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TMI Blog2020 (1) TMI 718X X X X Extracts X X X X X X X X Extracts X X X X ..... .(b) On the facts and in the circumstances of the case and in law, the appellant prays that the order of the learned CIT passed u/s.263 of the Income Tax Act, 1961 may be cancelled being void ab-initio and bad in law. l.(c) The Id. CIT erred in invoking provisions of revisional jurisdiction u/s 263 without appreciating that no such power can be exercised in terms of Explanation (c) to section 263(1) being an appeal lying before Income Tax Appellate Tribunal with regard to allowing of interest u/s 244A of IT Act, 1961. 1.(d) The Id. CIT erred in exercising revisional jurisdiction u/s 263 of the IT Act, 1961 without appreciating that the issue raised in regard to the interest on interest granted u/s 244A of IT Act, 1961 is consequential to CIT(A) order to determination of total income vide order dated 11.03.2013 giving effect to CIT(A) order, which does not involve any assessment and as such doing so is wrong and contrary to the facts of the case, the provisions of Income Tax Act, 1961, and the Rules made thereunder. 2.(a) On the facts and in the circumstances of the case and in law, the learned Commissioner of Income Tax erred in holding that the learned AO without application ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the interest of revenue insofar as it relates to allowance of interest on interest u/s 244A. The AO was directed to pass the fresh order after detailed verification of facts after giving opportunity to the assessee. Before revising the order, the Ld. PCIT identified four issues, namely; "i) The assessee's return of income was processed summarily vide order u/s.143(1) dated: 31.3.2004 and granted refund of Rs. 53,86,52,675/- along with interest u/s 244A on 31.03.2004. ii) Subsequently the income was assessed under scrutiny assessment passed u/s.143(3) of the I.T. Act on 28.01.2005. Later on series of effects were given to CIT(A)' order, ITAT's order and rectifications u/s. 154 resulting in either demand or refund. The details of which are tabulated below: Order u/s A.I Demand Refund along with interest Refunded Date 143(1) dt:31.3.2004 2217800932 538652675 31.3.2004 143(3) dt: 28.1.2005 4028950550 154dt:22.2.2005 4028950550 768343023 Effect to CIT(A)'s order, dt: 19.6.2006 4005894927 14229049 14.11.2006 154 dt.6.3.2007 4005855927 143(3) rws 147 dt:31.10.2008 402735 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 15,81,19,323/- after giving effect to the order of CIT(A) dated 24.12.2012. The refund which was received by the assessee was adjusted against the interest amount first and balance, if any, was adjusted against tax amount. The assessee relied upon the decision of Hon'ble Supreme Court in the case of Sandvik Asia Ltd vs CIT 150 Taxman 591 (SC). The assessee finally stated that there was no error in granting interest on interest leading to excess refund and hence, provisions of section 263 were not applicable in the present case. The assessee requested to drop the proceedings u/s 263. 5. The reply filed by assessee was not accepted by Ld. PCIT by taking view that excess refund of amount of Rs. 4,04,64,132/- is granted in spite of the fact that nowhere department withheld / retained the payment of interest wherein refund of tax was due. The refund of tax along with interest was granted after giving effect to the appellate order and rectification orders and the assessee was not eligible for any compensation in the form of interest on interest u/s 244A. The Ld. PCIT further held that as per provisions of section 244A of the Act, the statute provide the grant of simple interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le Supreme Court in the case of Sandvik Asia Ltd Vs CIT (supra). The decision rendered by Hon'ble Supreme Court is binding as per Article 141 of the Constitution of India. Therefore, the AO passed the order in accordance with the mandate of law determined by Hon'ble Apex Court, which cannot be considered as erroneous for revising the order. The twin condition as enunciated u/s 263, i.e. order is erroneous and insofar as it is prejudicial to the interest of revenue, must be satisfied for revising the order. The Ld.AR of the assessee has strongly relied upon the decision of Hon'ble Supreme Court in Sandvik Asia Ltd vs CIT (supra). 8. On the other hand, the Ld. DR for the revenue supported the order of Ld. PCIT. The Ld. DR has submitted that the order passed by AO dated 11-03-2013 is not only erroneously but also prejudicial to the interest of revenue. The Ld. DR for the revenue besides strongly relying upon the order of ld PCIT also relied on the full Bench decision of Hon'ble Apex Court in CIT Vs Gujarat Flouro Chemicals (2014) 42 taxmann.com 1. The Ld. DR for the revenue further submits that in CIT Vs Gujarat Flouro Chemicals (supra), the full Bench of Hon'ble Apex Court clarified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on'ble Supreme Court in Gujarat Flouro Chemicals (supra), the entire order of Full Bench of Hon'ble Apex Court is extracted below:- "1. Doubting the correctness or otherwise of the decision of this Court in the case of Sandvik Asia Ltd. v. CIT [2006] 280 ITR 643/150 Taxman 591, a bench of two learned Judges has referred the following question of law for our consideration and authoritative pronouncement by order dated 28.08.2012: "The question which arises in this case is, whether interest is payable by the Revenue to the assessee if the aggregate of installments of Advance Tax OF TDS paid exceeds the assessed tax?" 2. In the aforesaid order of reference, this Court has briefly noticed the facts and the discussion in Sandvik Asia Ltd.'s case (supra) wherein, the main issue for consideration and determination by this Court was, whether the assessee is entitled to be compensated by the Revenue for delay in payment of the amount admittedly due to the assessee. This Court has noticed inter alia the provisions of Section 214 of the Income Tax Act, 1961 (for short 'the Act') and in light of the same has doubted the correctness of the decision in Sandvik Asia Ltd.'s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t for decades be compensated for the great prejudice caused to it due to the delay in its payment after the lapse of statutory period. In the facts of that case, this Court had come to the conclusion that there was an inordinate delay on the part of the Revenue in refunding certain amount which included the statutory interest and therefore, directed the Revenue to pay compensation for the same not an interest on interest. 8. Further it is brought to our notice that the Legislature by the Act No. 4 of 1988 (w.e.f. 01.04.1989) has inserted Section 244A to the Act which provides for interest on refunds under various contingencies. We clarify that it is only that interest provided for under the statute which may be claimed by an assessee from the Revenue and no other interest on such statutory interest. 9. With the aforesaid clarification we now refer back all the matters before a Two Judge Bench of this Court to consider each case independently and take an appropriate decision one way or the other." 11. In view of the aforesaid factual and legal discussion, we are of the view that the case law in Sandvik Asia Ltd (supra) is not helpful to the assessee. As we have already held tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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