9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2013 (9) TMI 478 - AT - Income TaxInterest u/s 244A(b) - Rectification of error in assessment done - whether interest u/s 244A is to be paid on on self-assessment tax paid ignoring the Explanation section 244A(b) - CIT allowed interest on refund - Held that - Even though the short title to s. 140A reads as self-assessment, the charging phrase employed in s. 140A, namely, where any tax is payable on the basis of any return required to be furnished under s. 115WD or s. 115WH or s. 139 or s. 142 or s. 148 or s. 153A, as the case may be, the assessee shall be liable to pay such tax together with interest payable under any provision of this Act for any delay in furnishing the return, makes it clear that there is no difference between (i) the tax paid under s. 115W , which deals with advance tax in respect of fringe benefits; or (ii) the tax collected at source under s. 206C; or (iii) any tax paid by way of advance tax or any tax treated as paid under s. 199, which deals with credit for tax deducted, which are provided under s. 244A(1)(a). That apart, the law is well-settled that even for the refund of tax paid under s. 140A on self-assessment, the assessee is entitled to interest. It is also trite law that wherever the assessee is entitled to refund, there is a statutory liability on the Revenue to pay interest on such refund on general principles to pay interest on sums wrongfully retained - following decision of CIT v/s Cholamandalam Investment 7 Finance Co. Ltd. 2007 (6) TMI 69 - HIGH COURT , MADRAS - Decided against Revenue.
Issues Involved:
1. Non-granting of interest under section 244A of the Income Tax Act on self-assessment tax paid. 2. Applicability of various judicial precedents regarding interest on refunds of self-assessment tax. Detailed Analysis: Issue 1: Non-granting of interest under section 244A of the Income Tax Act on self-assessment tax paid The Revenue challenged the order of the Commissioner (Appeals) directing the Assessing Officer (AO) to grant interest under section 244A on self-assessment tax paid by the assessee. The AO had denied this interest, citing the Explanation to section 244A(b), which presupposes the payment of tax or penalty consequent to a notice of demand issued under section 156. The assessee, a public limited company engaged in manufacturing and selling various products, had filed its return of income for the assessment year 2007-08, declaring substantial income and paying self-assessment tax. During the assessment, certain mistakes were rectified, but the AO did not grant interest on the self-assessment tax refund. Issue 2: Applicability of various judicial precedents regarding interest on refunds of self-assessment tax The Commissioner (Appeals) directed the AO to grant interest under section 244A, relying on several judicial decisions from High Courts and the Supreme Court, which held that assessees are entitled to interest on self-assessment tax refunds. The relevant decisions included: - CIT v/s Vijaya Bank (Karnataka High Court) - Sutlej Industries Ltd. v/s CIT (Delhi High Court) - CIT v/s Cholamandalam Investment and Finance Co. Ltd. (Madras High Court), affirmed by the Supreme Court in CIT v/s HEG Ltd. These precedents established that interest under section 244A is payable on refunds of self-assessment tax from the date of payment to the date of refund. The rationale is that any excess payment of tax by the assessee, whether through advance tax, TDS, or self-assessment, should be refunded with interest, as these funds were wrongfully retained by the government. Judgment: The Tribunal, after considering the facts and the relevant judicial precedents, upheld the Commissioner (Appeals)'s order. It concluded that the issue of granting interest under section 244A on self-assessment tax is well-settled by various judicial decisions, including those of the Supreme Court. The Tribunal cited key judgments, such as: - CIT v/s Sutlej Industries Ltd. (Delhi High Court) - CIT v/s Vijaya Bank (Karnataka High Court) - CIT v/s Cholamandalam Investment & Finance Co. Ltd. (Madras High Court), affirmed by the Supreme Court These decisions collectively affirmed that interest is payable on refunds of self-assessment tax from the date of payment to the date of refund. Consequently, the Tribunal dismissed the Revenue's appeal, affirming that the assessee is entitled to interest under section 244A on the refund of self-assessment tax paid under section 140A. Conclusion: The Tribunal's decision reaffirms the principle that assessees are entitled to interest on refunds of self-assessment tax, aligning with established judicial precedents. The Revenue's appeal was dismissed, and the AO was directed to grant interest under section 244A on the self-assessment tax refund.
|
