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TMI Blog2016 (2) TMI 564X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal:- 1 That Commissioner (Appeals) erred in not granting interest u/s 244A on the income tax refund of ₹ 8,63,139 paid to the assessee for the period from 17-12-2008, being the date of filing of rectification application, till 04-12-2012 being the date of grant of refund. 2 That Commissioner (Appeals) erred in holding that delay in issue of refund was attributable to the assessee without considering the fact that application for rectification of mistake was filed on 17-12-2008. 3 That without prejudice to above grounds, whether for the purpose of passing of rectification order u/s 154, law as on the date of passing of order u/s 154 is relevant and not as on the date of passing of appellate order and since law on 04-12-2012 was that assessee is entitled to interest on refund arising on account of self assessment tax, CIT(A) erred in not giving interest u/s 244A. 4. Whether for the purpose of deciding whether self assessment tax is a tax covered in Sec. 244A(l)(b) or not, direct judgement of Supreme Court in the case of Cholamandalam Investment Finance Co. Ltd. [which lay down specific rule that self assessment tax is a tax covered under sec 244A(l) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by CSN 44 BSR 220094. In the application, the appellant admitted that by mistake the assessee has not claimed the same in the income tax return and the advance tax of ₹ 8,00,000/- was paid on 15.3.2008 but again deposited tax by way of self assessment tax of ₹ 5,80,870/- 3. The return was processed u/s 143(1) showing net tax payable for ₹ 47,84,760/- on 16.3.2010. At the time of processing of return u/s 143(1), long term capital gain was charged @30% instead of 20%. TDS credit was not fully given and interest u/s 234C was charged accordingly. After the intimation received, the appellant filed rectification application u/s 154 on 1.6.2012 in which he claimed advance tax for ₹ 8 lakh which was not claimed in the original return filed. There was a demand u/s 143(1) and he was entitled for refund of ₹ 2,34,153/- for assessment year 2011-12 which was also adjusted. Accordingly, he was entitled for net refund of ₹ 10,34,153. Ld. Assessing Officer has denied interest on excess tax paid and passed the order u/s 154 showing net tax refundable of ₹ 8,76,210. He did not give interest on excess tax paid of ₹ 8,00,000/. Against this order, h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld 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 of the use of money. In such a situation, where pre-paid 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 tax whilst staking a claim in the return, which claim is accepted, resulting in refund of self-assessment tax, the assessee would be equally entitled to interest thereon. Section 244A was inserted in the statute as a measure of rationalization to ensure that the assessee is duly compensated by the Government by way of payment of interest for monies legitimately belonging to the assessee and wrongfully retained by the Government without any gaps. Therefore, where the self-assessment tax paid by the assessee under section 140A is refunded, the assessee would be entitled to interest thereon since the self-assessment tax falls within the expression refund of any amount . The computation of interest on self-assessment tax has to be in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rest at [fifteen] per cent per annum on the amount of refund due from the date immediately following the expiry of the period of [three] months aforesaid to the date on which the refund is granted. [(1A) Where the whole or any part of the refund referred to in sub-section (1) is due to the assessee, as a result of any amount having been paid by him after the 31st day of March, 1975, in pursuance of any order of assessment or penalty and such amount or any part thereof having been found in appeal or other proceeding under this Act to be in excess of the amount which such assessee is liable to pay as tax or penalty, as the case may be, under this Act, the Central Government shall pay to such assessee simple interest at the rate specified in sub-section (1) on the amount so found to be in excess from the date on which such amount was paid to the date on which the refund is granted : Provided that where the amount so found to be in excess was paid in instalments, such interest shall be payable on the amount of each such instalment or any part of such instalment, which was in excess, from the date on which such instalment was paid to the date on which the refund is granted : Pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nalty specified in the notice of demand issued under section 156 is paid in excess of such demand. (2) If the proceedings resulting in the refund are delayed for reasons attributable to the assessee, whether wholly or in part, the period of the delay so attributable to him shall be excluded from the period for which interest is payable, and where any question arises as to the period to be excluded, it shall be decided by the [Principal Chief Commissioner or] Chief Commissioner or [Principal Commissioner or] Commissioner whose decision thereon shall be final. (3) Where, as a result of an order under sub-section (3) of section 115WE or section 115WF or section 115WG or sub-section (3) of section 143 or section 144 or section 147 or section 154 or section 155 or section 250 or section 254 or section 260 or section 262 or section 263 or section 264 or an order of the Settlement Commission under sub-section (4) of section 245D, the amount on which interest was payable under subsection (1) has been increased or reduced, as the case may be, the interest shall be increased or reduced accordingly, and in a case where the interest is reduced, the Assessing Officer shall serve on the as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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