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TMI Blog2015 (3) TMI 646X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 9,47,227/- u/s.244A, interest has been computed by AO at Rs. 13,75,948/-. Thus, as per assessee, interest u/s.244A has been short allowed by AO at Rs. 5,71,279/-. 4. By the impugned order, the CIT(A) confirmed the action of the AO after having the following observations :- I have considered the above submissions of the appellant and the order of the AO. Since, the issue related to working of interest was factual, the comments of the AO were called for vide letter No. CIT(A}-17/Appellate Proc./2011-12, dated 11.10.2011 wherein the submissions of the appellant were sent to the AO for his comments. The comments of the AO were received vide letter No. ITO/8(2}(2}/Remand/Kejriwal Beverages/2012-13, dated 09.01.2013 forwarded by the Addl, CIT vide letter No. Addl.CIT-8(2}/Remand/2012-13, dated 14.0l.2013. The remand report of the AO states as under: "2. In this case the assessee is seeking additional interest of Rs. 6,77,250/- on the interest of Rs. 17,30,068/- and Rs. 10,75,847/- received by him u/s. 244A of the Act through the refunds of Rs. 32,80,797/-, Rs. 9,07,186/- and Rs. 9,58,935/- received on 26.03.2002, 11.11.2003 and 11.10.2010 respectively. The assessee is relying on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee's money. These facts are not applicable to the case of instant assessee. Therefore, the ratio of the decision relied upon by the assessee is not applicable to the case on hand. (iii) Thirdly, the decision relied upon by the assessee was delivered in SLP filed against the order of Bombay High Court in Writ Petition. Thus, the doctrine of precedence is not applicable to the writ jurisdiction to be treated as law of the land and followed in subsequent cases. This is also evident from the final directions of the Hon'ble Court in para 43 of the order which is reproduced a sunder: "The assessment years in question in the four appeals are the assessment years 1977-78, 1978-79, 1981-82 and 1982-83. Already the matter was pending for more than two decades. We, therefore, direct the respondents herein to pay the interest on Rs. 40,84,906/- (rounded off to Rs. 40,84,900/-) simple interest @ 9 per cent p.a. from 31st March, 1986 to 27th March, 1998 within one month from today filing which the Department shall pay the penalty interest @ 15 per cent p.a. for the above said period." (iv) Finally, as per the provisions of section 244A(I)(b) of the Act the interest is payable on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is the assessee not entitled to interest under the relevant provisions of the Act. In this connection, we may refer to the provisions of section 195(1), 195A, 214, 219, 237, 243 and 244 which stood at the relevant time. They are as under: 195. (1) Any person responsible for paying to a non-resident, not being a company, or to a foreign company, any interest or any other sum chargeable under the provisions of this Act (not being income chargeable under the head "Salaries" shall, at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rates in force. Explanation.-For the purposes of this section, where any interest or other sum as aforesaid is credited to any. account, whether called "Interest Payable Account" or "Suspense Account" or by any other name, in the books of account of the person liable to pay such income, such crediting shall be deemed to be credit of such income to the account of the payee and the provisions of this section shall apply accordingly. 195A. Where, under an agreement or other arrangement, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as advance tax in pursuance of this Chapter shall be treated as a payment of tax in respect of the income of the period which would be the previous year for an assessment for the assessment year next following the financial year in which it was payable, and credit therefor shall be given to the assessee in the regular assessment: Provided that where, before the completion of the regular assessment, a provisional assessment is made under section 141A, the credit shall be given also in such provisional assessment. 237. If any person satisfies the [Assessing) Officer that the amount of tax paid by him or on his behalf or treated as paid by him or on his behalf for any assessment year exceeds the amount with which he is properly chargeable under this Act for that year, he shall be entitled to a refund of the excess. 243. (1) If the [Assessing) Officer does not grant the refund,- (a) in any case where the total income of the assessee does not consist solely of income from interest on securities or dividends, within three months from the end of the month in which the total income is determined under this Act, and (b) in any other case, within three months from the end of the month ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lment, which was in excess, from the date on which such instalment was paid to the date on which the refund is granted: Provided further that no interest under this sub-section shall be payable for a period of one month from the date of the passing of the order in appeal or other proceeding: Provided also that where any interest is payable to an assessee under this sub-section, no interest under sub-section (1) shall be payable to him in respect of the amount so found to be in excess. (2) Where a refund is withheld under the provisions of section 241, the Central Government shall pay interest at the aforesaid rate on the amount of refund ultimately determined to be due as a result of the appeal or further proceeding for the period commencing after the expiry of 8[three months from the end of the month in which the order referred to in section 241 is passed] to the date the refund is granted. (3) The provisions of this section shall not apply in respect of any assessment for the assessment year commencing on the 1st day of April, 1989, or any subsequent assessment years." We say no more. With respect, we are of the view that Sandvik Asia (Supra) has not been correctly decided. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... side or cancelled and an order of fresh assessment is directed to be made, the refund: if any, shall become due only on the making of such fresh assessment; (b) the assessment is annulled, the refund shall become due only of the amount, if any, of the tax paid in excess of the tax chargeable on the total income returned by the assessee. 243. Interest on delayed refunds-(l) If the Assessing Officer does not grant the refund,- (a) in any case where the total income of the assessee does not consist solely of income from interest on securities or dividends, within three months from the end of the month in which the total income is determined under this Act, and (b) in any other case, within three months from the end of the month in which the claim for refund is made under this Chapter, the Central Government shall pay the assessee simple interest at fifteen per cent per annum on the amount directed to be refunded from the date immediately following the expiry of the period of three months aforesaid to the date of the order granting the refund. Explanation.-If the delay in granting the refund within the period of three months aforesaid is attributable to the assessee, whether wholly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... foresaid rate on the amount of refund ultimately determined to be due as a result of the appeal or further proceeding for the period commencing after the expiry of three months from the end of the month in which the order referred to in section 241 is passed to the date the refund is granted. 14. As per section 240 of the Act, the amount of tax paid by the assessee is to be refunded if such refund becomes due as a result of any order passed in appeal or in other proceedings. Section 243 deals with interest on delayed refunds. Such an interest becomes payable if the amount is not refunded within three months from the end of the month in which the total income is determined or within three months from the end of the month in which the claim for the refund is made under that chapter. Interest payable is @ 12% p.a. from the date immediately following the expiry of the period of three months aforesaid to the date of the order granting the refund: 15. No doubt, when the tax paid is more than what is due, as a result of certain additions etc. made by the AO and in appeal when those are deleted by the appellate authority, the refund of the excess amount is to be made along with interest, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f interest amount would become unjustified and interest on interest would also become payable. The reason is simple. It is the tax which was paid in excess by the assessee which became refundable. The assessee would be compensated by paying interest thereupon. It is only when the interest is not refunded along with excess tax that the withholding of the said interest becomes unjustified and it becomes an amount due" to the assessee on which the assessee can claim further interest. Such a situation has not happened in the present case as the amount of interest is calculated and refunded along with the refundable tax amount. 20. The Tribunal, in these circumstances, rightly held that the principle laid down in Sandvik Asia Ltd. (supra) would not apply to the present fact situation. We, therefore, answer the question of law in favour of the revenue and against the assessee and as a consequence dismiss all these appeals with costs quantified at Rs. 5000/- per appeal (emphasis supplied)." 4.7 The Hon'ble Supreme Court has made adverse remarks about the decision of Sandvik Asia Ltd. in the decision of Gujarat Fluoro Chemicals. Therefore, following Gujarat Floura Chemicals and the d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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