2016 (1) TMI 1353 - HC - Income Tax

Date for reckoning the interest on refund under Section 244A(1)(b) - the subsequent decision in Engineers India (supra) by a DB of the same bench strength cannot co-exist with the decision in Sutlej Industries Ltd. (supra) and that there is a conflict brought about as a result of the two decisions which cannot be resolved except by referring it to a larger Bench of the three learned Judges of this Court. - matter referred for decision to the larger Bench.

Summary

Issues:
1. Interpretation of Section 244A of the Income Tax Act, 1961 regarding interest on refund of self-assessment tax.
2. Determination of the date from which interest on refund under Section 244A(1)(b) is to be awarded.

Analysis:
1. The appeals under Section 260A of the Income Tax Act were directed against a common order passed by the Income Tax Appellate Tribunal for the Assessment Years 1994-95 and 1995-96. The questions framed initially were later re-framed by the Court to address whether the Assessee is entitled to interest under Section 244A on self-assessment tax paid, which later became refundable due to assessment, and the appropriate date from which such interest should be paid.

2. The Assessee relied on various court decisions and circulars to support their claim for interest on the refund. The Revenue, on the other hand, cited different judgments to counter the Assessee's argument. The Court noted conflicting decisions by different benches of the same Court on similar issues, emphasizing the need for a larger bench to resolve the conflict.

3. The Court highlighted the importance of a Supreme Court judgment clarifying that only interest provided for under the statute can be claimed by an assessee from the Revenue. The Court found that the Supreme Court's decision did not directly address the specific questions raised in the present case or in the earlier case involving the same Assessee. As a result, the Court concluded that the conflicting decisions necessitated a reference to a larger bench for resolution.

4. Considering the conflicting decisions by different benches and the unresolved issues following the Supreme Court's judgment, the Court referred the re-framed questions to a larger bench of three learned Judges for a comprehensive decision. The Court emphasized the need for clarity on the interpretation of Section 244A and the appropriate date for awarding interest on refunds, ultimately seeking resolution through a larger bench to address the conflicting precedents effectively.

This detailed analysis of the judgment provides a comprehensive overview of the issues involved, the arguments presented by both parties, and the Court's decision to refer the matter to a larger bench for resolution.