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TMI Blog2013 (7) TMI 442X X X X Extracts X X X X X X X X Extracts X X X X ..... has erred in rejecting the plea of the Appellant that the rectification order dated July 28, 2008 passed by the learned Assessing Officer is barred by limitation of time under section 154(7) and is thus without jurisdiction, invalid and bad in law. 2. On the facts and circumstances of the case and in law, the CIT(A) has erred in rejecting the plea of the Appellant that the learned Assessing Officer erred in assuming the jurisdiction under section 154 in respect of a debatable issue. 3. On the facts and circumstances of the case and in law, the CIT(A) has erred in not directing the learned Assessing Officer to grant interest u/s 244A on 'refund' due, in accordance with the law. 4. On the facts and circumstances of the case and in law, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s 244A(1)(b) of the I T Act to the assessee. 3.1 Apart from this, the Assessing Officer has also granted refund of Rs. 191.35 crores adjusted in Jan 2001 along with the interest of Rs. 38.91 crores u/s 244A(1)(b) of the Act, though there is no dispute in respect of the said refund and interest. 3.2 The tax liability of Rs. 35.29 crores determined by the Assessing Officer while passing the order giving effect to the Commissioner of Income Tax(Appeals) order after charging the additional tax of Rs..31 lacs. The assessee filed a rectification petition u/s 154 on which the Assessing Officer passed an order dated 2.7.2007 and accepted the claim of the assessee that the additional tax was not chargeable. Accordingly, the demand was reduced to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lculating the interest. 4. First we take up the ground no.2 regarding jurisdiction of the Assessing Officer u/s 154 of the Act in respect of the debatable issue. Shri Dinesh Vyas, the ld Sr counsel for the assessee has contended that rectification u/s 154 can be only for an obvious and patent mistake and not something which can be established by a long drawn process of reasoning or/on points on which there may be conceivably be two opinions. The ld Sr counsel has submitted that grant of interest on the composite amount of refund plus interest on particular date is an allowable claim in view of various decisions of the Hon'ble Supreme Court as well as the High Courts. He has relied upon the following decisions:- i) ACIT vs Tata Power Co Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssing Officer did not apply his mind at the time of granting the interest u/s 244A(1)(b) and when the audit party has pointed out a mistake in the calculation of the working of interest, the Assessing Officer accordingly, rectified the said mistake. Thus, the rectification of the mistake in the calculation of the interest is very much an error apparent within a subject matter of sec. 154. 5 We have considered the rival submissions and carefully perused the relevant material on record. As we have discussed above while narrating the facts leading to the controversy, the issue in the order passed u/s 154, is regarding the grant of interest u/s 244A(1)(b). The audit party has raised the objection in respect of grant of excess interest is as un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g to Rs.2,03,10,663/- and passed the impugned order u/s 154 as under:- "ORDER UNDER SECTION 154 OF THE I T ACT, 1961 In this case, an order u/s 154 was passed on 2.7.2007 whereby a refund of Rs. 97,50,733/- was determined. Thereafter, an audit objection was raised vide Audit Memo no.11/2007-08 dtd 9.1.2008, stating that interest u/s 244A(1)(b) amounting to Rs. 2,03,10,663/- was granted in excess to the assessee. On verification of records, the objection raised was found to be correct and the same is now being settled vide this rectification. Total income remains the same at Rs. 75,23,56,887/- Issue revised DB./Challan Sd/- PREMANAND. J Asst Commissioner of Income tax 1(3) Mumbai " 5.2 The assessee has raised the objection vide its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law. 7 In the case of HEG Ltd, (supra), the Hon'ble Supreme Court has held that interest component in the refund will partake the character of 'amount due' u/s 244A, it became an integral part of the refund amount which is not paid after the said amount become due and payable. 7.1 Similarly, in the case of Sandvik Asia Ltd (supra), the Hon'ble Supreme Court has held that once the interest became due it takes the same colour as the excess amount of tax which is refundable on regular assessment. 8. In view of the series of decisions of the Hon'ble Supreme Courts as well as Hon'ble High Courts, the issue of grant of interest on interest is a highly debatable and rather allowable claim in favour of the assessee. Therefore, a decision on suc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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