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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 ..... ted 3rd February, 2010 on the following grounds : 1. Whether on facts and in the circumstances of the case, ld. C.I.T.(A) erred in holding that the assessee was entitled to interest u/s 244A of the Act on excess payment of self assessment tax u/s 140A of the Act ? 2. Whether on facts and in the circumstances of the case,ld. C.I.T (Appeals) erred in directing the AO to grant interest u/s 244A of the Act to the assessee on the tax paid u/s 140A of the Act considering the fact that payment u/s 140A is not covered in the provisions of section 244A(1) of the Act. 3. Whether it is incorrect to infer that the payment made u/s 140A of the Act cannot be said to be covered u/s 244A(1)(b) of the Act in view of the Explanation to section 244A(1)(b) of the Act. 2. The relevant facts giving rise to this appeal are that assessee is registered as a scheduled 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/borrowing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 244A(1)(a) if the refund is out of excess TDS or advance tax, interest is to be allowed at prescribed rate over specified period of time provided refund is not less than 10% of the assessed tax. AO has further stated that clause (b) of sub-section (1) of section 244A applies only if the excess amount of tax paid is not TDS or advance tax. It applies for payment of interest at the prescribed rate for over a month or part of month in respect of the period for payment of tax or penalty paid pursuant to notice of demand issued u/s 156 of the Act . AO stated that it does not envisage a situation where assessee brings in pre-assessment payment u/s 140A of the Act. 6. AO further stated that the assessee relied on the following three cases : 1. CIT v Cholamandalam Investment Finance Co. Ltd., 166 Taxman 132 (Mad) 2. 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 154 of the Act. The learned D.R. at the time of hearing as well as in his written submissions has stated that the learned C.I.T(A) has allowed the interest payable to the assessee u/s 244A of the Act by following the decision of the Hon ble Madras High Court in the case of CIT v. Ashok Leyland Ltd. 254 ITR 641. The learned D.R. has submitted that the Hon ble Madras High Court allowed the interest u/s 244(1A) of the Act on the excess tax paid on self-assessment by following the decision of the Apex Court in the case of Modi Industries Ltd. v. CIT 216 ITR 759. The learned D.R. has stated that the decision of the Hon ble Apex Court in the case of Modi Industries Ltd. (supra) is in support of excess payment of advance tax and not on excess payment of self-assessment tax and, therefore, the Hon ble Madras High Court in the 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) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of Cholamandalam Investment Finance Co. Ltd. (supra) the Hon ble Madras High Court stated that as per section 244A(1)(b) of the Act payment of interest is allowable on the refund to be made on tax paid under any case other than those covered u/s 115WJ or section 199 or section 206C of the Act or by way of advance tax refunds of which are dealt with u/s 244(1)(a) of the Act. Learned A.R. submitted that SLP filed by the department against the above decision of the Hon ble Madras High Court has been dismissed. Learned A.R. further submitted that Hon ble Delhi High Court vide its order dated 15.03.2010 in Sutlej Industries Ltd. (supra) has also held that if the assessee pays self-assessment tax in addition to TDS and advance tax, assessee is entitled to interest as the self-assessment tax falls within the expression 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 c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is reduced, the AO shall serve on the assessee a notice of demand in the prescribed form specifying the amount of the excess interest paid and requiring him to pay such amount ; and such notice of demand shall be deemed to be a notice under section 156 and the provisions of this Act shall apply accordingly. (4) The provisions of this section shall apply in respect of assessments for the assessment year commencing on the 1st day of April, 1989 and subsequent assessment years. 12. There is no dispute to the fact that the return filed by the assessee was processed u/s 143(1) of the Income Tax Act determining income tax of Rs. 2729312211 against which credit was allowed for TDS and advance tax (including self-assessment tax u/s 140A) paid out of the total tax paid by assessee of Rs. 3463604119. Assessee was issued 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r is sub-judice. We are of the considered view that the reasons given by the AO have no merit. It is not the case of the department that the decision of the ITAT, Kolkata Benches in the case of Hooghly Mills Ltd. (supra) has been stayed by the Higher Court. 13. We also do not agree with the submissions of the learned D.R. that the Hon ble Madras High Court s in the case of Ashok Leyland Ltd. (supra) and in the case of CIT v. Cholamandalam Investment Finance co. Ltd. (supra) are not to be followed as they have not properly interpreted the decision of the Hon ble Apex Court in the case of Modi Industries Ltd. (supra). On the other hand, we find that the said decisions of the Hon ble Madras High Court squarely apply to the issue before us in favour of the assessee and accordingly hold that the learned Commissioner 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) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sub-section (1) of section 244A of the Act and, therefore, AO was not justified to reject the claim of the assessee for payment of interest on the ground that department is contemplating to file SLP before the Hon ble Supreme Court. 14. The decision of the Madras Bench ITAT in the case of Shree Ram Transport Finance Co. Ltd. (supra) cited by learned departmental representative is not relevant because in that case it was held that principle of res judicata is not applicable and the Tribunal is not to follow the earlier decision even in the case of same assessee on the same issue if certain judicial precedence which were not brought to its notice earlier or provision of law or correct interpretation of law came to its knowledge subsequently. In the case before us, there is no such case cited by the learned D.R. that the interpretation of the provisions of section 244A considered by the Tribunal in its earlier decision is not correct and/or no decision has been brought by the learned D.R. of any higher forum or any other Hon ble High Court to establish that the decisions of the Hon ble Madras High Court in the cases of Cholamandalam (supra) and Ashok Leyland Ltd. (supra) are not to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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