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TMI Blog2024 (9) TMI 855X X X X Extracts X X X X X X X X Extracts X X X X ..... ent? HELD THAT:- In the present case, the order giving effect to the CIT(A)'s order was passed on 04.05.2016, and the refund was granted on 05.07.2017. Therefore, the provisions of section 244A(1A) are applicable to the period from 01.06.2016 to 05.07.2017. The decision in Tata Sons Pvt. Ltd. [ 2023 (12) TMI 875 - ITAT MUMBAI] is directly applicable to this case. Tribunal held that the refund should be first adjusted against the interest component. While holding so the Tribunal emphasised that when an assessee pays a tax demand, the amount is first adjusted towards any interest due, and only the remaining balance, if any, is applied towards the tax payable. It also stated that there is no specific provision in Section 244A regarding the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as the Act ), dated 26.08.2021. The said order of CIT(A) is directed against the order passed by the Assistant Commissioner of Income Tax, Circle 5(2)(1), Ahmedabad (hereinafter referred to as AO ), under section 154 of the Income Tax Act, 1961 (hereinafter referred to as the Act ) for the assessment year 1992-93, dated 06.03.2019. Facts of the Case 2. The assessee is a discretionary trust engaged in various activities, and the issue under consideration is for the A.Y. 1992-93. The primary issue in this appeal concerns the grant of interest under section 244A of the Act, particularly regarding the additional interest claimed by the assessee for the delayed refund. 3. The origina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds of appeal 5. Before us the Authorised Representative (AR) for the assessee argued that the AO had incorrectly calculated the interest due on the refund. The AR contended that the AO should have first adjusted the refund against the interest component and then against the tax component, as per the principles of equity and fairness. 6. The chronology of events leading up to this appeal, as presented by the AR along with supporting documents, is as follows: 20.12.1992: The assessee filed its return of income (ROI) declaring an income of Rs. 1.53 crores. 23.03.1993: An intimation under section 143(1) was issued, computing the tax due at Rs. 86.51 lakhs. However, a credit for self-assessment tax (S.A. tax) of Rs. 25 lakhs was not given, resul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The assessee filed another application under section 154, arguing that the refund issued should first be adjusted against the interest component and then against the principal. Based on this computation, the assessee claimed that the revenue still owed Rs. 12,14,242. 06.03.2019: The AO passed an order under section 154, rejecting the assessee's application. 26.08.2021: The CIT(A) dismissed the assessee's appeal, leading to the present appeal before the Tribunal. 7. The AR further submitted that the provisions of section 244A(1A) of the Act, introduced by the Finance Act, 2016, apply to the assessee's case. The AR also argued that this amendment is retrospective in nature. The AR relied on the decision of the coordinate bench in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ability of Section 153(5) and Section 244A(1A), therefore, these provisions do not apply to the appellant's case. 10. The primary issue for our consideration is whether the assessee is entitled to additional interest under section 244A(1A) of the Act and whether the AO correctly adjusted the refund against the interest component. 11. The CIT(A) had observed that section 244A(1A) was not applicable because the order giving effect to the CIT(A)'s order was passed before the introduction of section 153(5). However, this view does not hold merit as the law introduced by the Finance Act, 2016, is intended to be a remedial measure for delays occurring post 01.06.2016, irrespective of when the original order was passed. In the present case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e's own case. The assessee is not asking for interest on interest but merely for a fair method of adjusting refunds. This tribunal in the case of Nirma Ltd. (supra) also ruled in favour of the assessee emphasizing the need for consistent and fair treatment by the revenue in tax matters, particularly concerning the adjustment and calculation of interest on refunds. 13. In view of the above, we direct the AO to re-compute the interest under section 244A of the Act by first adjusting the refund against the interest component and thereafter against the tax component. The AO is also directed to grant additional interest under section 244A(1A) of the Act for the period from 01.06.2016 to 05.07.2017. The AO is directed to re-compute the intere ..... X X X X Extracts X X X X X X X X Extracts X X X X
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