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TMI Blog2024 (10) TMI 539X X X X Extracts X X X X X X X X Extracts X X X X ..... covered under sub-clause (aa) of Section 244A(1) of the Act. We agree with assessee that after adjustment of the self-assessment tax against the taxes determined to be paid by the assessee on regular assessment, the refund of this tax fell in the category of other taxes under sub-clause (b) of Section 244(A)(1) of the Act and therefore, was not hit by the proviso which applied to only clause (aa) of Section 244A(1) of the Act denying grant of interest on refund where the refund was below 10% of the tax determined to be paid by the assessee. Thus, assessee is entitled to interest on refund of self-assessment tax for the period from January 2017 to October 2017. Ground of appeal raised by the assessee is accordingly allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... 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;] (b) in any other case, 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 or periods from the date or, as the case may be, dates of payment of the tax or penalty to the date on which the refund is granted. Explanation.--For the purposes of this clause, "date of payment of tax or penalty" means the date on and from which the amount of tax or penalty specified in the notice of demand issued under section 156 is paid in excess of such demand." 4. The relevant finding of the ld. CIT(A) denying the assessee interest on refund of self-assessment tax is at paragraph 7.2 of his order which reads as under:- "7.2 Submission of the appellant is duly considered. Proviso to the section 244A (1) [supra] referring to the clause (aa) says that no interest shall be granted 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. SAT paid is Rs. 93,41,790/-. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... All of which was granted by the Assessing Officer, except on refund of self-assessment tax to the tune of Rs. 27.37 lakhs, which was paid while filing the return of income. The entire chronology of events filed before us is as under:- Date Particulars Pg No 29.11.2013 Original ROI filed 31.03.2015 Revised ROI filed. Normal Income at Rs. 7.74 crores. Book Profits at Rs. 391.41 crores Tax payable 79.14 crores Tax paid 79.41 crores Refund claimed Rs. 27.37 lakhs 1-5 17.01.2017 Assessment Order normal income @407 crores. Book Profit Rs. 394 crores Tax payable 77.80 crore. Computation shows that credit of Advance Tax and Self Assessment tax is given full. TDS is short calculated 6-23 14.02:2017 154 order rectifying error in assessment order. Total income 406.30 crores. Seen on 29 21.07.2017 CIT(A) decided the appeal 21.09.2017 OGE to CIT(A)'s order. Income assessed at Rs. 25.63 crores. Book Profit Rs. 391.41 crores 29 - 31 21.12.2017 Rectification application by Assessee to correct error in OGE 1. TDS is short granted. 2. Interest u/s 234C will be revised. 3. Interest u/s 244A not granted 32-33 15.03.2018 154 der passed to correct er ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der as under:- "7. We have heard the rival contentions and perused the material available on record and the submissions made by the Ld. Counsel for the assessee. We find that Ld.CIT(A) has decided the issue by observing as under:- 4.3. "I have given careful consideration to the arguments of the appellant as well as the relevant provisions of the Income tax Act. The amendment to Section 244A sub sections (a) & (aa) was made w.e.f 01.06.2016. Therefore, it is very clear that the provisions of Section 244A (i)(aa) will not apply to cases prior to 01.06.2016. The claim of the Appellant cannot be allowed as this case pertains to A.Y.2013-14 and the Self Assessment tax deposited by the appellant was before the cutoff date from which 244A (i)(aa) became effective. Therefore, the appeal of the assessee for allowance of interest u/s 244A(i)(aa) on the refund amount cannot be allowed." 8. From the above finding of Ld.CIT(A), it is clear that the claim of interest was disallowed purely on the ground that the amendment to section 244A sub-section (a) & (aa) of the Act was made w.e.f. 01.06.2016 since the present appeal pertains to the Assessment Year 2013-14. Therefore, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (page 442 of 294 ITR): 'Even though the short title to section 140A reads as self- assessment, the charging phrase employed : section 140A namely "Where any tax is payable on the basis of any return required to be furnished under section 115WD or section 115WH or section 139 or section 142 or section 148 or section 153A, as this case may be ; the assessee shall be liable to pay such tax together with interest payable under any provision of this Act for any delay in furnishing the return", makes it clear that there is no difference between : (i) the tax paid under section 115WJ, which deals with advance tax in respect of fringe benefits; or (ii) the tax collected at source under section 206C; or (iii) any tax paid by way of advance tax or any tax treated as paid under section 199, which deals with credit for tax deducted, which are provided under section 244A(1)(a). The proviso to section 244A(l)(a) makes it clear that no interest shall be payable if the amount of refund is less than 10 per cent, on regular assessment with regard to the refund of advance tax paid under section 115WJ in respect of fringe benefits ; (ii) tax collected at source under section 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... funded as a consequence of relief obtained in appeals, etc., are monies legitimately belonging to the taxpayers and wrongly withheld by the Government. This is based on the principle that if the Revenue had, in the first instance, made correct assessment of the tax liability of the assessee, the assessee would not have been deprived by the use of money. In such a situation, where pre-paid taxes are in excess of the assessed tax, the assessee is entitled to refund of such tax along with interest thereon. Where an assessee out of abundant caution pays self- assessment whilst staking a claim in the return, which claim is accepted, resulting in refund of self-assessment tax, the assessee should be equally entitled to interest thereon. Section 244A was inserted in the statute as a measure of rationalization to ensure that the assessee is duly compensated by the Government, by way of payment of interest for monies legitimately belonging to the assessee and wrongfully retained by the Government, without any gaps. Therefore, in our view where the self-assessment tax paid by the assessee under section 140A is refunded, the assessee should be, on principle entitled to interest thereon si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eclared in the return. Once the tax so paid gets adjusted against the tax determined by the Assessing Officer upon assessment, such self-assessment tax takes the imprint of a tax paid in pursuance to an assessment. In fact a similar issue was considered by the Ahmedabad Bench of the Tribunal in the case of Dhanvi Trading and Investment (P.) Ltd. {supra) the relevant portion of which we reproduce herein : 'So long as the self-assessment tax possesses and retains the character of self-assessment, there is no question of reckoning the same for the purposes of treating it as excess payment and allowing interest as envisaged under section 244A till the regular assessment is made under section 143 or section 144, it is only on the date the assessment is made that the deeming fiction contained under section 244A(2) comes into play and the self-assessment tax is deemed to have been paid towards the regular assessment. It is, therefore, on the date of the regular assessment that the self-assessment tax loses its identity and assumes the character of the tax paid for the purpose of quantification of any excess of tax payment in response to the notice of demand issued under section 156. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fferent in the light of the factual matrix involved therein and in none of the cases, the issue whether the assessee was entitled to interest on refund of self-assessment tax paid under section 140A of the Act in terms of section 244A or not, was under consideration. Thus, no advantage can be derived by the learned counsel for the revenue from the aforesaid pronouncements." 10. Respectfully following the binding precedents, we therefore, direct the Assessing Officer to allow the claim of interest on self-assessment tax as made by the assessee in accordance with law. Thus, grounds raised by the assessee are allowed. 11. In the result, the appeal of the assessee is allowed." 9. Our attention was particularly drawn to paragraph No. 9, sub-para 11, wherein the findings of the Hon'ble Delhi High Court in M.M.T.C. Ltd's case was reproduced, holding that tax paid by way of self-assessment, after its adjustment in the tax liability of the assessee on regular assessment loses its original character and becomes tax paid in pursuance of the liability and once that is so, it cannot be held that the assessee is only entitled to interest u/s 244A(1)(b) on TDS or advance tax, and not on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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