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TMI Blog2010 (11) TMI 486X X X X Extracts X X X X X X X X Extracts X X X X ..... bank in terms of Schedule II of the Reserve Bank of India Act, 1934. The main activity of the assessee in India comprised accepting deposits, giving loans, discounting/collection of bills, issue of letters of credit/guarantees, executing forward transaction in foreign currencies for importers/exporters, money market lending/borrowings, investment in securities, etc. in terms of the prevailing rules and regulations governing such transactions. 3. For the assessment year under consideration, assessee filed return on 31.10.2007 showing total income of Rs. 6,526,332,404. It is observed that the assessee paid tax of Rs. 3463604119 comprises of TDS of Rs. 3604119, advance tax of Rs. 2,810,000,000 and self-assessment tax of Rs. 6,50,000,000. It is observed that the return was processed u/s 143(1) of the Act and the assessee's total tax liability including sur-charge and cess was determined at Rs. 272,93,12,211 against which credit of pre-paid tax was allowed to the extent of Rs. 3,41,36,04,119 which comprises advance tax of Rs. 2,76,00,00,000, TDS of Rs. 3604119 and self-assessment tax of Rs. 650000000. Thus a refund arising out of processing was Rs. 684291908. Since no interest on the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; Hooghly Mills Co. Ltd. v. DCIT 74 ITD 309 (Kolkata ITAT) 3. Addl. CIT v. Grinwell Norton Ltd. 285 ITR 13 (Mumbai ITAT) The AO after considering the above three cases relied upon by the assessee has rejected the application of the assessee filed u/s 154 of the Act on the ground that payment of interest u/s 244A of the Act on pre-assessment payment u/s 140A, two opinions are possible. Relevant part of the order of the AO reads as under : "In Cholamandalam, Hon'ble Madras High Court ruled in assessee's favour and directed to grant interest on excess payment u/s 140A. However, while arriving at the decision, reliance was placed entirely on the decision of the same court in CIT v. Ashok Leyland Ltd. [254 ITR 641]. In the said judgment, the section dealt with was 244(1A) and the excess amount was in the nature of advance tax payment. Therefore, ratio of the said decisions do not apply in this case. In Hooghly Mills Co. Ltd., Kolkata ITAT decided that interest is payable on excess self-assessment payment. In another case namely DPSC Ltd., assessed in DCIT, Circle-6, Kolkata similar order of ITAT, Kolkata was contested in High Court u/s 260A and presently the department is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case of Ashok Leyland Ltd. (supra) and also in the case of CIT v. Cholamandalam Investment & Finance Co. Ltd. (supra) has not properly interpreted the provisions of the Act and the ratio laid down by the Hon'ble Madras High Court in the above two cases is not good law. Learned D.R. has stated that excess self-assessment tax paid is not covered by section 244A(1)(a) of the Act and, therefore, the intention of the Parliament is not to allow interest on refund of excess payment of self-assessment tax. Learned D.R. has further stated that assessee's case is also not covered by the provisions of section 244A(1)(b) of the Act as its explanation talks about the payment of tax or penalty specified in the notice of demand issued u/s 156 of the Act. Learned D.R. has stated that the refund to the assessee has arisen not on account of any tax or penalty paid pursuant to notice issued u/s 156 of the Act and, therefore, no interest on refund on excess payment of self-assessment tax is allowable to the assessee. Learned D.R. has further stated that the case of Hon'ble Delhi High Court in the case of CIT v. Sutlej Industries Ltd. in ITA No. 1204/2005 decided on 15.03.2010 (reported in 2010 - TI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of "refund of any amount". Learned A.R. submitted that learned C.I.T(A) has directed the AO to allow interest to the assessee on excess payment of self-assessment tax paid u/s 140A of the Act and the said order be confirmed. 11. We have considered the submissions of the learned representatives of the parties and the cases cited by them. We have also carefully considered the provisions of section 244A of the Act and consider it necessary to state the same which is as under : '244A. Interest on refunds. (1) Where refund of any amount becomes due to the assessee under this Act, he shall, subject to the provisions of this section, be entitled to receive, in addition to the said amount, simple interest thereon calculated in the following manner, namely: - (a) where the refund is out of any tax collected at source under section 206C or paid by way of advance tax or treated as paid under section 199, during the financial year immediately preceding the assessment year, such interest shall be calculated at the rate of two-third per cent. for every month or part of a month comprised in the period from the 1st day of April of the assessment year to the date on which the ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ued refund amounting to Rs. 684291908 . Since AO did not pay interest on the excess payment of tax paid u/s 140A of the Act, assessee filed application u/s 154 of the Act. We observe that the AO has discussed/referred to the cases of Hon'ble Madras High Court of CIT v. Cholamandalam Investment & Finance Co. Ltd. (supra) and of Ashok Leyland Ltd. (supra) that their lordships have allowed interest on excess payment of self-assessment tax paid but he has stated that the matter is subjudice and as such two opinions are possible and rejected the claim of the assessee. However, we do not agree with the reasoning given by AO as he has not referred/cited any contrary decision of any other High Court. We also observe that similar issue was considered by ITAT, Kolkata Benches,Kolkata in the case of Hooghly Mills Co. Ltd. (supra) and the relevant part of the said order is as under : "Interest is required to be paid by the Government to the assessee for holding and utilizing the excess money paid by the assessee over and above its tax dues. In the instant case, there cannot be any doubt about the fact that the assessee had paid much more self-assessment tax than was required under the relevan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of Income-tax (Appeals) has rightly held that the assessee is entitled to interest on the refund granted to it on the excess tax paid on self-assessment. Not only this, we also observe that the Hon'ble Delhi High Court in the case of Sutlej Industries Ltd. (supra) has held that computation of interest on self-assessment tax has to be paid in terms of section 244A(1)(b) of the Act, i.e. from the date of payment of such amount upto the date on which refund is actually granted. In view of the said decisions of the Hon'ble Delhi High Court we hold that the contention of the learned D.R. that the said decision is not to be followed by the Tribunal as it is not the decision of the Hon'ble Jurisdictional High Court has to be rejected because the learned D.R. has not brought any decision of any other High Court which has taken a contrary view leaving aside the decision of the Hon'ble Jurisdictional High Court. In this regard, we consider it necessary to refer the decisions of the Hon'ble Andhra Pradesh High Court in the case of State of A.P. v. C.T.O. (169 ITR 564) where their lordships after referring the decision of the Hon'ble Bombay High Court in K. Subramanian, ITO v. Siemens India ..... X X X X Extracts X X X X X X X X Extracts X X X X
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