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2020 (9) TMI 1045 - AT - Income TaxNon granting interest u/s 244A - refund being the excess of tax liability on the assessed income over the taxes paid under section 143(1) - AO did not allow interest u/s 244A(1)(a) on the amount as the refund was less than 10% of the tax determined u/s 254 r.w.s. 143(3) - HELD THAT - While interpreting tax statute, the function of the court of law is not to give words in the statute a strained and unnatural meaning to cover and extent its applicability to the areas not intended to be covered under the said statute. Vidarbha Irrigation Devs. Corpn. vs. ACIT 2004 (7) TMI 67 - BOMBAY HIGH COURT It is not permissible to construe any provision of a statute, much less a taxing provision, by reading into it more words than its contains. CIT vs. Vadilal Lallubha i 1972 (8) TMI 134 - SUPREME COURT . Literal construction means that there is no room for any intendment. Nothing is to be read in, nothing is to be implied. Hence, we hold that the proviso to Clause (a) of Sub- Section (1) of Section 244A is applicable and has to be considered for computational purpose of the interest computable for the refund payable u/s 244A(1)(a). Whether interest is payable on the self-assessment tax paid by the assessee or not? - AO is hereby directed to pay interest on the refund eligible in accordance with the proviso to Section 244A(1)(a) with regard to the advance tax paid. With regard to the self-assessment tax paid, we hereby hold that the assessee is eligible for interest on the total amount of refund in accordance with provision of Section 244A(1)(b) as the bar contend in proviso to Clause (a) to Section 244A(1) is not applicable to the cases (A.Ys. 1999-2000 and 1994-95) before us. The ground no.3 of the assessee is treated as allowed. Computation of interest u/s 244A(1)(a) and Sec. 244A(1)(b) as well as Sec. 234A, Sec. 234B Sec. 234C , we hereby hold that the rule of collection of interest on the taxes due from the taxpayer would be applicable in the comparable way while paying interest to taxpayer on the refund. Assessee is eligible for interest Amount of ₹ 30,00,00,000/- paid on 31.01.2003 is eligible for interest for the month of January. Amount of ₹ 25,00,00,000/- paid on 28.02.2003 is eligible for interest for the month of February.
Issues Involved:
1. Interest under section 244A on the amount of refund. 2. Application of the proviso to section 244A(1)(a) regarding the 10% threshold. 3. Eligibility of interest on self-assessment tax under section 244A(1)(b). 4. Calculation of interest for part of a month. Detailed Analysis: 1. Interest under Section 244A on the Amount of Refund: The assessee claimed a refund of ?201,37,93,163, including advance tax, TDS, and self-assessment tax of ?14,59,79,228. The AO did not allow interest under section 244A(1)(a) on ?14.59 crores as the refund was less than 10% of the tax determined under section 254 r.w.s. 143(3). The CIT(A) confirmed this, interpreting that the limitations under section 244A(1)(a) applied. The assessee argued that interest should be granted on the refund amount, citing various judgments and statutory interpretations. 2. Application of the Proviso to Section 244A(1)(a) Regarding the 10% Threshold: The proviso to section 244A(1)(a) states that no interest is payable if the amount of refund is less than 10% of the tax determined under section 143(1) or on regular assessment. The Tribunal held that this proviso applies only to refunds arising from TDS, advance tax, or tax collected at source, and not to self-assessment tax. The CIT(A) had misinterpreted the provisions by treating the entire refund amount under section 244A(1)(a). 3. Eligibility of Interest on Self-Assessment Tax under Section 244A(1)(b): The Tribunal clarified that self-assessment tax falls under section 244A(1)(b), which does not have a 10% threshold limitation. Interest on self-assessment tax is calculated from the date of payment to the date of refund. Various judgments, including those from the Hon’ble Supreme Court and High Courts, support this interpretation. The Tribunal concluded that the assessee is eligible for interest on the total amount of refund arising from self-assessment tax. 4. Calculation of Interest for Part of a Month: The AO denied interest for tax payments made on 31.01.2003 and 28.02.2003, arguing that a few hours do not constitute a part of a month. The CIT(A) disagreed, stating that interest should be calculated from the date of payment, similar to the provisions under sections 234A, 234B, and 234C. The Tribunal upheld the CIT(A)’s view, allowing interest for the month of January for the amount paid on 31.01.2003 and for the month of February for the amount paid on 28.02.2003. Conclusion: The Tribunal directed the AO to pay interest on the refund in accordance with the proviso to section 244A(1)(a) for advance tax paid and to grant interest on the total amount of refund for self-assessment tax under section 244A(1)(b). The appeals of the assessee were allowed, and those of the revenue were dismissed.
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