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2019 (4) TMI 783 - HC - Income TaxInterest on interest u/s 244A - delay in payment of refund - Tribunal relying upon the earlier decision of Sandvik Asia Ltd., Vs. CIT 2006 (1) TMI 55 - SUPREME COURT dismissed the Revenue s Appeals - HELD THAT - The earlier Judgement of the SANDVIK ASIA LIMITED VERSUS COMMISSIONER OF INCOME-TAX AND OTHERS 2006 (1) TMI 55 - SUPREME COURT having been taken away by the later decision of Hon ble Supreme Court in the case of CIT Vs. Gujarat Fluoro Chemicals 2013 (10) TMI 117 - SUPREME COURT we remit the matter back to the learned Tribunal to decide the Appeals again in accordance with law, in view of the later decision of the Hon ble Supreme Court and the amendment of law.
Issues:
1. Whether the Tribunal was right in holding that the Revenue should pay interest on interest in the absence of inordinate delay in refund payment? Analysis: The Revenue filed Appeals under Section 260-A of the Act challenging the Tribunal's order dismissing their Appeals for the Assessment Years 1986-1987, 1989-1990 & 1990-1991 to 1994-1995. The Tribunal relied on the Supreme Court's decision in Sandvik Asia Ltd., Vs. CIT (280 ITR 643) and ruled in favor of the assessee. The Revenue contended that the Sandvik Asia Ltd. decision was overruled by a later Supreme Court decision in CIT Vs. Gujarat Fluoro Chemicals (2013) 358 ITR 291, which clarified that only interest under Section 244A of the Act can be claimed by the assessee on refunds, not interest on such statutory interest. The Court acknowledged the change in law due to the Gujarat Fluoro Chemicals judgment and remitted the matter back to the Tribunal to reconsider the Appeals in light of the updated legal position. The Appeals of the Revenue were disposed of without directly addressing the substantial question of law raised, citing the need for compliance with the amended law and the later Supreme Court decision. This judgment highlights the importance of legal precedents and statutory amendments in tax matters. It emphasizes the need for adherence to the current legal framework and the significance of Supreme Court decisions in interpreting and applying tax laws. The case underscores the dynamic nature of tax law and the necessity for judicial bodies to align their decisions with the latest legal developments to ensure fair and consistent application of tax provisions.
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