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2019 (4) TMI 104 - HC - Income TaxApplicability of interest u/s 234D prior to 01.06.2003 - excess refund granted - prospective amendment - HELD THAT - The matter has already been considered by this Court as per the verdict in Commissioner of Income Tax vs. Kerala Chemicals and Proteins Ltd. 2010 (1) TMI 263 - KERALA HIGH COURT , whereby it was held that the interest under Section 234D can be levied only with effect from 1st June, 2003, i.e. with effect from the date of introduction of the provision in the statute. - Decided in favour of the Assessee
Issues:
Applicability of Section 234D of the Income Tax Act for interest on excess refund for the assessment year 2001-02. Analysis: The Revenue appealed against the Tribunal's decision regarding the applicability of Section 234D of the Income Tax Act for the assessment year 2001-02. The Assessing Officer initially finalized the assessment without applying Section 234D, stating it was prospective from 01.06.2003. However, the Commissioner of Income Tax (Appeals) reopened the assessment under Section 263, asserting the provision was applicable. The Tribunal later ruled in favor of the Assessee, holding that the provision was prospective only. This led the Revenue to appeal to the High Court. During the appeal, the High Court considered a similar issue previously addressed in Commissioner of Income Tax vs. Kerala Chemicals and Proteins Ltd., where it was established that interest under Section 234D could only be imposed from 1st June 2003, the date of its introduction in the statute. Given this precedent, the High Court found in favor of the Assessee, stating there was no substantial question of law to invoke the court's jurisdiction under Section 260A of the Income Tax Act. Consequently, the appeal was dismissed, and no interference was made in the Tribunal's decision. In conclusion, the High Court upheld the Tribunal's decision, stating that the issue was already settled in favor of the Assessee based on previous judgments. The court determined that the interest under Section 234D could only be charged from the date of its introduction in the statute, rejecting the Revenue's appeal and dismissing the case without interference.
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