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TMI Blog2012 (7) TMI 730X X X X Extracts X X X X X X X X Extracts X X X X ..... l first consider the revenue's appeal (ITA No.352/2011). 3.1 The revenue has raised five grounds in its memorandum of appeal. The grounds no.1, 4 and 5 are general in nature and no specific adjudication is called for; hence, the same are dismissed. 4. The surviving ground, namely, ground nos.2 and 3 reads as follows:- 2. The CIT(A) erred in deleting the levy of interest under section 234C as the provisions of section 234C envisage calculation of interest with reference to returned income and not the assessed income and alteration of interest under section 234C is not provided in the Act unlike the provisions of section 234B. 3. The CIT(A) erred in directing the Assessing Officer to grant interest under section 244A on refund of self ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce tax and tax paid under section 140A of the Act. However, the Assessing Officer in his order dated 3/8/2004 did not refund the interest levied under section 234C amounting to Rs. 80,64,680/-. The Assessing Officer also did not grant interest under section 244A on the self assessment tax paid by the assessee amounting to Rs. 1,50,00,000/- on 24/6/1996. 6. Aggrieved, the assessee filed a Rectification Application contending that the assessee is entitled to refund of the interest under section 234C of the Act and also is entitled to the grant of interest under section 244A of the Act on payment made under section 140A of the Act. The assessee further contended that it is entitled to interest on interest. The Assessing Officer passed order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d AR, on the other hand, reiterated the submissions made before the Income Tax authorities and strongly relied on the findings of the CIT(A). 12. We have heard the rival submissions and perused the materials on record. It is an undeniable fact that the original assessment concluded on 31.3.1999 on an income of Rs. 22.25 crores was subjected to modifications consequent on the findings of the appellate authorities and the loss carried forward from the earlier assessment years was set off against the income of the assessee for the AY under dispute. Accordingly, loss of Rs. 1.6 crores was arrived at and the assessee was entitled to receive all the amounts which were earlier paid as per the original assessment order. Consequently, the Revenue h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent reaches its finality in all respects only when the appellate forum decided the issues on such an assessment. In the present case, consequent on the final findings recorded by the appellate authorities, there was no liability to pay tax u/s 207 of the Act for the AY under consideration and, therefore, levy of interest u/s 234C for deferment of advance-tax payable by the assessee does not arise when the income of the assessee had finally been arrived at a loss of Rs. 1.6 crores. Interest paid under section 234C is for deferment of advance tax. When advance tax paid is refunded and also interest paid under section 234B, there is no logic in making the assessee liable for interest under section 234C, namely, for deferment of payment of adva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rpretation of the Revenue is that interest can be paid only if Act says interest on refund of self-assessment tax. However, section 244A doesn't distinguish that the assessee shall be entitled to receive interest only on certain refunds such as advance-tax, TDS. The provisions of section are very explicit and categorical that "where refund of any amount, becomes due to the assessee under this Act.....". There is misconception in the interpretation of the AO that the provisions of s. 244A do not explicitly provide for payment of interest on refund of self assessment tax. If the interpretation of the Revenue were to be taken on its face value, we are apprehensive that it would lead to miscarriage of justice. We are, therefore, in disagreement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R 606/122 Taxman 717 (SC) & * Sandvik Asia Ltd. v. CIT [2006] 280 ITR 643/150 Taxman 591 (SC) At this point of time, with due regards, we would like to recollect the ruling of the Hon'ble High Court of Madhya Pradesh in the case of CIT v. H.E.G. Ltd. [2009] 310 ITR 341 which in turn relied on the ruling of the Hon'ble Supreme Court in the case of Sandvik Asia Ltd (supra) on a similar issue. For appreciation of facts, we tend to highlight the relevant portion of the observations of the Hon'ble Court as under: '... .that in view of the express provisions of the IT Act, 1961, an assessee was entitled to compensation by way of interest for the delay in the payment of amounts lawfully due to the assessee which were withheld wrong ..... X X X X Extracts X X X X X X X X Extracts X X X X
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