2018 (10) TMI 242 - AT - Income Tax

Interest u/s 244A - refund granted into tax refund and interest refund and adjusted the tax refund from tax refund due and interest refund from interest refund due - CIT(A) ought to have adjudicated the issue even when the rectification petition was pending - Held that - We find that the issue has already been adjudicated by the Tribunal in assessee s own case 2016 (8) TMI 688 - ITAT MUMBAI . Therefore, without delving much deeper into the issue, AO is directed to re-compute the amount refundable to the assessee in terms of the decision of this Tribunal for AY 2008-09 by disposing-off application u/s 154 filed by the assessee. The assessee is directed to file the necessary computations / details in this regard. Needless to add that the assessee shall not be entitle for any interest on interest, whatsoever, in terms of the cited decision of COMMISSIONER OF INCOME TAX, GUJARAT VERSUS GUJARAT FLOURO CHEMICALS 2012 (8) TMI 740 - SUPREME COURT Interest u/s 244A for the month of payment of tax or granting of refund has not been provided to the assessee as against specific provisions for the same in Rule 119A - AO is directed to consider the same in the light of Rule 119A. This ground for both the years stand allowed for statistical purposes. Not set off correct amount of brought forward losses as finally ascertained consequential to the orders of appellate authorities - Held that - We find that the assessee has already filed rectification application dated 13/12/2016 against the same. We find the adjustment to be consequential in nature and therefore direct the Ld. AO to consider the same in the light of application u/s 154 filed by the assessee. This ground stand allowed for statistical purposes.

Summary

Issues:
1. Correct computation of interest u/s 244A for Assessment Years 2003-04, 2007-08, 2009-10 & 2010-11.
2. Adjustment of refund granted to the assessee.
3. Set off of brought forward losses.

Issue 1: Correct Computation of Interest u/s 244A (AY 2003-04):

The appeal and cross-objection for AY 2003-04 revolve around the correct computation of interest u/s 244A. The assessee contended that the CIT(A) should have decided the issue on merits instead of leaving it pending. The Revenue argued that the issue became infructuous due to a Supreme Court decision in favor of the Revenue. The Tribunal considered the arguments and cited a previous decision in the assessee's case for AY 2008-09. The Tribunal directed the Assessing Officer to re-compute the refund by adjusting it first towards the interest component and then towards the tax component, in line with previous judicial decisions.

Issue 2: Adjustment of Refund (AYs 2007-08, 2009-10 & 2010-11):

For AYs 2007-08, 2009-10, and 2010-11, both the assessee and the Revenue raised identical grounds regarding the adjustment of refunds. The Tribunal directed the Assessing Officer to dispose of the issues similarly, in line with the decision for AY 2003-04. Additionally, specific provisions in Rule 119A were to be considered for interest u/s 244A, and adjustments for brought forward losses were to be made in accordance with rectification applications filed by the assessee.

Issue 3: Set Off of Brought Forward Losses (AY 2007-08):

In AY 2007-08, the assessee was aggrieved by the incorrect set off of brought forward losses by the AO. The Tribunal found the adjustment to be consequential and directed the AO to consider the rectification application filed by the assessee for the correct set off. This issue was allowed for statistical purposes.

In conclusion, the Tribunal allowed all appeals and cross-objections for statistical purposes, directing the Assessing Officer to re-compute refunds and make necessary adjustments in accordance with the relevant legal provisions and previous judicial decisions. The order was pronounced on 3rd October 2018 by the Appellate Tribunal ITAT Mumbai.