2014 (6) TMI 5 - AT - Income Tax

Interest short granted - Entitlement of interest on the amount of interest due u/s 244A of the Act Held that - Following Supreme Court decision in CIT v/s Gujarat Fluoro Chemicals, 2013 (10) TMI 117 - SUPREME COURT - only interest provided under the statute which can alone be claimed by the assessee, and not any other interest on statutory interest - the provisions of section 244A only provides for interest on refund under various contingencies, and only the interest as provided in the statute can be claimed by the assessee and no other interest on such interest, which has been to be computed u/s 244A - the order of the CIT(A) is set aside and the matter is remitted back to the AO for computation of interest which is allowable u/s 244A Decided in favour of Aseessee.

Summary

Issues:
- Appeals challenging orders of Commissioner (Appeals) for assessment years 1997-98, 2001-02, 2002-03, and 2003-04.
- Entitlement to interest on the amount of interest due under section 244A.

Analysis:

1. Common Issue in Appeals:
The appeals were filed challenging separate orders of the Commissioner (Appeals) for various assessment years. The common issue across all appeals was the entitlement of the assessee to interest on the amount of interest due under section 244A. The appeals were consolidated due to the common issue arising from identical facts and circumstances.

2. Contention of the Assessee:
The Senior Counsel representing the assessee argued that interest on interest should be granted as the correct amount of interest on refund was not provided on time. He referred to previous High Court decisions favoring the assessee but acknowledged a recent Supreme Court decision clarifying that only interest provided under the statute could be claimed, not interest on statutory interest. The Departmental Representative also agreed with this interpretation.

3. Decision of the Tribunal:
After considering the Supreme Court's ruling in CIT v/s Gujarat Fluoro Chemicals, the Tribunal held that section 244A only allows interest on refunds under specific circumstances, and no interest on such interest can be claimed. The Tribunal set aside the orders of the Commissioner (Appeals) for the relevant assessment years and directed the Assessing Officer to compute the allowable interest under section 244A in accordance with the Supreme Court's judgment. The appeals were treated as allowed for statistical purposes.

4. Outcome:
As a result of the Tribunal's decision, the assessee's appeals for the assessment years 1997-98, 2001-02, 2002-03, and 2003-04 were allowed for statistical purposes. The judgment was pronounced in open court on 15th May 2014.