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2017 (9) TMI 799 - AT - Income TaxGrant interest u/s 244A(1)(b) on self assessment tax - paid from the date of assessment order OR from the date of payment of self assessment tax - Held that - As per the decision of the Hon ble Bombay High Court in the case of The Stock Holding Corporation Of India Ltd. (2014 (11) TMI 899 - BOMBAY HIGH COURT) and Calcutta High Court in the case of Birla Corporation Limited (2016 (2) TMI 470 - CALCUTTA HIGH COURT ), we are of the view that refund u/s 244A(1)(b) of the Act on self assessment tax is to be paid from the date of payment of self assessment tax till the date of grant of refund. The appeal of assessee is allowed and that of the Revenue is dismissed.
Issues Involved:
1. Interpretation of Section 244A(1)(b) of the Income Tax Act, 1961. 2. Entitlement to interest on self-assessment tax from the date of payment or the date of the assessment order. 3. Rectification of the assessment order under Section 154 of the Income Tax Act. Detailed Analysis: 1. Interpretation of Section 244A(1)(b) of the Income Tax Act, 1961: The core issue revolves around the interpretation of Section 244A(1)(b) of the Income Tax Act, 1961, which pertains to the interest on refunds. The Revenue argued that the CIT(A) erred in interpreting this provision, asserting that interest is payable only on the amount of tax paid in excess of the tax/penalty specified in the notice of demand issued under Section 156 of the Act. The Assessee contended that they were entitled to interest from the date of payment of self-assessment tax. 2. Entitlement to Interest on Self-Assessment Tax: The Assessee argued that the CIT(A) should have directed the AO to grant interest from the date of payment of self-assessment tax (28.04.2004) to the date of refund (22.02.2012). The CIT(A) had held that interest was due from the date of the assessment order, not from the date of payment of the self-assessment tax. The CIT(A) relied on the decision of the Hon'ble Bombay High Court in Sitaram vs. CIT (2012) 341 ITR 549 (Bom), which supported the view that interest on self-assessment tax should be granted from the date of the assessment order. 3. Rectification of the Assessment Order under Section 154: The Assessee filed a rectification application under Section 154, claiming that the AO had not granted interest on the refundable self-assessment tax. The CIT(A) directed the AO to grant interest under Section 244A(1)(b) from the date of the assessment order after verifying the facts. The Revenue and Assessee both appealed against this direction. Judgment: The Tribunal considered the arguments and precedents cited by both parties. The Tribunal noted the decision of the Hon'ble Bombay High Court in Stock Holding Corporation vs. NC Tewari [2015] 373 ITR 282 (Bombay), which clarified that interest should be paid from the date of payment of self-assessment tax to the date of refund. This decision aligned with the rulings of other High Courts, including the Karnataka High Court in CIT v. Vijaya Bank [2011] 338 ITR 489 and the Delhi High Court in CIT v. Sutlej Industries Ltd. [2010] 325 ITR 331. The Tribunal also referenced the Hon'ble Calcutta High Court's decision in CIT vs. Birla Corporation Ltd., which supported the view that interest on self-assessment tax should be granted from the date of payment. Conclusion: The Tribunal concluded that, based on the decisions of the Hon'ble Bombay High Court and other High Courts, the Assessee was entitled to interest on the self-assessment tax from the date of payment until the date of refund. The Tribunal directed the AO to compute and grant the interest accordingly. Consequently, the Assessee's appeal was allowed, and the Revenue's appeal was dismissed. Order Pronounced: The order was pronounced in the open court on 12-07-2017.
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