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TMI Blog2013 (9) TMI 478X X X X Extracts X X X X X X X X Extracts X X X X ..... . 140A on self-assessment, the assessee is entitled to interest. It is also trite law that wherever the assessee is entitled to refund, there is a statutory liability on the Revenue to pay interest on such refund on general principles to pay interest on sums wrongfully retained - following decision of CIT v/s Cholamandalam Investment 7 Finance Co. Ltd. [2007 (6) TMI 69 - HIGH COURT , MADRAS] - Decided against Revenue. - ITA No. 3701/Mum./2012 - - - Dated:- 26-6-2013 - Shri B. Ramakotaiah And Shri Amit Shukla,JJ. For the Petitioner : Mr. S. D. Srivastava For the Respondent : Mr. Dhanesh Bafna a/w Mr. Aliasgar Rampurawala ORDER Per Amit Shukla, J.M. The present appeal has been preferred by the Revenue challenging the impugned order dated 21st February 2012, passed by the learned Commissioner (Appeals)-XXXVIII, Mumbai, which relates to proceedings under section 154 of the Income Tax Act, 1961 (for short "the Act") for the assessment year 2007-08. The sole dispute in this appeal is that the learned Commissioner (Appeals) erred in directing the Assessing Officer to grant interest under section 244A of the Act on self-assessment tax paid ignoring the Explanation to s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R 438 (Mad.); vii) CIT Ors. v/s M/s. Vijaya Bank, ITA no.45 of 2011 (Kar.); viii) Sutlej Industries Ltd. v/s CIT, 325 ITR 331 (Del.). 5. The learned Commissioner (Appeals) directed the Assessing Officer to grant interest under section 244A, after observing and holding as under:- "7.1 The Hon'ble High Courts of Madras, Karnataka and Delhi have held in the above cited decisions that assessees are entitled to interest u/s 244A of the Act even in respect of the amounts remitted under self assessment tax in terms of section 140A of the Act. Further, the decision of the Hon'ble Madras High Court in the case of CIT v/s Cholamandalam Investment and Finance Co. Ltd. [2007] 294 ITR 438 (Mad.) has been confirmed by the Hon'ble Supreme Court in the case of CIT v/s HEG Ltd., [2010] 324 ITR 331 (SC). Respectfully following the above decisions, A.O. is hereby directed to grant interest under section 244A of the Act on the quantum of refund determined under section 154 of the Act dated 25.02.2010." 6. Before us, the learned Counsel, on behalf of the assessee, submitted that the point in issue is covered by seris of decision and for the sake of ready reference, following case laws were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be paid by way of TDS (s. 199), advance tax (s. 209) or by way of self-assessment tax (s. 140A). In addition, where the assessment is completed at an income higher than the returned income, the tax payable by the assessee is specified in the notice of demand issued under s. 156. Where there is a shortfall in payment on tax vis- -vis the tax finally due on the assessed income, the assessee is liable to pay interest under s. 234B. Conversely, where the Revenue makes a high-pitched assessment which is subsequently reduced/modified in appeal, any payment of taxes made, which are subsequently refunded as a consequence of relief obtained in appeals etc., are monies legitimately belonging to the taxpayers and wrongly withheld by the Government. This is based on the principle that if the Revenue had, in the first instance, made correct assessment of the tax liability of the assessee, the assessee would not have been deprived by the use of money. In such a situation, where prepaid taxes are in excess of the assessed tax, the assessee is entitled to refund of such tax along with interest thereon. Where an assessee out of abundant caution pays self-assessment whilst staking a claim in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 1st of April of the assessment year. At the same time, as the said payment of tax was not made in pursuance of a notice of demand issued under s. 156, Explanation to ci. (b) has no application. In such cases, as the opening words of cI. (b) specifically referred to as in any other case', the interest is payable from the date of payment of the tax. As cI. (b) expressly provides in any other case the payment of tax subsequent to the first day of April of the assessment year, either before or along with filing of the return would squarely fall under cI. (b) and therefore, when the said amount is ordered to be refunded the interest is to be calculated from the date of such payment of tax. Having regard to the scheme of s. 244A, and the circular issued by the Board which show how the Department has understood the section coupled with the fact that the principle underlying the said section is that, any excess payment of tax paid by the assessee is not only to be refunded but it has to be refunded with interest; if the case of the assessee does not fall under ci. (a) or the Explanation to ci. (b), the excess tax paid shall be refunded with interest from the date of payment of such tax. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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