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2014 (2) TMI 20 - HC - Income TaxApplicability of proviso section 115JAA(2) - Revision u/s 263 - Held that - The said proviso is not applicable as the present appeal relates to the assessment year 2000-01 when section 115JA was applicable - Secondly, the proviso to section 115JAA itself came to be introduced from April 1, 2006 - Decided against Revenue. Allowability of interest under section 244A - Revision u/s 263 - Held that - As against the tax payable of ₹ 2.46 crores, the tax paid by the assessee amounted to ₹ 4.24 crores after giving due adjustment for MAT credit, TDS, advance tax and self-assessment tax - The assessee was, entitled to a refund of excess tax paid for the assessment year 2000-01 over and above the tax which was computed as being due and payable - Interest under section 244A was allowable - Granting interest by the Assessing Officer under section 244A was not erroneous - When two views are possible even otherwise the provisions of section 263 cannot be invoked - The learned Income-tax Appellate Tribunal had rightly come to the correct conclusion and rightly quashed the order of the Commissioner of Income-tax under section 263 of the Act - Decided in favour of assessee.
Issues Involved:
1. Justification of the Tribunal in setting aside the order passed by the Commissioner of Income-tax under section 263. 2. Applicability of the proviso to section 115JAA(2) in the given circumstances. 3. Legality of the Tribunal's decision to uphold the Assessing Officer's allowance of interest under section 244A. 4. Whether the Tribunal was correct in holding that section 263 was not warranted as it was a case of wrong recomputation of interest. Detailed Analysis: 1. Justification of the Tribunal in Setting Aside the Order Passed by the Commissioner of Income-tax Under Section 263: The Tribunal quashed the order under section 263 of the Income-tax Act, 1961, passed by the Commissioner of Income-tax (CIT) on the grounds that the orders by the Assessing Officer (AO) dated March 30, 2001, and June 13, 2002, were neither erroneous nor prejudicial to the interests of the Revenue. The Tribunal reasoned that the interest under section 244A was rightly allowed by the AO on the excess payment of Minimum Alternate Tax (MAT) under section 115JA. The Tribunal referred to various judgments and the scheme of section 115JA, concluding that when the Department charges interest under sections 234B and 234C for delayed payments, it must also pay interest on excess payments made by the assessee under section 244A. 2. Applicability of the Proviso to Section 115JAA(2) in the Given Circumstances: The Tribunal found that the proviso to section 115JAA(2) was not applicable to the case at hand. The proviso, which states that no interest shall be payable on the tax credit allowed under sub-section (1), was introduced from April 1, 2006, and was not relevant to the assessment year 2000-01 under section 115JA. The Tribunal noted that the Commissioner of Income-tax erred in drawing an analogy from section 115JAA and its proviso, which did not apply to the year under appeal. 3. Legality of the Tribunal's Decision to Uphold the Assessing Officer's Allowance of Interest Under Section 244A: The Tribunal upheld the AO's decision to allow interest under section 244A, emphasizing that the MAT deposit made in advance under section 115JA bears the character of tax paid in advance. The Tribunal cited the principle that when the Department charges interest for delayed payments under sections 234B and 234C, it must also pay interest on excess payments under section 244A. The Tribunal referred to the Supreme Court's judgment in Joint CIT v. Rolta India Ltd., which supported the view that interest under sections 234B and 234C is applicable to MAT companies, thereby justifying the allowance of interest under section 244A on excess payments. 4. Whether the Tribunal was Correct in Holding that Section 263 was Not Warranted as it was a Case of Wrong Re-computation of Interest: The Tribunal held that section 263 was not warranted as the AO's orders were not erroneous and prejudicial to the interests of the Revenue. The Tribunal reasoned that the AO had adopted a permissible course under the law, and where two views are possible, the CIT cannot invoke section 263 simply because he disagrees with the AO's view. The Tribunal emphasized that the AO's decision to grant interest under section 244A was based on a correct interpretation of the law and supported by various judicial precedents. Conclusion: The High Court dismissed the appeal, affirming the Tribunal's decision. The Court concluded that no substantial question of law arose from the Tribunal's order. The Court supported the Tribunal's view that the AO's orders were justified, and the CIT erred in invoking section 263. The Court also noted that the proviso to section 115JAA(2) was not applicable to the assessment year in question, and the Tribunal rightly quashed the CIT's order under section 263.
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