2015 (11) TMI 752 - AT - Income Tax

Interest u/s. 244A - whether interest arising out of order giving effect by the Assessing Officer is consequential, therefore, it is not an appealable order? - Held that - The order resulting in payment of interest u/s 244A of the Act is appealable. We are of the considered view that the Commissioner of Income Tax (Appeals) has erred in not adjudicating the appeal of the assessee on merits. We deem it appropriate to remit the file back to the Commissioner of Income Tax (Appeals) with a direction to decide the issues raised by the assessee in first appeal on merits, in accordance with law. See CIT Vs. Biswanath Pasari 2015 (2) TMI 812 - CALCUTTA HIGH COURT - Decided in favour of assessee for statistical purpose.

Summary

Issues Involved:
1. Appealability of the Order Giving Effect passed by the Assessing Officer.
2. Excess interest collected under section 220(2).
3. Withdrawal of interest received under section 244A twice.
4. Short grant of interest under section 244A.
5. Interest under section 244A on refund amounts.
6. Interest under section 244A on delayed interest.

Detailed Analysis:

1. Appealability of the Order Giving Effect passed by the Assessing Officer:
The primary issue was whether the Order Giving Effect passed by the Assessing Officer, which resulted in the computation of interest under section 244A, is an appealable order. The assessee contended that the Commissioner of Income Tax (Appeals) erred in holding that such an order is not appealable. The assessee relied on the decision of the Hon'ble Bombay High Court in Caltex Oil Refining (India) Ltd. vs. CIT, which held that orders related to interest under section 214 are appealable. The Tribunal found merit in the assessee's submission and referenced various judgments, including CIT vs. Biswanath Pasari and CIT vs. T.V. Sundaram Iyengar & Sons Ltd., which supported the view that orders concerning interest under sections 214 and 244A are appealable. Consequently, the Tribunal held that the order resulting in payment of interest under section 244A is indeed appealable and remitted the file back to the Commissioner of Income Tax (Appeals) to decide the issues on merits.

2. Excess interest collected under section 220(2):
The assessee argued that the Commissioner of Income Tax (Appeals) erred in confirming the order of the Assessing Officer, which did not reverse the excess interest charged under section 220(2) amounting to Rs. 1,408,646. The Tribunal did not provide a specific ruling on this issue within the document, as it was contingent upon the primary issue of the appealability of the order. The matter was remitted back to the Commissioner of Income Tax (Appeals) for reconsideration on merits.

3. Withdrawal of interest received under section 244A twice:
The assessee contended that the Commissioner of Income Tax (Appeals) erred in confirming the order of the Assessing Officer, which withdrew interest of Rs. 723,209 under section 244A twice. The Tribunal recognized this issue but deferred specific adjudication, directing the Commissioner of Income Tax (Appeals) to address it on merits upon remand.

4. Short grant of interest under section 244A:
The assessee claimed that the Commissioner of Income Tax (Appeals) erred in confirming the short grant of interest amounting to Rs. 2,414,502 under section 244A. The Tribunal acknowledged the issue and directed the Commissioner of Income Tax (Appeals) to adjudicate this matter on merits upon remand.

5. Interest under section 244A on refund amounts:
The assessee argued that the Commissioner of Income Tax (Appeals) erred in confirming the order of the Assessing Officer, which did not grant interest under section 244A on a refund of Rs. 2,131,855. The Tribunal noted this issue and remitted it back to the Commissioner of Income Tax (Appeals) for a decision on merits.

6. Interest under section 244A on delayed interest:
The assessee contended that the Commissioner of Income Tax (Appeals) erred in confirming the order of the Assessing Officer, which did not grant interest on the delay in granting the additional amount of interest of Rs. 2,414,502 under section 244A. The Tribunal deferred specific adjudication and directed the Commissioner of Income Tax (Appeals) to address this issue on merits upon remand.

Conclusion:
The Tribunal allowed the appeal of the assessee for statistical purposes and remitted the file back to the Commissioner of Income Tax (Appeals) with directions to decide the issues raised by the assessee on merits, in accordance with the law. The order was pronounced on October 21, 2015.