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Issues Involved:
1. Appealability of the order of waiver of interest under sections 234A, 234B, and 234C of the Income-tax Act, 1961. 2. Entitlement of the assessee to interest under section 244A(1)(b) of the Act on the refund of waived interest under section 119(1)(b) of the Act. Issue-wise Detailed Analysis: 1. Appealability of the Order of Waiver of Interest: The Revenue contended that the CIT (Appeals) erred in entertaining the appeal regarding the waiver of interest under sections 234A, 234B, and 234C, arguing that such an order by the Chief Commissioner of Income-tax is not appealable under section 246A of the Act. The CIT (Appeals) relied on various case laws to allow the appeal, which the Revenue disputed, emphasizing that the waiver of penal interest is not a right conferred on the assessee and does not entitle the assessee to any interest on the refund of interest. The assessee argued that the order passed by the Assessing Officer, giving effect to the CIT (Appeals) for waiver of interest, is an appealable order under section 246A(1)(c) and cited provisions of sections 237, 214, and 244A of the Income-tax Act to support their claim. The Tribunal reviewed precedents, including the judgment of the Hon'ble Madras High Court in Sholingur Textiles Ltd. v. CIT [1999] 240 ITR 460 (Mad.), which held that while no appeal lies against an order refusing to grant interest under section 214 simpliciter, it is open to the assessee to challenge the order of the Assessing Officer refusing to grant interest on refund if the entire assessment is challenged. Similarly, in Triplicane Urban Co-operative Society Ltd. v. CIT [1980] 126 ITR 125 (Mad.), it was held that no appeal lies against the refusal to pay interest on refund under section 214(1), but the assessee could challenge it in an appeal against the assessment. The Tribunal concluded that the provisions of section 246A do not provide for an appeal against the exclusive refusal to grant interest. The right of appeal is a substantive right and must have clear statutory authority. Since no specific appeal is provided under section 246A for the refusal to grant interest, the Tribunal held that no appeal would lie against the order of the Assessing Officer in this context. 2. Entitlement to Interest under Section 244A(1)(b): The Tribunal examined whether the assessee is entitled to interest under section 244A on the refund of waived interest. Section 244A(1)(b) provides for interest on the refund of tax or penalty but does not explicitly mention interest on the refund of interest. The Tribunal noted that the remedy to claim interest lies with either the Assessing Officer or the Chief Commissioner of Income-tax, who has the authority to waive interest under sections 234A, 234B, and 234C. The Tribunal emphasized that the provisions of section 244A, as amended by the Direct Tax Laws (Amendment) Act, 1987, prescribe granting interest on refunds but do not explicitly cover the refund of interest waived under sections 234A, 234B, and 234C. The Tribunal suggested that the assessee could move an appropriate application to the Assessing Officer or the Chief Commissioner of Income-tax for interest on the refund, and any delay in such an application should be construed liberally. Conclusion: The Tribunal set aside the order of the CIT (Appeals), holding that no appeal lies against the order of the Assessing Officer refusing to grant interest on the refund of waived interest under sections 234A, 234B, and 234C. The Revenue's appeal was allowed, and the assessee was advised to seek remedy through an application to the appropriate authorities.
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