso would not be attracted. The words amount of refund must be given their natural/neutral meaning and must, therefore, mean whole of the refund. These words must not be read as permitting an artificial split of the amount into various components of advance tax, TDS, SA Tax and tax paid pursuant to demand. This Court, in J.K. Industries V/s. Krishna Sahal, Commissioner of Income Tax [ 2023 (6) TMI 1037 - BOMBAY HIGH COURT] wherein the word amount in the context of interest payable under the old Section 244A(1A) of the Act was interpreted, held, as being a neutral expression wide enough to include even the interest collected by the Department alongwith the tax and it was consequently held that appellant therein was entitled to interest on the aggregate amount. If the Revenue s contention that appellant is entitled to interest on advance tax and TDS under Section 244A(1)(b) of the Act is to be upheld, then appellant would be entitled to interest from the date of actual pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment order before the Commissioner of Income Tax (Appeals) [CIT(A)] who, by an order dated 29th January 1993, disposed the appeal. The Assessing Officer on 31st May 1993 passed an order giving effect (OGE) to the CIT(A) s order computing income of appellant at Rs. 35,93,17,870/-, i.e., even below the originally returned income of Rs. 43,64,37,800/- and determining tax thereon at Rs. 18,99,09,619/-. In the circumstances, appellant was entitled to a refund of Rs. 5,24,29,950/-. Given that the income determined pursuant to the CIT(A) s order was lower than the returned income, the refund necessarily included, not only taxes appellant paid pursuant to demands raised by the Assessing Officer under the assessment framed but also a portion of the advance tax, TDS and self assessment tax paid on the returned income. Herein below is a table of returned income and refund due : Sr. No. Particulars Actual Amount 1 Returned income 43,64,37,800 2 Tax paid on returned income : Advance tax + TDS : 450 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held that interest should be granted only from the date of regular assessment (and not earlier) as otherwise it would amount to granting interest specifically declined under Section 244A(1)(a) of the Act. This finding of the CIT(A) has also been accepted by the Department. 7. Appellant carried the matter in appeal before Income Tax Appellate Tribunal (ITAT). The Tribunal, by the impugned order dated 5th December 2002, relying on the order of the Hon ble Calcutta High Court in Kooka Sidhwa Co. V/s. Commissioner of Income Tax (1964) 54 ITR 54 (Calcutta), dismissed the appeal holding that the words regular assessment meant the assessment pursuant to the CIT(A) order. 8. The Assessing Officer/CIT(A) have based their conclusion that the advance tax and TDS component in the amount of refund is hit by the proviso to Section 244A(1)(a) of the Act, on the following working : a. Income as per original return (returned income) 43,64,37,800 b. Income determined after CIT(A) Order 35,93,17,870 c. Tax paid on returned inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovided that no interest shall be payable if the amount of refund is less than ten 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 one [***] 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 the tax or penalty to the date on which the refund is granted. Explanation . For the purposes of this clause, date 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 shall be decided by the Chief Commissioner or Commissioner whose decision thereon shall be final. (3) Where, as a result of an order under [sub-section (3) of secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner of Income Tax (2017) 81 taxmann.com 111 (SC) held that it is a cardinal principal of interpretation that the words in a statute must be given their natural and ordinary meaning. This Court, in J.K. Industries V/s. Krishna Sahal, Commissioner of Income Tax (2023) 153 taxmann.com 523 (Bombay) wherein the word amount in the context of interest payable under the old Section 244A(1A) of the Act was interpreted, held, as being a neutral expression wide enough to include even the interest collected by the Department alongwith the tax and it was consequently held that appellant therein was entitled to interest on the aggregate amount. 13. The submission of Ms. Goel that Advance Tax and TDS component in the amount of refund is hit by proviso of Section 244(1)(a) of the Act is fallacious. According to Ms. Goel, since, out of the refund Advance Tax/TDS component is only Rs. 1,45,14,457/- and that being less than Rs. 1.89 Crores being 10% of the tax liability, whether pre or post CIT(A) order, i.e., Rs. 24,35,95,193/- or Rs. 18,99,09,619/-, it will be hit by the proviso. We cannot accept this submission because if that is the way we have to read, the proviso would have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Modi Industries Ltd. V/s. Commissioner of Income Tax (1995) 82 Taxman 377 (SC) to submit that advance tax and TDS lose their character as such on the framing of an assessment and, therefore, Section 244A(1)(a) of the Act is inapplicable. In this regard we shall note firstly , the Hon ble Apex Court in Modi Industries (Supra) was concerned with interpretation of the provisions of old law, i.e., the law as it stood prior to 1st April 1989. Significant changes were introduced in the Act replacing the law then existing (w.e.f., from 1st April 1989) to specifically to overcome the inequities prevalent under the old law, as explained in the Circular No. 549 dated 31st October 1989 explaining the provisions of Direct Tax (Amendment) Act, 1987. In the circumstances, the decision in Modi Industries (Supra) can be of no assistance to decide the controversy in the present case which is concerned with the amended law. Secondly , the submission of the Revenue and its reliance on findings in Modi Industries (Supra) would only mean that appellant would be entitled to interest for the whole of the amount refunded, i.e., Rs. 5,24,29,950/- under Section 244A(1)(b) of the Act in which cas ..... X X X X Extracts X X X X X X X X Extracts X X X X
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