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TMI Blog2019 (6) TMI 1213X X X X Extracts X X X X X X X X Extracts X X X X ..... already granted towards the interest component and balance left if any shall be adjusted towards the tax component. We direct the A.O to allow interest on self assessment tax and also allow interest on such interest. - ITA No.2764/Kol/2003 - - - Dated:- 19-6-2019 - Shri S.S. Godara, JM And Dr. A.L. Saini, AM For the Assessee : Shri Radhey Shyam, CIT DR For the Respondent : Shri S.K. Tulsiyan, Advocate And Puja Somani, ACA ORDER PER DR. A. L. SAINI: The captioned appeal filed by the Revenue, pertaining to assessment year 1985-86, is directed against the order passed by the Commissioner of Income Tax (Appeal)-IX, Kolkata, which in turn arises out of an assessment order passed by the Assessing Officer u/s 154 of the Income Tax Act, 1961 (in short the Act ) dated,19/03/2012. 2. Grounds of appeal raised by the Revenue are as follows: 1. Ld. CIT(A) had erred in directing the A.O. to allow interest u/s 244A of the I.T. Act, 1961 on tax paid u/s 140A violating the provisions of Section 244A of the I.T. Act, 1961. 2. Ld. CIT( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lance is treated as excess amount of advance tax which has to be refunded with interest under section 214. Further, the assessee also cited a number of decisions of different High Courts wherein it has been repeatedly held that the assessee is entitled to interest on self-assessment tax. 6. The learned CIT(A) perused the facts and the submissions made by the assessee and vide order dated 30/07/2003 directed the learned AO to allow interest under section 244(1A) of the Act, on the excess self- assessment tax paid. The relevant portion of the ld CIT(A)`s order is reproduced below: 11. On careful consideration of the submission and facts, it reveals that the Assessing Officer has not granted interest on self- assessment tax paid amounting to ₹ 27,01,593/- paid on 07-03- 1988 in the 154 order, dated 19/03/2002. No reasons are also given for not allowing interest. In view of the decisions of the High Courts cited by the assessee and the Apex Court's decision in the case of Modi Industries Ltd vs CIT (1995) 216 ITR 759, the Assessing Officer is directed to allow interest under section 244(IA)/214(1A) on self- assessment tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erest on such interest The Hon'ble High Court vide order dated 15/02/2019, did not agree with the ITAT on the issues of grant of interest and interest on interest on excess payment of self-assessment tax, being a debateable issue. The High Court remanded the entire matter back to the Hon'ble ITAT directing the ITAT to take a holistic view of the entire matter, upon hearing the parties and passing a reasoned order. The relevant extracts of the judgment is reproduced below: In order that there is a complete resolution of disputes between the parties the tribunal should not insist on technicalities as to whether the issue raised by the appellant u/s 154 of the Income Tax Act, 1961 was debatable or not debatable and thereafter decide whether to entertain the appeal or not. It is no doubt a tricky situation where both debatable and non debatable issues are involved. The Tribunal should approach the problem holistically. 10. Now, in view of the Hon'ble High Court's order (supra), the matter came back before this Tribunal. The issues before the Tribunal are as follows: (a). Whether the assessee is en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee s own case for the Assessment Year 2002-03, cited above. He further submitted that the Hon ble Jurisdictional High Court has in the assessee s own case in the Commissioner of Income-tax, Kolkata-I v. Peerless General Finance Investment Co. Ltd [2015] 59 taxmann.com 37 (Calcutta), adjudicated the issue in favour of the assessee. 3. We have heard rival contentions. On careful consideration of the facts and circumstances of the case, perusal of the papers on record, orders of the authorities below as well as case law cited, we hold as follows:- The Hon ble Supreme Court in the case of K. Lakshmanya Co. v. Commissioner of Income Tax (supra) has analyzed Section 244A of the Act and held as follows:- 10. The present case would fall outside sub-clauses a and aa of this provision and, therefore, fall within the residuary clause, namely sub-clause (b) of Section 244(A). The Madras High Court in Needle Industries Pvt. Ltd. case (supra) concerned itself with the position prior to the advent of Section 244A. It found that the expression refund of any amount used by Sections 240 and 244 would include ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14. In CIT v. H.E.G. Ltd. [2010] 189 Taxman 335 (SC) , this Court was squarely confronted with the meaning of the expression where refund of any amount become due to the assessee in Section 244(A)(1). This question was answered as follows: '5.In the present case, as stated above, there are two components of the tax paid by the assessee for which the assessee was granted refund, namely TDS of ₹ 45,73,528 and tax paid after original assessment of ₹ 1,71,00,320. The Department contends that the words any amount will not include the interest which accrued to the respondent for not refunding ₹ 45,73,528 for 57 months. We see no merit in this argument. The interest component will partake of the character of the amount due under Section 244-A. It becomes an integral part of R. 45,73,528 which is not paid for 57 months after the said amount became due and payable. As can be seen from the facts narrated above, this is the case of short payment by the Department and it is in this way that the assessee claims interest under Section 244-A of the Income Tax Act. Therefore, on both the aforestated grounds, we are of the the view t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied with. However, Mr. K.Radhakrishnan, learned senior counsel appearing for the respondent-Revenue, has strongly relied upon the decision of this Court in Anjum M.H. Ghaswala's case (supra). In this judgment, this Court held that the Settlement Commission was introduced into the Incometax Act for the purpose of quick settlement of cases before it, so that the the tax due to the Revenue gets collected at the earliest. The object of this exercise is not to assist tax evaders. In so holding, this Court held that Section 245(D)(6) being procedural in nature, cannot be used to locate any power to waive interest, if it is not otherwise waived under some other substantive provision in the Income-Tax Act. 17. Ultimately, this Court arrived at the conclusion that the Commission cannot either waive or reduce interest which is statutorily payable unless there is express power to do so in that behalf. However, while so saying, the Court went on to clarify that the circulars issued pursuant to the powers under Section 119 of the Act, which empower the authorities under the Act to waive or reduce interest, may be availed b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further we find it appropriate to first reproduce and discuss the reasoning given by the Tribunal in earlier years. The relevant part of order dated 23.06.2014 is reproduced hereunder for the sake of ready reference: 4. . 5 . 6. .. 3.5 From the perusal of the above, it is noted by us that the Tribunal has relied upon the judgment of Hon'ble Delhi High Court in the case of India Trade Promotion Organisation (supra), wherein it was inter-alia held that in a situation where only part amount is refunded by the department, then payment of interest on the balance amount due from the department to the assessee, on a particular date, does not amount to payment of interest on interest. Their lordships, taking support from the judgment of Hon'ble Supreme Court in the case of CIT v. HEG Ltd. [2010] 324 ITR 331/189 Taxman 335, observed as under: '14. Matter was taken by the Revenue before the Supreme Court in the case of HEG Limited and the SLP was granted and civil appeal was registered. The Supreme Court thereupon answered the question against the Reve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee with effect from 1st April, 2010, the said amount is refunded along with interest due and payable under Section 244A on 31st March, 2013, then no further interest is payable. However, if only ₹ 1 lac is refunded by the Revenue on 31st March, 2013 and the interest accrued on ₹ 1 lac under Section 244A is not refunded, the Revenue would be liable to pay interest on the amount due and payable but not refunded. Interest will not be due and payable on the amount refunded but only on the amount which remains unpaid, i.e, the interest element, which should have been refunded but is not paid. In another situation where part payment is made, Section 244A would be still applicable in the same manner. For example, if ₹ 60,000/- was paid on 31st March, 2013, Revenue would be liable to pay interest on ₹ 1 lac from 1st April, 2010 till 31st March, 2013 and thereafter on ₹ 40,000/-. Further, interest payable on ₹ 60,000/-, which stands paid, will be quantified on 31st March, 2013 and on this amount, i.e., interest amount quantified, Revenue would be liable to pay interest under Section 244A till payment is made. . . . ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts from its citizens. It is further noted by us that Hon'ble Delhi High Court has already decided this issue in clear words which has been followed by the Tribunal in assessee's own case in the earlier years. It is further noted by us that assessee is not asking for payment for interest on interest. It is simply requesting for proper method of adjustment of refund and for following the same method which was followed by the department while making collection of taxes. Under these circumstances, we find that judgment of Hon'ble Supreme Court in the case of Gujarat Fluoro Chemicals (supra) is not applicable on the facts of the case before us and thus Ld. CIT (A) committed an error in not following the decisions of the Tribunal of earlier years in assessee's own case as well as judgment of Hon'ble High Court in the case of India Trade Promotion Organisation (supra). 3.9 Before parting with, we are reminded of a recent judgment of Hon'ble Supreme Court in the case of Union of India v. Tata Chemicals Ltd. [2014] 363 ITR 658/822 Taxman 225/43 taxmann.com 240 wherein Hon'ble Supreme Court has discussed at length about moral and leg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there being no express statutory provision for payment of interest on the refund of excess amount/tax collected by the Revenue, cannot shrug off its apparent obligation to reimburse the deductors lawful monies with the accrued interest for the period of undue retention of such monies. The State having received the money without right, and having retained and used it, is bound to make the party good, just as an individual would be under like circumstances. The obligation to refund money received and retained without right implies and carries with it the right to interest. Whenever money has been received by a party which ex aequo et bono ought to be refunded, the right to interest follows, as a matter of course.' 3.10 It is noted from the observations of the Hon'ble Supreme Court that it has been observed that whatever money has been received by the department, it ought to be refunded ex aequo et bono. It is a Latin phrase which means 'what is just and fair' or 'according to equity and good conscience'. Something to be decided ex aequo et bono is something that is to be decided by principles of what is fair and just. A decision- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rring an appeal before us against the order of the ld CITA dated 30.9.2008. Hence the revenue appeal deserve to be dismissed on that count also. 6.3. Hence we hold that the grounds raised by the revenue vide Grounds 1 to 4 deserve to be dismissed for more than reason as stated above. 7. The next issue to be decided in this appeal is as to whether the ld CITA was justified in directing the ld AO to exclude the provision for dimunition in value of investments amounting to ₹ 29,81,59,433/- and provision for Non-Performing Assets amounting to ₹ 19,57,60,485/- while computing the book profits u/s 115JB of the Act, in the facts and circumstances of the case. 7.1. During the course of hearing, the ld AR fairly admitted that the assessee had challenged the retrospective amendment in this regard brought in section 115JB of the Act by way of a Writ Petition before the Hon ble Calcutta High Court in W.P. No. 1069 of 2010 and the same was dismissed by the Hon ble Court vide its order dated 3.5.2017. Accordingly, he fairly agreed with the decision of the ld AO in this regard. Hence the Ground Nos. 5 to 7 rai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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