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TMI Blog2016 (9) TMI 456X X X X Extracts X X X X X X X X Extracts X X X X ..... nal was right in law in holding that interest u/s.234B should be charged on the amount after considering refund of Rs. 59,38,056/which was issued on passing intimation u/s.143(1)(a) of the I.T. Act?" 2. The assessee is a public company engaged in the business of manufacture of detergents and intermediate industrial products. For the A.Y. 1994-95, the assessee filed its return on 23.11.1994 declaring total income of Rs. 20,39,77,990/. The return was processed u/s.143(1)(a) and ultimately, the assessment order was passed on 08.01.1997. Against the said order, the assessee preferred appeal before the CIT(A). The CIT(A) partly allowed the appeal vide order dated 22.12.1998. However, being aggrieved by the order of CIT(A), the Revenue preferre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taxmann.com 221 (Gujarat) wherein, the following observations have been made in Para5.6 of the said decision: "5.6 This very issue came up for scrutiny before the Bombay High Court in the case of Commissioner of Incometax v. Indian Oil Corporation Ltd., reported in 2010 TAXMAN 466 and the Bombay High Court has held that addition of explanation (2) to section 234D of the Act by Finance Act, 2012, with retrospective effect from June 01, 2003, is made applicable even to the period under assessment year 2004-2005. In respect of excess refund granted to the assessee under section 143(1) of the Act, the interest was payable by the assessee even if it was received prior to June 01, 2003, so long as the proceedings of the concerned assessment ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate of grant of refund under section 143(1) of the Act. The classification on the basis of the completion of assessment proceedings is not a subject matter of challenge before us. Therefore, the date of grant of refund is immaterial to determine the applicability of section234D of the Act. In the circumstances the submission of the respondent that section 234D of the Act only applies to refunds granted prior to 1/06/2003 is not acceptable. (22) It must be borne in mind that refund which is granted under section 143(1) of the Act to an assessee is qua an assessment proceeding for a particular assessment year. The refund granted is qua an assessment year. The refund emanates from assessment proceedings for a particular assessment year. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess of the amounts refundable on regular assessment, interest on the excess amount would be payable. In any case after the introduction of Explanation 2 there can be no doubt that even where refund is granted prior to 1/06/2003 the same would carry interest provided the proceedings for assessment are completed after 1/06/2003. The respondent has not contended that the Explanation 2 to section 234D of the Act is not retrospective. Their only contention is that it would not apply to refunds granted prior to 1/06/2003 even in respect of assessments completed after the cutoff date of 1/06/2003. This submission ignores the fact that Explanation 2 which is declaratory in nature clarifies that the section would apply to an assessment year even bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enue, took us through the provisions of Section 143(4) of the Act and submitted that in light of this provision, the assessee is bound to pay interest u/s.234B of the Act. 4.1 In support of the above submission, reliance was placed on a judgment of this Court in the case of Jt. CIT v. Sumit Industries Ltd., (2015) 229 Taxman 0369 (Gujarat) wherein, it has been held that prerequisite condition for applicability of S.234B was that assessee was liable to pay tax u/s.208 and expression "assessed tax" was defined to mean tax on total income determined u/s.143(1) or 143(3) as reduced by amount of tax deducted or collected at source and there was no exclusion of S.115J/115JA in levy of interest u/s.234B. 4.2 Reliance was also placed on a judgmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unal committed serious error in law in holding that interest u/s.234B should have been charged in the present case. 7. Insofar as the judgment rendered in Sumit Industries' case (supra) relied upon by learned Standing Counsel Mr. Mehta is concerned, the same would not apply to the case on hand since that case pertained to payment of interest u/s.234B and 234C in respect of tax determined on the basis of Sections 115JA and 115JB of the Act. Whereas, in this case, the issue relates to refund on passing intimation u/s.143(1) of Act. Further, the decision of Apex Court in Bhagat Construction's case (supra) will also not apply to the present case since in that case advance tax was not paid. Therefore, both the decisions relied upon by the learn ..... X X X X Extracts X X X X X X X X Extracts X X X X
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