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TMI Blog2015 (4) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... o Chemicals, [2013 (10) TMI 117 - SUPREME COURT]the interest which can be granted to the assessee on refund as per section 244A would be the interest provided in that section and no other interest on such statutory interest can be provided. Thus, it was pleaded by Ld. DR that there is no provision according to which assessee can be granted interest on interest. - Decided against assessee. - ITA NO 6298/MUM/13, 6278/MUM/13 to 6281/MUM/13, 6291/MUM/13, 6292/MUM/13, 6296/MUM/13, 6299/MUM/13, 6306/MUM/13 to 6327/Mum/2013 - - - Dated:- 25-3-2015 - I.P. Bansal And Rajendra JJ. For the Appellant : Shri Rajendra Shah For the Respondent : Shri S.D.Shrivastava ORDER Per Bench: All these appeals are filed by the respective assessees and they are directed against a consolidated order 29/08/2013 passed by Ld. CIT(A)-23 Mumbai in respect of assessment year 1984-85. Grounds of appeal in all these appeals are identical and read as under: 1) In law and in facts and circumstances of the Appellant s case, the learned CIT(A) has grossly erred in the points of law and facts. 2) In law and in facts and circumstances of the Appellant s case, the learned CIT(A) has grossly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ongwith due interest. 2) Interest on refund as also interest on interest. 3.1 The assessee filed rectification application dated 5/10/2012 for interest on refund under section 244A of the Act till the date of refund, which has been denied to the assessee by AO and also by Ld. CIT(A). The assessee is aggrieved, hence, has filed aforementioned grounds of appeal. 3.2 For the sake of completeness of the facts it may be mentioned here that assessee has paid advance tax of ₹ 31,780/- and self assessment tax of ₹ 19,800/-. The total amount of tax paid by the assessee is a sum of ₹ 51,580/-. As per income tax computation form dated 28/11/2000, copy of which has been filed at pages 10 to 11 of the paper book. It is in pursuance to order passed under section 155(2) of the Act and as per said computation a refund of ₹ 40,442/- was granted vide order dated 29/02/1988 and balance amount of ₹ 11,138/- was refunded to the assessee. The assessee is seeking interest on the aforementioned refund of 40,442/- upto the date 29/2/1988 and for a sum of ₹ 11,138/- upto 28/11/2000. 3.3 It is undisputed fact that in view of the substantial assessability of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts. The Board has clarified that the protective demand is not subject to recovery unless it is finally upheld. The Board has further explained that once the declaration in a substantive case or year is accepted, the tax arrear in protective case / year would no longer be valid and will be rectified by suitable orders in the normal course. In the present case substantive assessments have been made by the department in the hands of Main Trusts. Protective assessments have been made in the case of beneficial trusts. Main Trusts have settled the dispute under KVSS. They have paid the tax under KVSS in respect of the assessment completed in their hands on substantive basis. Therefore, in the light of the circular, the corresponding protective assessments made in the hands of beneficial trusts would fade away and the demand raised in those protective assessment would no longer be valid. When the assessment is not subsisting and the demand is not valid, the amount paid by the assessee along with the return subject to protective assessment becomes refundable to the assessee. Therefore, we are of the considered opinion that the assessing officer has rightly accepted the prayers of the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f KVSS. The Main Trusts have settled their substantive assessments under KVSS which for all practical purposes is equivalent to finally settling the substantive assessments in their hands. The final outcome of the whole process is not different from the substantive assessments having been accepted by the assessees as such or having been settled under an available scheme known as Kar Vivad Samadhan Scheme, 1995. In either case the protective assessments become invalid whereby no demand can be enforced against those protective assessments. The consequence is that if the assessees have paid any amount of tax along with their returns considered for protective assessments, such taxes have to be refunded to them. 32. We do not find much force on the reliance placed by the learned standing counsel on the decision of the Gujarat High Court in the case of Saurashtra Cement Chemical Industries vs. ITO 194 PER 659. In that case there was no assessment at all and the question of refund was considered in that perspective which is quite different from the present case. The income involved in the substantive assessment as well as in the protective assessments are one and the same. The income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the assessees to decide whether to take benefit out of that or not. Therefore, it is only when KVSS was promulgated, the assessee had an occasion to make a move and settle the dispute. So also the proceedings were locked up in different appellate forums. Therefore, there is no merit in the argument of the Revenue that the delay was caused by the conduct of the assessees. 35. Therefore, we also find that the assessing officer has rightly granted interest to the assessees on refunds due to them. 3.4 It is also the case of the assessee that the said order of the Special Bench has been upheld by Hon ble Gujarat High Court and reference was made to the decision dated 26/6/2008 in I.T Appeals Nos. Punitben K. Patel OSFDT And Others 284 cases Tax Appeal Nos. 1514 to 1797 of 2006, Manjulaben Pramodbhai Patel and Others, 64 Cases, Tax Appeal Nos. 573 to 618 and 1216 to 1233 of 2007 and Janak Pramodbhai Patel and Others 6 cases, Tax Appeal Nos. 182 204 of 2002 with Tax Appeal Nos. 27 of 30 of 2004. Copy of this order is filed at pages 64 to 96 of the paper book. 3.5 So far as it relates to findings of their Lordships on grant of interest our attention was invited to the followi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee was not liable to the demand on the income of the main Trust. Since the assessee has disclosed the income as its own and had paid the tax on its own volition, and in order to protect interest of Revenue the AO only made the protective assessment. No enforceable demand was created on the assessee. According to well settled position of law, in protective assessment demand is only contingent demand and not legally enforceable and thus, in reality assessee did not pay tax in pursuance of any order of assessment. Ld. DR further referred to the decision of Hon ble Supreme Court in the case of Modi Industries Ltd. vs. CIT, 216 ITR 759 referred to in para-6.2.3 of order of Ld. CIT(A) pleaded that the meaning of regular assessment in section 214, would be that a tax payer is entitled to claim interest on the excess amount advance tax paid only with reference to assessed tax determined on regular assessment and further no interest can be claimed under section 214 beyond the date of regular assessment. In this manner Ld. DR pleaded that interest has rightly been denied by Ld. CIT(A). 6.So far as it relates to ground No.4, it was submitted by Ld. DR that according to decision of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... justification in such disregard shown by Ld. CIT(A). Therefore, in the facts circumstances of the case, such conduct of the Revenue is neither according to the accepted position of law settled by the higher judicial forums nor it is appreciable for the reason that Hon ble Gujarat High Court has already directed the Revenue not to drag the assessee in unnecessary avoidable litigation. 7.2 The issue regarding grant of interest to the assessees is clearly covered by the decision of the Special Bench as well as Hon ble Gujarat High Court which have not been contended to be reversed or modified. Therefore, we direct the Revenue to grant the interest to the assessee and Ground No.2 3 are allowed. 7.3 Before parting with Ground Nos. 2 3 of the assessee s appeal, we may mention here that it is a proper case where cost can be imposed on the Department in favour of the assessee for not following the directions of Hon ble Gujarat High Court (supra), but keeping in view that no such request was made by Ld. AR, we restrain ourselves to award such cost. 8.Now coming to Ground No.4, this issue has now been settled by Hon ble Supreme Court by the decision relied upon by Ld. DR. Ther ..... X X X X Extracts X X X X X X X X Extracts X X X X
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