2019 (2) TMI 1589 - HC - Income Tax

Eligibility to Interest u/s. 244A - self assessment tax refunded to the assessee - Self assessment tax as voluntarily paid by the assessee and not pursuant to a notice of demand issued u/s. 156 - HELD THAT - The impugned order of the Tribunal has held that the Assessee is entitled to interest u/s 244A on the refund of the excess self assessment tax paid by it. This by following the decision of this Court in Stock Holding Corporation of India Ltd., v/s. N. C. Tewari, Commissioner of Income Tax & Others 2014 (11) TMI 899 - BOMBAY HIGH COURT - No substantial question of law. Interest u/s 244A allowed on the self assessment tax refunded to the assessee - grievance of the Revenue that order of the Tribunal erred in ignoring the decision of CIT v/s. Engineers India Ltd., 2015 (3) TMI 110 - DELHI HIGH COURT while allowing the appeal of the Assessee - HELD THAT - The grievance of the Revenue is unsustainable in law. This is so, as the Tribunal is bound by the decision of the jurisdictional High Court as held in East India Commercial v/s. Collector of Customs 1962 (5) TMI 23 - SUPREME COURT OF INDIA and in CIT v/s. Thane Electricity Supply Co. Ltd. 1993 (4) TMI 37 - BOMBAY HIGH COURT - No fault can be found with the impugned order of the Tribunal in allowing the Assessee s appeal by following the decision of this Court in Stock Holding Corporation 2014 (11) TMI 899 - BOMBAY HIGH COURT . It may also be pointed out in passing, that the decision of the Delhi High Court in Engineering India Ltd. has been set aside by the Apex Court in Engineers India Ltd., v/s. CIT 2017 (7) TMI 873 - SUPREME COURT - Decided against revenue

Summary

Issues:
1. Interpretation of Section 244A of the Income Tax Act regarding interest on self-assessment tax refund.
2. Consideration of decisions by different High Courts on the same issue.

Analysis:

Issue 1: Interpretation of Section 244A of the Income Tax Act regarding interest on self-assessment tax refund.

The appeal before the Bombay High Court involved a question regarding the entitlement of interest under Section 244A of the Income Tax Act on the refund of excess self-assessment tax paid by the assessee. The Tribunal had allowed the interest based on the decision in Stock Holding Corporation of India Ltd. v/s. N. C. Tewari. The Court found that this issue did not raise any substantial question of law and, therefore, did not entertain it.

Issue 2: Consideration of decisions by different High Courts on the same issue.

Regarding the second question raised in the appeal, the Revenue contended that the Tribunal erred in ignoring the decision of the Delhi High Court in CIT v/s. Engineers India Ltd. The Court clarified that the Tribunal is bound by the decision of the jurisdictional High Court, as established by previous judgments. As the Delhi High Court decision had been set aside by the Apex Court and remanded for fresh consideration, the Court found no fault with the Tribunal's decision to follow the precedent set by the Bombay High Court in Stock Holding Corporation. Consequently, the Court concluded that this issue also did not raise any substantial question of law and, therefore, was not entertained.

In the final judgment, the Bombay High Court dismissed the tax appeal, affirming the Tribunal's decision on the entitlement of interest under Section 244A of the Income Tax Act on the self-assessment tax refund. The Court's analysis highlighted the importance of following jurisdictional High Court decisions and established precedents in tax matters.