TMI Blog2024 (3) TMI 1013X X X X Extracts X X X X X X X X Extracts X X X X ..... of Section 4, paid any amount under their Act, 1961 in respect of his tax arrears which exceeds the amount payable under Section 3, shall be entitled to a refund of such excess amount. Such a declarant is not be entitled to interest on such excess amount under Section 244-A of the IT Act, 1961. Section 7 of DTVSV Act, 2020 is a complete code by itself. If the case is to be settled under it, no interest under Section 244-A of the IT Act, 1961 is available. In this case, no amount was paid by the petitioner either along with Form-1 on 31.1.2021 or after Form-3 that was issued on various dates. The petitioner wants the Designated Authority to issue a fresh Form-3 together with interest on refunds under Section 244-A of the IT Act, 1961 on belated adjustment of refunds. This is not available in view of explanation to Section 7 of the DTVSV Act, 2020. Designated Authority while issuing Form-3 has correctly acceded to refund of the amounts to the petitioner for the Assessment year 1999-2000 to 2002-2003. The Designated Authority has declined to order interest under Section 244-A of the IT Act, 1961. It is in accordance with explanation to Section 7 of the DTVSV Act, 2020. Neither the Dep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unts adjusted and appropriated towards tax liability for the Assessment Year 1999-2000 and Assessment Year 2000- 2001 under the provisions of the Direct Tax Vivad Se Vishwas Act, 2020 from and out of the refunds due for the Assessment Year 2004-05 and Assessment Year 2005-06 are treated as amount paid by the petitioner for the Assessment Year 1999-2000 and Assessment Year 2000-2001 under Direct Tax Vivad Se Vishwas Act, 2020; ii. Consequently, the Designated Authority or any other Authority in its place shall issue Form 5 to the Petitioner and close the pending case of the petitioner for the Assessment Year 1999- 2000 and Assessment Year 2000-2001; iii. Consequently, the Income Tax Department is directed to process the excess amount quantified as refundable in Section 154 orders dated 29.01.2021 for the Assessment Year 1999-2000 and Assessment Year 2000-2001 together with interest under Section 244-A of the IT Act, 1961 for Assessment Year 2004-2005 and Assessment Year 2005-2006, subject to Section 7 of the Direct Tax Vivad Se Vishwas Act, 2020; - Hon'ble Mr. Justice C. Saravanan For the Petitioner : Mr.Srinath Sridevan learned Senior Counsel for Ms.Jyotsna Sivakumar (in all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 in Form-4 by the assessee after payment of the amounts specified in Form-3. Thereafter, Order under Rule 7 in Form-5 was to be passed by the Designated Authority in terms of Section 5(2) of the DTVSV Act, 2020. The provisions of both the Act and the Rules are unambiguous and clear. They brook for no interpretation. 8. The petitioner has adjusted the refundable amounts from Assessment Year 2004-2005 and Assessment Year 2005-2006 towards the amounts payable by the petitioner under these Assessment viz., 1999- 2000 to 2002-2003 Years in Form-1 filed under DTVSV Act, 2020 and DTVSV Rules, 2020. Form-3 issued to the petitioner to the Designated Authority has also accepted the adjustments and has ordered refund of amounts to the petitioner. 9. However, the Designated Authority has declined to recognize interest under Section 244-A of the Income Tax Act, 1961 (hereinafter referred to as IT Act, 1961) to the petitioner on delayed payments/adjustments made. 10. There were multiple proceedings in the background. Main issue relating to availability of the benefit of Section 44BBB of the IT Act, 1961 was still at large before the Hon ble Supreme Court in C.A.No.4537 of 2014 for Assessment Y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting the tax liability from the refunds due for the Assessment Years 2004-2005 2005-2006 under Section 245 of the IT Act, 1961. 15. In these orders, Deputy Commissioner of Income Tax, International Taxation had also ordered interest under Section 244-A of the IT Act, 1961 for the Assessment Year 1999-2000 to 2002-2003 as detailed below:- Assessment Year 1999-2000 2000-2001 2001-2002 2002-2003 Tax Payable 1,91,27,094 6,10,72,478 17,97,89,216 7,32,13,999 Tax Refundable after adjustment of TDS, Tax paid and refund adjusted 1,40,98,933 * 2,66,63,268 * 1,96,26,212 * 8,15,79,272 * Further Interest under 244 A 1,00,80,737 1,29,64,267 2,21,50,870 10,33,75,947 Total Refundable 2,47,79,670 3,95,94,980 4,17,77,082 18,49,55,219 [*Along with Interest under Section 244-A] 16. In Form-3 issued to the petitioner for the Assessment Year 1999 2000 to Assessment Year 2002 2003, the Designated Authority has not ordered interest under Section 244-A of the IT Act, 1961 presumably in view of Explanation to Section 7 of the DTVSV Act, 2020. 17. It is the stand of the petitioner that the petitioner was not only entitled to refunds of amounts after adjustment under Section 245 of the IT Act, 1961 from and o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e-half per cent for every month or part of a month comprised in the period from the date of such application to the date on which the refund is granted. (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, whichever 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 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 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 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 date on and from which the amount of tax or penalty specialty me notice of demand issued under section 156 is paid in excess of such demand. (1A) In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or section 254 or section 260 or section 262 or section 263 or section 264 or an order of the Settlement Commission under sub-section (4) of section 245D, the amount on which interest was payable under subsection (1) 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. (4) The provisions of this section shall apply in respect of assessments for the Assessment Year commencing on the 1st day of April, 1989, and subsequent Assessment Years :] Provided that in respect of assessment of fringe benefits, the provisions of this sub-section shall have effect as if for the figures 1989 , the figures 2006 had been substituted.] 19. In Form-3, the amount of interest under Section 244-A of the IT Act, 1961 has not been ordered in view of Section 7 of the DTVSV Act, 2020. 20. Section 7 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etitioner has also submitted Form 1 under DTVSV Act, 2020, for AY 2003-2004, 2004-2005, 2005-2006 and 2006-2007, in respect of which a sum of Rs. 14,40,13,551/- is payable as per the Form 3 issued by the second respondent, pursuant to the Form 1 filed. 3. The Respondent s Counter Affidavit admits a refund of Rs. 18,19,46,506/- payable by the Department to the Petitioner for AY 1999-2000, 2000-2001, 2001- 2002, 2002-2003 even excluding the interest . 4. The petitioner is agreeable to adjust / not claim the refund for AY 1999-2000, 2000-2001, 2001-2002, 2002-2003 to the tune of Rs. 14,40,13,551/- towards payment for AY 2003-2004, 2004-2005, 2005-2006 and 2006-2007 provided that the Respondents accepts that the payments due under the existing Form 3 dated 04.03.2021 for AY 2003-2004, 2005- 2006, 2006-2007 and Form 3 dated 08.03.2021 for AY 2004-2005, are validly discharged thereby, and no further sums claimed there against. 5. This does not occasion any financial loss to the Department, and enables closure of all litigations between the Parties, save and except the dispute over interest, which will remain res integra in these Writs. 6. Accordingly, it is prayed that the above be passe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... For the aforementioned reasons, we are of the view that denial of benefit of the notification to the appellant was unfair. There can be no doubt that the authorities functioning under the Act must, as are in duty bound, protect the interest of the Revenue by levying and collecting the duty in accordance with law-no less and also no more. It is no part of their duty to deprive an assessee of the benefit available to him in law with a view to augment the quantum of duty for the benefit of the Revenue. They must act reasonably and fairly. 26. The above passage squarely applies to the facts of the present case as the department has also not disputed the fact that the petitioner has settled the dispute under the Vivad se Vishwas scheme for the Assessment Year 2011-12 as a consequence of which the tax offered and paid by the petitioner during the Assessment Year 2014-15 had become excess. 27. That apart, under Section 237 under Chapter XIX of the Income Tax Act, there is no limitation prescribed for granting refund of the amount paid in excess as tax. Therefore, I do not find any merits in the submissions made by the learned Senior Standing Counsel appearing on behalf of the respondents. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest chargeable or charged on such disputed tax and penalty leviable or levied on such disputed tax, the excess shall be ignored for the purpose of computation of amount payable. (c) Where the tax arrear relates to disputed interest or disputed penalty or disputed fee Twenty-five percent of disputed interest or disputed penalty or disputed fee. Thirty per cent of disputed interest or disputed penalty or disputed fee: Provided that in a case where an appeal or writ petition or special leave petition is filed by the income- tax authority on any issue before the appellate forum, the amount payable shall be one half of the amount in the Table above calculated on such issue, in such manner as may be prescribed: 31. The expression disputed tax and tax arrear has been defined in Section 2 of the said DTVSV Act, 2020 as follows:- Section 2(j) Direct Tax Vivad Se Vishwas Act, 2020 Section 2(o) Direct Tax Vivad Se Vishwas Act, 2020 disputed tax , in relation to an Assessment Year or financial year, as the case may be, means the income-tax, including surcharge and cess (hereafter in this clause referred to as the amount of tax) payable by the appellant under the provisions of the Income-t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... related to such tax credit or loss or depreciation in the amount of disputed tax, or to carry forward the reduced tax credit or loss or depreciation, in such manner as may be prescribed. tax arrear means, (i) the aggregate amount of disputed tax, interest chargeable or charged on such disputed tax, and penalty leviable or levied on such disputed tax; or (ii) disputed interest; or (iii) disputed penalty; or (iv) disputed fee as determined under the provisions of the Income-tax Act. 32. Under Section 3 of the DTVSV Act,2020, a declarant was required to file a declaration before the Designated Authority in accordance with Section 4 of the said Act, in respect of tax arrear as defined in Section 2(o) of DTVSV Act, 2020, before the last date. 33. Since the petitioner had pending appeals both before the Hon ble Supreme Court and Income Tax Appellate Tribunal for the these assessment years on the issue relating the taxability of the transaction, the amount payable by the petitioner is the amount of tax due sans the penalty and interest in terms of Sl. No.(a) to Table to Section 3 of DTVSV Act, 2020. 34. Thus, the amount quantified as payable under in Form -1 by the petitioner was not corr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1999-2000 and 2000-2001. The excess amount after adjustment were to be refunded along with interest under Section 244-A for the Assessment Year 1999-2000 and Assessment Year 2000-2001. The excess amount after adjustment were to be refunded along with interest under Section 244-A read with Section 245 of the IT Act, 1961 for the Assessment Year 2004-2005 and Assessment Year 2005-2006. 40. For these two Assessment Years viz., Assessment Year 1999-2000 and Assessment Year 2000-2001, there were mere adjustment of the amounts towards tax liability out of the refunds that were due to the petitioner for the Assessment year 2004-2005 and Assessment Year 2005- 2006. 41. Excess amounts after adjustments of the liability ought to have been refunded together with interest under Section 244-A of the IT Act, 1961 for the Assessment Year 2004-2005 and Assessment Year 2005- 2006, provided no applications were filed for Assessment Year 2004-2005 and Assessment Year 2005-2006 under Sl.No.(a) to Section 3 of the DTVSV Act, 2020. 42. For the Assessment Year 2001-2002 and for the Assessment Year 2002-2003, the petitioner was entitled to interest under Section 244-A of the IT Act, 1961, if no declarati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r with interest under Section 244-A of the IT Act, 1961 for Assessment Year 2004-2005 and Assessment Year 2005-2006, subject to Section 7 of the Direct Tax Vivad Se Vishwas Act, 2020; iv. W.P.No.10389 of 2021 and W.P.No.10600 of 2021 are disposed of interms of (i), (ii) (iii) as above; v. As far as Assessment Year 2001-2002 and Assessment Year 2002-2003 are concerned, the amount quantified by the Designated Authority under the provisions of the Direct Tax Vivad Se Vishwas Act, 2020 are correct; vi. Consequently, the Designated Authority or any other Authority in its place shall issue Form 5 to the Petitioner and close the pending case of the petitioner for the Assessment Year 2001- 2002 and Assessment Year 2002-2003; vii. The petitioner is not entitled to interest under Section 244-A of the IT Act, 1961 for Assessment Year 2001-2002 and Assessment Year 2002-2003, in view of Explanation to Section 7 to Direct Tax Vivad Se Vishwas Act, 2020; viii . Therefore, W.P No.10393 of 2021 and W.P.No.10395 of 2021 are liable be dismissed and are dismissed; ix . Since the petitioner has paid a sum of Rs. 15,84,14,906/- Tax amounts for the Assessment Year 2003-2004 to 2006-2007 pursuant to order ..... X X X X Extracts X X X X X X X X Extracts X X X X
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