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TMI Blog2017 (5) TMI 308X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act. The circular of the CBDT dated 26th April 2016 accepts the above proposition laid down in Union of India v. Tata Chemicals Limited (supra) in its entirety. The sum found refundable to the Petitioners as a result of the waiver of interest order passed by the CCIT is a definite sum that was wrongly deducted from the Petitioners as interest. Payment of interest on that sum by the Revenue cannot be characterised as payment of 'interest on interest'. Thus this Court sets aside the impugned orders of the AO denying the Petitioners interest on the amounts refunded to them pursuant to the waiver order dated 30th March 2015 of the CCIT. The interest amount as claimed by the Petitioners on the amount refunded to them will now be paid by the Department to the Petitioners within four weeks from today in terms of Section 244 A (1) (b) of the Act from the date of recovery till the date of payment. - W.P.(C) 1011/2016 W.P.(C) 1012/2016 & W.P.(C) 1183/2016 - - - Dated:- 1-5-2017 - S. MURALIDHAR CHANDER SHEKHAR JJ. Petitioner Through: Mr. Sandeep Sapra with Mr. Manu K. Giri, Advocates. Respondents Through: Mr. Ashok Manchanda, Senior standing counsel and Mr. Raghven ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0th March 2015 waived all the eligible amounts of interests for late payments as under: Name of Assessee AY Amount waived Brisk Capital P Ltd 1993-94 ₹ 8,31,016 Brisk Capital P Ltd 1993-94 ₹ 25,47,001 Brisk Capital P Ltd 1994-95 ₹ 59,678 Brisk Capital P Ltd 1995-96 ₹ 12,54,988 Brisk Capital P Ltd 1996-97 ₹ 15,31,016 TOTAL ₹ 62,24,677 Naresh Agarwal 2002-03 ₹ 73,62,609 Naresh Agarwal 2004-05 ₹ 4,62,945 Naresh Agarwal 2006-07 ₹ 1,66,097 Naresh Agarwal 2006-07 ₹ 6,787 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the Department to pay the Petitioners simple interest @ 6% from the date of recovery of the interest till the date of refund. 8. Mr. Sandeep Sapra, learned counsel appearing for the Petitioners, submits that the expression in any other case occurring in Section 244A (1) (b) of the Act would include the interest waived by the CCIT pursuant to the applications filed by the Petitioners under Section 220 (2A) of the Act. This was a quantified sum representing interest which ought not to have been charged in first place. According to him, by directing the said sum to be refunded together with interest, the letter and spirit of Section 244A (1) (b) of the Act would in fact be complied with. In other words, this should not be viewed as interest on interest as is sought to be contended by the Department. Mr. Sapra submitted that with the language of statute being clear and unambiguous there should be no difficulty in the Court directing that the Petitioners should be paid the interest on the said sum under Section 244 A (1) (b) of the Act. 9. Reliance was placed by Mr. Sapra on the decision in Union of India v. Tata Chemicals Limited (2014) 363 ITR 658 and Circular No. 11/2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the Supreme Court in Commissioner of Income Tax, Gujarat v. Gujarat Fluoro Chemicals (2014) 43 Taxman.com 350 (SC) where it was held that only that interest provided for under the statute may be claimed by an Assessee and no other interest. 13. First, the Court would like to recapitulate the facts of the present case. The assessments of the Petitioners for several years were held up on account of the proceedings before the Special Court. In the case of Brisk Capital Market Services Limited, the relevant AYs were 1993-94 to 1996-97; in the case of Preeti Aggarwala, the relevant AY was 1998-99 and in the case of Naresh Aggarwal the relevant AYs were 2002-03 to 2006-07. It is not necessary at this stage for the Court to examine whether it was the Petitioners or the Department who were responsible for the delay in finalising the assessments. Delays were also on account of the proceedings before the Special Court and elsewhere. 14. It is also not necessary to examine if the Petitioners were justified in seeking waiver of interest under Section 220 (2) of the Act. Their applications seeking waiver of interest filed on 22nd August 2008 were finally disposed of by the CCIT o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tes of payment of the tax or penalty to the date on which the refund is granted. Explanation For the purposes of this clause, date of payment of tax and penalty means the date on and from which the amount of tax or penalty specified in the notice of demand issued under Section 156 is paid in excess of such demand. 16. It is not in issue that neither sub-clauses (a) (aa) of sub-section (1) of Section 244 A of the Act applies in the present case. Clause (b) deals with 'any other case - which has to be a case other than refund of taxes or penalties. Clause (b) stipulates that in any other case the interest payable shall be calculated at the rate of one-half per cent for every month or part of a month comprised in the period or periods from the date or, as the case may be dates of payment of the tax or penalty to the date on which the refund is granted. 17. This has to be read with the expression refund of any amount that becomes due occurring in Section 244 A (1) of the Act. When the entire sub-section (1) of Section 244 A of the Act is read as a whole, the legislative intent does not appear to be to limit the expression any amount becomes due occur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 244A on refund of excess self-assessment tax. 20. As correctly noted in Commissioner of Income Tax v. Birla Corporation Limited (supra), there was a divergence of views of the Division Benches of this Court in CIT v. Sutlej Industries (2010) 325 ITR 331 (Del) and CIT v. Engineers India Limited Ltd. (2015) 373 ITR 377 (Del) . In the latter decision, the Court purportedly followed the decision of the Supreme Court in Commissioner of Income Tax, Gujarat v. Gujarat Fluoro Chemicals (supra) which did not deal with the issue of refund of excess self-assessment tax. It may be noted at this stage that the question of the conflict between the aforementioned two decisions of this Court in CIT v. Sutlej Industries (supra) and CIT v. Engineers India Limited (supra) has been referred to a larger Bench of this Court. However, the issue in the present case does not involve refund of excess self-assessment tax. 21. Turning to the decision of the Supreme Court in Union of India v. Tata Chemicals Limited (supra) the question that arose was whether the Revenue was liable to pay interest on the refund of tax made to the Resident/Deductor under Section 240 of the Act. Answerin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct. The Parliament has introduced a new Section in the place of Sections 214, 243 and 244 in respect of assessment for the assessment year 1989-90 and onwards. 26. The language of the Section is precise, clear and unambiguous. Sub-Section (1) of Section 244A speaks of interest on refund of the amounts due to an assessee under the Act. The assessee is entitled for the said amount of refund with interest thereon as calculated in accordance with clause (a) (b) of sub-Section (1) of Section 244A. In calculating the interest payable, the section provides for different dates from which the interest is to be calculated. ..... 38. Providing for payment of interest in case of refund of amounts paid as tax or deemed tax or advance tax is a method now statutorily adopted by fiscal legislation to ensure that the aforesaid amount of tax which has been duly paid in prescribed time and provisions in that behalf form part of the recovery machinery provided in the taxing statute. Refund due and payable to the assessee is debt owned and payable by the Revenue. The Government, there being no express statutory provision for payment of interest on the refund of the excess amount/tax co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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