2013 (3) TMI 680 - AT - Income Tax

Summary

Issues involved: The judgment involves the issue of not granting interest u/s 244A of the Income Tax Act upon the refund of the interest levied u/s 201(1A) of the Act.

Summary:

Issue 1: Appeal against orders of Ld.CIT(A) regarding interest u/s 244A:
The appeals were filed by the assessee against three separate orders of the Ld.CIT(A) for the Assessment Years 2000-01, 2001-02, and 2002-03, challenging the non-granting of interest u/s 244A on the refunds of interest levied u/s 201(1A) of the Income Tax Act. The ITAT Mumbai held that the AO's orders u/s 201(1A) were time-barred and ordered refunds without granting interest u/s 244A. The Ld.CIT(A) held that the orders passed by the AO could not be appealed against u/s 246A and that interest u/s 244A could not be claimed directly before the CIT(A). However, the ITAT disagreed, citing precedents and statutory entitlements, and allowed the appeals, directing the AO to calculate and grant interest on the refunds.

Issue 2: Entitlement to interest u/s 244A on refunds of interest levied u/s 201(1A):
The Ld.AR contended that the assessee was entitled to interest on the refunds of interest levied u/s 201(1A), supported by various legal decisions. The Ld.DR, on the other hand, relied on the Ld.CIT(A)'s orders. The ITAT held that the assessee's right to appeal against the AO's orders giving effect to the ITAT's decision could not be denied. It emphasized that the AO was duty-bound to grant interest on refunds as per statutory provisions, and the circular cited by the Ld.CIT(A) did not apply to the case. The ITAT also clarified that the orders u/s 201(1A) were within the purview of 'assessment order' and that interest u/s 244A was admissible on the refunds.

Conclusion:
The ITAT allowed the appeals, setting aside the Ld.CIT(A)'s orders and directing the AO to calculate and grant interest u/s 244A on the refunds of interest levied u/s 201(1A) for the respective Assessment Years. The appeals filed by the assessee were allowed, and the orders were pronounced on March 6th, 2013.