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TMI Blog2015 (1) TMI 790X X X X Extracts X X X X X X X X Extracts X X X X ..... ng of the order, the language of sec. 244A(1) is patently clear and admits of no debate. Even the argument raised by the Revenue with reference to the Explanation thereto arises only out of a misreading of the same. Under the circumstances, we, for the reasons afore-stated, confirm the order of the first appellate authority in principle. The AO shall verify if any interest has been allowed to the assessee on the processing of its return for the year or not, and allow interest u/s. 244A(1)(b) on the self-assessment tax of ₹ 150 lacs accordingly. Decided against revenue. - I.T.A. No.5576/Mum/2013, - - - Dated:- 13-1-2015 - SHRI JOGINDER SINGH AND SHRI SANJAY ARORA, JJ. For The Appellant : Shri Neil Philip For The Respondent : None ORDER Per Sanjay Arora, A. M.: This is an Appeal by the Revenue directed against the Order by the Commissioner of Income Tax (Appeals)-13, Mumbai ( CIT(A) for short) dated 06.06.2013, allowing the assessee s appeal contesting the rejection of its claim for interest on self- assessment tax u/s.154 of the Income Tax Act, 1961 ( the Act hereinafter) subsequent to the completion of assessment vide order dated 25.04.2011. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T) vs. Asia Today Ltd. (in ITA No.1605/Mum/2010); (iv) B.S.E.S. Ltd. vs. DCIT [2008] 113 TTJ 227 (Mum); and (v) ACIT vs. Grindwell Norton Ltd. [2006] 100 ITD 245 (Mum) [102 TTJ 265 (Mum)]. 3. We have heard the party before us, and perused the material on record. 3.1 The issue before us is purely legal in nature. We may begin by reproducing the relevant provision: Interest on refunds. 244A. (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 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 one-half 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 refund is granted: Provided that no interest shall be payable if the amount of refund is less than ten per cent of the tax as determined under sub-sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R 759 (SC), he would continue, clarified that on the adjustment of the tax paid, whether by way of advance tax or tax deducted/collected at source or any other, the said tax would assume the character of the tax paid on regular assessment. By legal fiction, it was explained, the advance tax becomes income tax in respect of the income for the period. That is, loses its character as advance tax for the relevant previous year. The self-assessment tax would, likewise, also assume the character of income tax (on the income for the year) on its adjustment against the tax liability upon processing of the return u/s. 143(1), so that the date of payment of interest on its refund would commence from this date. None of the decisions referred to by the ld. CIT(A), he informed, dilate on this aspect of the matter, referring to or reading the term payment of tax as explained or defined per the provision. The foregoing sums up the controversy arising before us. 3.3 The hon ble apex court in Modi Industries Ltd. (supra) clarified that there was no right to interest on refund except as provided by the statute; a view confirmed by it again recently in CIT v. Gujarat Flouro Chemicals Ltd. [2013] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nation thereto, that would suggest the commencement date of the interest as the date of the processing of the return qua which the refund is being granted, i.e., as being argued before us in context of refund of self assessment tax. True, it is only upon processing of the return that the excess is determined under the procedure of assessment provided for under the Act. However, the payment of self-assessment tax assumes the nature of income tax on its payment by the assessee itself (refer: s. 140A). If not toward the same, what for, one may ask, the same is paid for or toward? When the entire tax liability for the year falls due for payment as at the close of the year, so that the excess of advance tax or TDS/TCS paid is liable for refund with interest from the following date, i.e., the first day of the assessment year, the payment of tax, either as self-assessment tax or otherwise than by way of prepaid tax, which would be only subsequent to the expiry of the relevant previous year, would surely be from the date of its payment. It is, in fact, inconceivable that one would pay in excess of the demand as raised upon him and, two, that the law actually provides for interest on such p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch as every return is to be mandatorily processed in the first instance, i.e., irrespective of it being, or not so, subsequently subject to the verification procedure under the Act by the issue of notice u/s. 143(2), it is surprising that the interest, as being prayed for by the assessee in the instant case, was not paid or allowed thereto on the processing of its return u/s. 143(1) itself. In fact, if and where it is actually so, the interest on assessment u/s.143(3) would only be on the differential amount, i.e., on the additional refund, or would even be liable to be withdrawn, as where the tax liability on regular assessment falls below that determined on processing u/s.143(1). The period for which the additional refund is granted shall be from the date of payment of the corresponding (additional) tax or April 1 of the assessment year, as the case may be, to the date of the refund. The period of withdrawal (of interest) shall be with reference to the same period for which the refund was initially allowed in excess. The loss of interest to the Central Government for the said period is taken care of by sec. 234D. If, however, as it appears, no interest has been allowed on the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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