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TMI Blog2016 (8) TMI 165X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioner had filed the return of income on 29.9.2008 showing total income of Rs. 56.02 crores (rounded off). During the year under consideration, the petitioner had received a subsidy of Rs. 38.35 crores under Kutch Area Incentive Scheme and offered such sum to tax as revenue receipt. However, during the course of assessment proceedings under a letter dated 7.11.2009, the assessee corrected this error and claimed that the receipt was in the nature of capital receipt and therefore, not exigible to tax. The assessee, therefore, sought to reduce its total income for the said assessment year to Rs. 17.67 crores (rounded off). The Assessing Officer, however, did not accept such revised claim on the ground that without revising the return, the assessee could not make a claim contrary to the declaration in the return. 4. The assessee carried the matter in appeal. The Commissioner (Appeals) allowed the appeal by order dated 28.3.2013 and directed the Assessing Officer to reduce the capital receipt of Rs. 38.35 crores from the total income of the assessee for normal as well as MAT provisions of the Income Tax Act,1961 (for short 'the Act'). 5. This order of the Commissioner thus res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... delay is attributable to the assessee. Therefore interest u/s. 244A of IT Act granted to you for the period from 1.4.2007 to 5.5.2009, is required to be withdrawn as the delay for this period was attributable to you as discussed above. It is also noticed that in the revised return of income dated 7.11.2009 liability for MAT u/s.115-JB was computed at Rs. 9,68,25,352/- on the book profit of Rs. 85,45,92,694/-. Thus in the revised return of income also you had admitted that the liability for MAT was Rs. 9,68,25,352/-. Subsequently in the appellate proceeding before the CIT(A), you had taken additional ground regarding you liability under MAT. The additional ground taken by was allowed in your favour by the CIT (A). This resulted in further refund. On verification of records it is seen that interest u/s. 244A of the IT Act, has been allowed for entire period. However such interest was required to be withdrawn for the period from 1.4.2008 to 31.3.2013 (date of CIT(A) order). 4. An order u/s.154 of the IT Act is therefore proposed to be passed for rectifying the aforesaid mistake apparent from records which resulted in excess grant of interest u/s 244A of the IT Act on refunds issued. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In the present case, no delay was caused by the petitioner. 10. On the other hand, learned counsel, Mr.P.G.Desai for the department opposed these petitions contending that the Commissioner had the authority to pass the said order in a reference made by the Assessing Officer. He has given cogent reasons why the petitioner was not entitled to interest on delayed refund. The petitioner had raised the claim before the Assessing Officer contrary to the return filed. It was only that the Appellate Commissioner accepted such a claim and therefore, the entire period till the Assessing Officer passed the order giving effect to the appellate order, would, therefore, fall under sub-section (2) of Section 244A of the Act. 11. Facts are not in dispute. As noted, the petitioner had filed the return of income in which the Kutch Area Incentive Scheme subsidy was initially shown as revenue receipt and offered to tax. During the course of assessment proceedings itself, the assessee wrote a letter to the Assessing Officer pointing out that there was an error. The subsidy was in the nature of capital receipt and therefore, not exigible to tax. Though the Assessing Officer did not accept such stand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 [under sub-sections (1) or (1A)], 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) xxx xxx xxx (4) xxx xxx xxx" 13. It can thus be seen that in the cases covered under subsection (1), the assessee would be entitled to interest on the refund at the specified rate. Under sub-section (2) of Section 244A, however, such interest would not be payable to the petitioner if the proceedings which resulted into refund are delayed by reasons attributable to the assessee, whether wholly or in part. In such a case, the period of delay so attributable to the assessee would be excluded from the period for which interest is payable. This sub-section also provides that where any question arises as to the period to be excluded, it shall be decided by the Principal Chief Commissioner or the Chief Commissioner or the Principal Commissioner or th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. Mere fact that the claim came to be granted by the Appellate Commissioner, would not change this position. In essence, what the Commissioner (Appeals) did was to allow a claim which in law, in his opinion, was allowable by the Assessing Officer. In other words, by passing order in appeal, he merely recognized a legal position whereby, the assessee was entitled to claim certain benefits of reduced tax. Surely, the fact that the assessee had filed the appeal which ultimately came to be allowed by the Commissioner, cannot be a reason for delaying the proceedings which can be attributed to the assessee. 17. The Department does not contend that the assessee had needlessly or frivolously delayed the assessment proceedings at the original or appellate stage. In absence of any such foundation, mere fact that the assessee made a claim during the course of the assessment proceedings which was allowed at the appellate stage would not ipso facto imply that the assessee was responsible for causing the delay in the proceedings resulting into refund. We may refer the decision of the Kerala High Court in case of Commissioner of Income-Tax V/s. South Indian Bank Ltd., reported in (2012) 340 ITR ..... 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