2019 (9) TMI 1626 - AT - Income Tax

Granting the Interest u/s 244A - Refund claim - HELD THAT - Co-ordinate bench of Mumbai Tribunal in assessee s own case in Indo-Gulf Corporation Ltd. 2017 (1) TMI 1779 - ITAT MUMBAI while relying upon the decision of Lucknow Bench in assessee s own case cited 2011 (7) TMI 1322 - ITAT LUCKNOW decide the issue in favour of assessee holding that interest under section 244A has to be granted till date of issuance of refund voucher - Decided in favour of assessee. Interest on the interest - Assessee has fairly conceded that this ground of appeal is covered against the assessee by the decision of Hon ble Delhi High Court in CIT vs. Engineers India Ltd. 2015 (3) TMI 110 - DELHI HIGH COURT - Hence this ground of appeal is dismissed.on the interest.

Summary

Issues:
1. Granting of interest u/s 244A
2. Calculation of interest till the date of refund voucher
3. Entitlement to interest on interest
4. Decision on interest on the interest claim

Analysis:

Issue 1: Granting of interest u/s 244A
The appellant contested the order of the Commissioner of Income Tax (Appeals) for not granting interest u/s 244A as per the Income Tax Act. The appellant argued that the Mumbai Tribunal had ruled in favor of the assessee in a similar case. The Tribunal examined the submissions and previous decisions, directing the Assessing Officer to allow interest on the refund until the date of the refund voucher, as per the decision of the Lucknow Bench. Consequently, Grounds No. 1 to 3 were allowed in favor of the assessee.

Issue 2: Calculation of interest till the date of refund voucher
The appellant also challenged the decision regarding the calculation of interest up to the date of the refund voucher. The Assessing Officer had denied this claim based on a Rajasthan High Court ruling. However, the Tribunal, following the Mumbai Tribunal's decision, held that interest under section 244A should be granted until the issuance of the refund voucher. Therefore, the Tribunal directed the Assessing Officer to allow interest on the refund until the date of the refund voucher, in line with the decision of the Lucknow Bench.

Issue 3: Entitlement to interest on interest
The appellant contended that they were entitled to interest on the interest withheld by the Department, citing a judgment of the Supreme Court. However, the Assessing Officer rejected this claim, stating that the statutory provisions did not provide for interest on interest. The Tribunal dismissed this claim, concurring with the Assessing Officer's decision.

Issue 4: Decision on interest on the interest claim
The Tribunal addressed the appellant's claim for interest on the interest, which was found to be against the assessee based on a decision of the Delhi High Court. Consequently, Ground No. 4 was dismissed.

In conclusion, the Tribunal partly allowed both appeals of the assessee, directing the Assessing Officer to grant interest on the refund until the date of the refund voucher. The decision was pronounced in the open court on 18/09/2019.