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TMI Blog2015 (3) TMI 1083X X X X Extracts X X X X X X X X Extracts X X X X ..... to be taken as a British calendar month or a period of 30 days. It is observed that similar controversy had arisen in the case of CIT V/s. Arvind Mills Limited (2011 (9) TMI 244 - GUJARAT HIGH COURT ), wherein the assessee claimed interest under S.244A on the basis of British calendar month. The claim of the assessee, although was not allowed by the Assessing Officer as well as the learned CIT(A), the Tribunal allowed the same. When the matter was carried before the Hon’ble Gujarat High Court in an appeal filed by the Revenue, Their Lordships held that a reading of sub-section (1) of S.244A, the relevant provisions of which are analogous to the provisions of clause (ii) of S.201(1A) read with Rule 119A, would make it clear that the ter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s found during the course of survey, the assessee company had purportedly deducted tax under S.194C and 194J and also remitted the same to the Government account. There was, however, delay in the said remittance, for which, according to the assessing officer, interest of ₹ 32,28,121 was payable by the assessee under S.201(1A). Since interest under S.201(1A) only to the extent of ₹ 17,84,625 was paid by the assessee, the assessing officer passed the order dated 23.11.2013, treating the assessee as liable for payment of balance interest under S.201(1A) amounting to ₹ 14,43,496. 3. Against the order passed by the assessing officer under S.201(1)/201(1A), an appeal was preferred by the assessing officer before the learned C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Total Two months 4. The learned CIT(A) did not find merit in the contentions raised by the assessee and relying on Rule 119A(b) of Income-tax Rules, 1962, she confirmed the levy of interest under S.201(1A) as computed by the Assessing Officer for the following reasons given in paragraph No.3.5 to 3.7 of her impugned order. 3.5 As per Rule 119A(b) the interest is to be calculated for every month and any fraction of the month shall be deemed to eb full month. It is also pertinent to mention that under S.244A, the income tax department pays interest to the assessee, the interest is to be calculated on refund as per Rule 119A, therefore, even though the rate of interest col ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the computation of interest payable by the assessee under S.201(1A), the provisions of which read as under- 201.(1) (1A) Without prejudice to the provisions of subsection (1), if any such person, principal officer or company as is referred to in that sub-section does not deduct the whole or any part of the tax or after deduction fails to pay the tax as required by or under this Act, he or it shall be liable to pay simple interest, - (i) At one percent for every month or part of a month on the amount of such tax from the date on which such tax was deductible to the date on which such tax is deducted; and (ii) At one and one-half per cent for every month or part of a month on the amount of such tax from the date on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... comprised in a period, any fraction of a month shall be deemed to be a full month and the interest shall be so calculated; (c) the amount of tax, penalty or other sum in respect of which such interest is to be calculated shall be rounded off to the nearest multiple of one hundred rupees and for this purpose any fraction of one hundred rupees shall be ignored and the amount so rounded off shall be deemed to be the amount in respect of which the interest is to be calculated. 6. In the present case, clause (ii) of S.201(1A) read with Clause (b) of Rule 119A is applicable and it provides that where the interest is to be calculated for every month or part of a month comprised in a period, any fraction of a month shall be deemed t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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