9911796707
|
Home
Issues:
Non-granting of interest under s. 244A of the IT Act. Analysis: The appeal involved a dispute regarding the non-granting of interest under s. 244A of the IT Act. Initially, the appeal was disposed of ex parte but later recalled for fresh adjudication due to the assessee being deprived of an effective opportunity of hearing. The counsel for the assessee argued that no interest had been paid on a net refund despite credit for MAT, TDS, and advance tax. The circular clarified that no interest is payable on credit allowed against MAT. However, decisions in other cases indicated that interest was allowable when a refund arose despite MAT credit. The Tribunal had previously held that no interest was payable on MAT credit, following Circular No. 763 of the CBDT. The counsel contended that the earlier order was invalid as it was passed ex parte, depriving the assessee of presenting their views. The Tribunal considered the relevant provisions of s. 115JAA of the IT Act and the circular issued by the CBDT, which stated that the credit allowed against MAT would not bear any interest. The Tribunal also examined the priority for various credits to be allowed against tax payable by the assessee. The Tribunal referred to a decision by the Delhi Bench regarding the order of priority of adjustment between TDS, advance tax, and MAT credit. The Tribunal observed that MAT credit should be given priority before TDS and advance tax. The AO had allowed MAT credit before TDS and advance tax, indicating that the refund originated from TDS and advance tax payments, entitling the assessee to interest. The Tribunal set aside the order of the CIT(A) and directed the AO to allow interest in accordance with the law. In conclusion, the appeal filed by the assessee was allowed, and they were entitled to interest under ss. 244 and 244A of the IT Act.
|
