2016 (7) TMI 1335 - AT - Income Tax

Interest under section. 244A calculation - whether the interest portion of the refund issued earlier was to be ignored for the purpose of calculating interest under section 244A of the Act, while determining the refund arising out of the order giving effect to the appellate order? - Held that - In the assessee s own case for various assessment years namely, 1991-92,1997-98,1999-2000,2007-08 and 2008-08 2015 (2) TMI 152 - ITAT MUMBAI wherein identical controversy has been adjudicated in favour of the assessee. The CIT(A) following the aforesaid precedents correctly upheld the plea of the assessee and directed the Assessing Officer to calculate the interest payable to the assessee under section 244A without reducing the interest under section 244A, which was a part of the refund earlier granted. - Decided in favour of assessee.

Summary

Issues:
1. Interpretation of Section 244A of the Income Tax Act, 1961 regarding the calculation of interest on refunds.
2. Whether the interest portion of the refund issued earlier should be ignored for calculating interest under Section 244A.

Analysis:
1. The appeal before the Appellate Tribunal ITAT Mumbai involved a dispute related to the assessment year 2008-09. The Revenue challenged an order passed by the CIT(A)-4, Mumbai, dated 09/03/2015, arising from an order under section 250 of the Income Tax Act, 1961.

2. The primary issue raised by the Revenue in the appeal was the interpretation of Section 244A of the Income Tax Act, 1961. The dispute centered around whether the interest portion of the refund issued earlier should be excluded when calculating interest under Section 244A for refunds resulting from an appellate order.

3. The respondent, a Public Sector Bank, contended that the interest under section 244A should not be reduced by the interest portion of the refund issued earlier. The Assessing Officer had determined a refund with interest due to the assessee under section 244A, but the assessee argued for a higher interest amount.

4. The CIT(A) relied on precedents from the Tribunal in the assessee's own case for previous assessment years. Following the Tribunal's decisions in favor of the assessee in similar controversies, the CIT(A) upheld the plea and directed the Assessing Officer to calculate the interest payable under section 244A without reducing the interest previously granted.

5. During the Tribunal proceedings, both parties acknowledged that the Tribunal's previous order, dated 31/12/2014, which supported the assessee's position, remained unaltered by any higher authority. Consequently, the Tribunal affirmed the CIT(A)'s decision based on the existing precedent, leading to the dismissal of the Revenue's appeal.

6. The Tribunal, comprising G. S. Pannu (Accountant Member) and Amarjit Singh (Judicial Member), pronounced the order on 22/07/2016, dismissing the Revenue's appeal and upholding the decision of the CIT(A) regarding the calculation of interest under Section 244A of the Income Tax Act, 1961.