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TMI Blog2023 (4) TMI 89X X X X Extracts X X X X X X X X Extracts X X X X ..... h order passed u/s 154 dated 9-March-2017 as being bad in law and grant refund including interest u/s 244A of the Income-tax Act, 1961 ("the Act") accordingly. 2. WITHOUT PREJUDICE TO GROUND NO 1, assuming without accepting that Your Honours is of the opinion that the order u/s 154 dated 9-March 2017 is valid, then on the facts and in the circumstances of the case and in law: The Appellant Company prays that the Ld. ACIT has erred in withdrawing interest on refund due u/s 244A without appreciating that the proviso to Section 244A(1) applies in cases of refund determined on regular assessment in orders passed u/s 143(3) or 147 and not in a case of refund determined in order passed u/s 154 of the Act. The Ld. ACIT be directed to grant interest u/s 244A(1) on refund determined in order passed u/s 154 without application of the proviso thereto and issue refund order accordingly. 3. The Appellant Company reserves the right to add, alter, amend or delete any of the ground/s before or during the course of the hearing." 3. Shri Nitesh Joshi appearing on behalf of the assesssee narrating facts of the case submitted that the assessee filed its original return of income u/s 139(1) of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 140A of the Act is less than 10% of tax liability. The learned Counsel pointed that the amended provisions would not apply in the instant case as assessment u/s 143(3) was completed on 10/03/2015 and the subsequent rectification order u/s 154 was passed on 12/05/2015. The learned Authorised Representative further submitted that the refund granted to the assessee was not arising out of TDS/TCS or advance tax. This fact can be ascertain from the order passed u/s 154 of the Act. The learned Counsel vehemently submitted that there was no mistake apparent from record which was sought to be rectified by way of notice dated 28/10/2016 and subsequent order dated 09/03/2017. 4. Without prejudice to the primary contention, the learned Counsel submitted that once the order is passed u/s 143(3) of the Act, there is no distinction between advance tax and self-assessment tax. In support of his alternate contention, he placed reliance on the decision in the case of Modi Industries Limited Vs. CIT 216 ITR 579 (SC). 5. Per contra, Shri Abhijit Chaudhari representing the Department vehemently defended the impugned order passed u/s 154 of the Act dated 09/03/2017. The learned Departmental Repr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he refund is out of any tax paid under section 140A, such interest shall be calculated at the rate of one-half per cent for every month or part of a month comprised in the period, from the date of furnishing of return of income or payment of tax, whichever is later, to the date on which the refund is granted: Provided that no interest under clause (a) or clause (aa) shall be payable, if the amount of refund is less than ten per cent of the tax as determined under sub-section (1) of section 143 or on regular assessment." The aforesaid amendment by the Finance Act, 2016 was effective from 01/06/2016. In the instant case, the assessment order u/s 143(3) of the Act was passed on 10/03/2015 and the rectification order u/s 154 of the Act granting interest u/s 244A of the Act was passed on 12/05/2015, that is much prior to the amendment. Hence, the amended provisions would have no application. 9. The learned Counsel for the assessee further pointed that tax paid on self-assessment would fall u/s 244A(1)(b) of the Act. In support of this contention reliance is placed on the decision in the case of Stock Holding Corporation of India Limited (supra). In the said case, the Hon'ble jurisdi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is to be noted that nowhere does the CBDT even remotely suggest that interest is not payable by the Department on self-assessment tax. Moreover, the amount paid under Section 140A of the Act on self assessment is an amount payable as by way of the tax after noticing that there is likely to be shortfall in the taxes already paid. Thus this payment is considered to be a tax under the aforesaid provision. 8. The contention of revenue is that no interest at all is payable to the petitioner under Section 244A(1)(a) and (b) of the Act unless the amounts have been paid as tax. It would not cover cases where the payment is gratuitous as is evident from the fact that the petitioner in its computation after paying tax on self assessment of Rs 2.60 crores seeks a refund of Rs 47 lacs According to him it has to be refund of amounts paid as tax. We find that Section 244A(1) of the Act commences with the word "when refund of any amount becomes due to the assessee under this Act. Sub-clause (b) thereof commences with the words "in any other case "The words used in Section 244A(1) of the Act are clear inasmuch as it Provides that refund of any amount that become due to any assessee under the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ciples to pay the interest on sums wrongfully retained. 51. The Hon'ble Jurisdictional High Court in the case of CIT v. Engineers India Ltd [2015] 55 taxmann.com 1/232 Taxman 287/373 ITR 377, based on the judgment of the Hon'ble Apex Court in the case of Gujarat Fluoro Chemicals [2014] 42 taxmann.com 1/222 Taxman 349/[2013] 358 ITR 291 held that the assessee is not entitled to get interest u/s 244A on the refund of self-assessment tax which was voluntarily paid u/s 140A and did not agree with the decision of the Coordinate Bench of High Court in the case of Sutlej Industries Ltd. (supra). 52. The Hon'ble Apex Court, having gone through the different views expressed by the Hon'ble Jurisdictional High Court, referred back the matter for adjudication by larger bench. 53. The Hon'ble High Court of Kolkata in the case of CIT v. Birla Corpn. Ltd [2016] 66 taxmann.com 276/238 Taxman 482 held that clause (1)(b) of section 244A is residual in nature which prescribes interest on refund from the date of payment of tax in cases which are not covered by section 244A(1)(a). Necessarily, it will cover interest on refund of excess self-assessment tax paid by the assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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