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TMI Blog2006 (10) TMI 357X X X X Extracts X X X X X X X X Extracts X X X X ..... cess over the amount found refundable on regular assessment, without specifying the composition of the excess amount whether it was with reference to sum total of refund which was granted thrice, or only with reference to the refund granted third and the last time, which created uncertainty in the face of the assessee s contention before the CIT(A) that the excess had to be worked out with reference to the refund granted third and the last time alone. 2.The CIT(A) erred in stating that the appeal of the assessee on this ground was allowed, without taking note of the fact that, in its submission, the assessee had treated the excess amount only with reference to the refund granted third and the last time, which was not in conformity with se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 29-3-2004 was made wherein income was assessed at Rs. 22,72,99,865 and subsequently order under section 154 dated 8-6-2004 was passed in which the income was determined at Rs. 20,50,26,099, the particulars of such order regarding levy of taxes and demand/refund as given at pp. 5 and 6 of CIT(A) s order as under : Total income assessed under section 143(3) Rs. 20,50,26,099 Tax thereon Rs. 7,28,43,945 Add : Interest under section 234C Rs. 7,09,112 Add : Interest under section 234D Rs. 2,88,235 Total Rs. 7,38,41,292 Less : Advance tax and TDS paid thereon Rs. 9,39,63,517 Refund due Rs. 2,01,22,225 Interest under section 244 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 6,33,807 on the ground that refund due to the assessee in any case was more than those first two refunds and interest under section 234D could be charged only in respect of 3rd refund. It is on these arguments learned CIT(A) has held that interest under section 234D could not be charged in respect of first two refunds aggregating to sum of Rs. 35,55,411 (Rs. 29,21,604 + Rs. 6,33,807). The relevant observation of CIT(A) in this regard are reproduced below for the sake of convenience : "7. I have carefully considered the arguments put forth by the appellant. Section 234D deals with cases where refund has been granted to the assessee. There could be 2 types of situations envisaged by section 234D. First, on regular assessment no refund is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s refund of Rs. 3,26,37,466 was granted on 19-3-2004. 8. In my opinion the object of section 234D is to charge interest on the refund granted to the assessee in excess of what was due to him. The question of holding refund of Rs. 35,55,411 to be excess does not arise till such time as the ultimate refund amount falls below this amount. In the present case, such interest can be charged only on the excess refund granted pursuant to the order under section 143(1)( a ) dated 19-3-2004 since that would be the excess refund granted to the appellant. This stands to reason also as the assessee would have enjoyed the benefit of this excess refund from the date on which it was granted to him. 9. Thus the appeal of the appellant on this ground is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "Section 234D. (1) Subject to the other provisions of this Act, where any refund is granted to the assessee under sub-section (1) of section 143, and : ( a )no refund is due on regular assessment; or ( b )the amount refunded under sub-section (1) of section 143 exceeds the amount refundable on regular assessment, the assessee shall be liable to pay simple interest at the rate of one-half per cent on the whole or the excess amount so refunded, for every month or part of a month comprised in the period from the date of grant of refund to the date of such regular assessment. (2) Where, as a result of an order under section 154 or section 155 or section 250 or section 254 or section 260 or section 262 or section 263 or section 264 or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation ( b ) is exceeds , so interest is leviable on such portion of refund which exceeds the amount refundable on regular assessment. There is no ambiguity in the language of section 234D, so interest could not be charged on the amount of refund which does not exceed the amount refundable on regular assessment. It has already been pointed out that the advance tax and TDS paid by the assessee for the year under consideration is Rs. 9,39,63,517 against which the tax ultimately found to be leviable is Rs. 7,28,43,945 (excluding interest leviable under section 234C Rs. 7,09,112). Even after levy of interest under section 234C and 234D the refund, according to the advance tax and TDS paid by the assessee worked out at Rs. 2,01,22,225. Thus, in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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