2022 (1) TMI 955 - AT - Income Tax

Disallowance of deduction claimed u/s 80IA - assessee is a resident company engaged in manufacturing of staple fibre chemicals and textiles - whether assessee s claim of deduction under section 80IA is to be allowed against gross total income or on the total income? - HELD THAT - This issue now stands squarely settled in favour of the assessee by virtue of the decision of the Hon ble Supreme Court in case of CIT vs Reliance Energy Ltd 2021 (4) TMI 1237 - SUPREME COURT While deciding identical issue the Hon ble Supreme Court has unequivocally accepted the view expressed by appellate authorities that deduction under section 80IA has to be allowed on the gross total income. In view of the aforesaid we are inclined to restore the issue to the file of the assessing officer for deciding assessee s claim of deduction under section 80IA of the Act following the ratio laid down by the Hon ble Supreme Court in the case referred to above. Granting interest u/s. 244A - Grant of refund - HELD THAT - Undisputedly order granting refund was passed by assessing officer on 09-04- 2018. Whereas the cheque for refund was actually issued on 11-05-2018. Admittedly there is a delay in issuing the refund cheque. A reading of section 244A(1) of the Act would make it clear that interest has to be allowed to the assessee till the date of grant of refund. Undisputedly the refund was actually granted to the assessee with the issuance of refund cheque through State Bank of India. The delay in grant of refund cannot be attributed to the bank as it merely acts as an agent of the department. Therefore going by the plain language of the provision of section 244A of the Act assessee is entitled for interest under section 244A of the Act till the issuance of refund cheque. In fact Central Board of Direct Taxes in circular No. 20D (XXII-22) dated 20.08.1968 holds the same position. Thus the assessee is entitled to interest under section 244A of the Act till the date of issuance of refund cheque. Grounds are allowed.

Summary

Issues:
1. Disallowance of deduction claimed under section 80IA of the Income Tax Act, 1961 for assessment years 2014-15 and 2012-13.
2. Granting interest under section 244A of the Act in accordance with provisions for the assessment year 2012-13.

Issue 1: Disallowance of deduction under section 80IA:
The appellant, a resident company engaged in manufacturing, filed returns declaring losses and book profits. The assessing officer disallowed the deduction claimed under section 80IA while computing the income due to the total income resulting in a loss. The learned Commissioner (Appeals) directed the assessing officer to follow the previous order without addressing the deduction issue. The appellant cited the Supreme Court's decision in a similar case, emphasizing that the deduction under section 80IA should be allowed on gross total income. The Tribunal agreed, citing the Supreme Court's ruling, directing the assessing officer to decide the deduction claim following the Supreme Court's decision.

Issue 2: Granting interest under section 244A:
In the assessment year 2012-13, the appellant received a refund after appealing the assessing officer's order. The appellant claimed interest under section 244A till the date of the refund cheque issuance, citing a CBDT circular. The assessing officer and the learned Commissioner (Appeals) denied the interest, stating that the online refund process takes time, and the delay in issuing the cheque was not attributable to the department. The Tribunal, however, held that interest should be granted till the date of the refund cheque issuance, as per section 244A of the Act and the CBDT circular. Citing relevant case laws, the Tribunal directed the assessing officer to grant interest accordingly.

In conclusion, the Tribunal allowed the appeals, directing the assessing officer to decide the deduction claim under section 80IA following the Supreme Court's decision and to grant interest under section 244A till the date of the refund cheque issuance for the assessment year 2012-13.