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TMI Blog2024 (2) TMI 930X X X X Extracts X X X X X X X X Extracts X X X X ..... words amount of refund must mean, in our view, the whole of the refund, and not an artificial split as canvassed by the Department. Therefore, irrespective of what the words regular assessment mean, the proviso would not be attracted. The words amount of refund must be given their natural/neutral meaning and must, therefore, mean whole of the refund. These words must not be read as permitting an artificial split of the amount into various components of advance tax, TDS, SA Tax and tax paid pursuant to demand. This Court, in J.K. Industries V/s. Krishna Sahal, Commissioner of Income Tax [ 2023 (6) TMI 1037 - BOMBAY HIGH COURT] wherein the word amount in the context of interest payable under the old Section 244A(1A) of the Act was interpreted, held, as being a neutral expression wide enough to include even the interest collected by the Department alongwith the tax and it was consequently held that appellant therein was entitled to interest on the aggregate amount. If the Revenue s contention that appellant is entitled to interest on advance tax and TDS under Section 244A(1)(b) of the Act is to be upheld, then appellant would be entitled to interest from the date of actual payment (i. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeals) [CIT(A)] who, by an order dated 29th January 1993, disposed the appeal. The Assessing Officer on 31st May 1993 passed an order giving effect (OGE) to the CIT(A) s order computing income of appellant at Rs. 35,93,17,870/-, i.e., even below the originally returned income of Rs. 43,64,37,800/- and determining tax thereon at Rs. 18,99,09,619/-. In the circumstances, appellant was entitled to a refund of Rs. 5,24,29,950/-. Given that the income determined pursuant to the CIT(A) s order was lower than the returned income, the refund necessarily included, not only taxes appellant paid pursuant to demands raised by the Assessing Officer under the assessment framed but also a portion of the advance tax, TDS and self assessment tax paid on the returned income. Herein below is a table of returned income and refund due : Sr. No. Particulars Actual Amount 1 Returned income 43,64,37,800 2 Tax paid on returned income : Advance tax + TDS : 450 SA tax : 50 20,44,29,076 2,43,33,634 ------------------- 22,68,62,710 3 Income as per 143(3) Order (Regular Assessment) 45,91,84,440 4 Tax determined as per 143(3) Order 24,35,95,193 5 Income pursuant to CIT(A) Order 35,93,17,870 6 Tax determined on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent meant the assessment pursuant to the CIT(A) order. 8. The Assessing Officer/CIT(A) have based their conclusion that the advance tax and TDS component in the amount of refund is hit by the proviso to Section 244A(1)(a) of the Act, on the following working : a. Income as per original return (returned income) 43,64,37,800 b. Income determined after CIT(A) Order 35,93,17,870 c. Tax paid on returned income 22,68,62,710 (A) d. Tax determined on income as per CIT(A) s Order 18,99,09,619 (B) e. Excess tax paid on returned income over the Income pursuant to CIT(A) Order [(A)-(B)] 3,69,53,091 (C) f. SA Tax out of the Excess Tax 2,24,33,634 (D) g. Balance therefore is Advance Tax/TDS component [(C) (D)] 1,45,14,457 (E) h. Tax on income as per original assessment 24,35,95,193 i. 10% of tax on assessed income 2,43,59,519 j. Tax determined on income as per CIT(A) s Order 18,99,09,619 k. 10% of tax on assessed income 1,89,90,961 9. It is against this order the appeal is filed. On 29th July 2004 the appeal was admitted and the following substantial questions of law were framed : (i) Whether on the facts and in the circumstances of the case the Tribunal was justified in holding that the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mission under sub-section (4) of section 245D, the amount on which interest was payable under sub-section (1) has been increased or reduced, as the case may be, the interest shall be increased or reduced accordingly, and in a case where the interest is reduced, the Assessing Officer shall serve on the assessee a notice of demand in the prescribed form specifying the amount of the excess interest paid and requiring him to pay such amount; and such notice of demand shall be deemed to be a notice under section 156 and the provisions of this Act shall apply accordingly. (4) The provisions of this section shall apply in respect of assessments for the assessment year commencing on the 1st day of April, 1989, and subsequent assessment years.] 11. At the outset, the ITAT has completely misdirected itself in adjudicating the controversy involved inasmuch in the facts and circumstances of the case it is wholly academic whether the words regular assessment appearing in the proviso to Section 244A(1)(a) of the Act means the original assessment order or the assessment order passed giving effect to the CIT(A) order. The real controversy is whether the words amount of refund in the proviso must b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble if the amount of refund is less that 10% of tax as determined under sub-Section (1) of Section 143 of the Act or on regular assessment . 14. Apart from the above, the proviso refers to refund on the basis of tax determined under Section 143(1) of the Act or regular assessment, which will necessarily include not only advance tax/TDS paid during the year but also the SA Tax paid. The Revenue is, therefore, not right. The Revenue s submission that the amount of refund to be considered for the purposes of the proviso must only be the advance tax/TDS portion of the refund cannot to be accepted. If the Revenue s contention is accepted then appellant will not be compensated for the monies lying with the Department from 1st April 1989, which is not only contrary to the law laid down by the Hon ble Apex Court but also contrary to the plain and simple reading of the Section 244A(1)(a) of the Act which entitles appellant to interest on the advance tax and TDS from the first day of assessment year (in the present case 1st April 1989). If the Revenue s contention that appellant is entitled to interest on advance tax and TDS under Section 244A(1)(b) of the Act is to be upheld, then appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is this decision which is relevant for the purposes of deciding the controversy in the present case. The Hon ble Apex Court has clearly explained the purpose of the amended law and has held in paragraph 30 that refund becomes due when tax deducted at source, advance tax paid, self-assessment tax paid and tax paid on regular assessment exceeds tax chargeable for the year as a result of an order passed in appeal or other proceedings under the Act. When refund is of any advance tax (including tax deducted/collected at source), interest is payable for the period starting from the first day of the assessment year to the date of grant of refund . Reliance placed by the Revenue on the decision of the Hon ble Punjab and Haryana High Court in the case of Commissioner of Income Tax V/s. Hansa Agencies Pvt. Ltd. (1998) 234 ITR 271 is equally misplaced as it merely relies on the decision of the Hon ble Apex Court in Modi Industries (Supra) and is not relevant to decide the controversy under the amended law and in the present case. 17. In the circumstances, the questions of law as framed on 29th July 2004 have to be answered in favour of assessee, i.e., appellant. Appellant would be entitled ..... X X X X Extracts X X X X X X X X Extracts X X X X
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