ACIT-2(2)(1), MUMBAI V. STATE BANK OF INDIA (STATE BANK OF BIKANER & JAIPUR (NOW MERGED WITH STATE BANK OF INDIA), MUMBAI

ITA 1194/MUM/2023

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 8525 (ITAT-MUMBAI)
• Duration Of Justice: 10 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-02-2024
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 16-01-2024
• Assessment Year: 2015-2016
• Appeal Filed On: 10-04-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 244A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “G” BENCH, MUMBAI BEFORE SHRI PRASHANT MAHARISHI, AM AND SHRI PAVAN KUMAR GADALE, JM ITA No. 1194/Mum/2023 (Assessment Year: 2015-16) ACIT 2(2) (1 ) Room No.545, 5 th F loor, Aaykar Bha van, M . K. Road, Mum bai-400 020 Vs. State Bank of India (state bank of Bikaner & Jaipur) (now merged with state bank of India) 3 rd Floor, FRT Department, State Bank Bhavan, Nariman Point, Mumbai-400 021 (Appellant) (Respondent) PAN No. AADCS4750R Assessee by : Shri Ketan Ved, AR Revenue by : Shri Dr. Kishor Dhule, CIT DR Date of hearing: 17.01.2024 Date of pronouncement : 26.02.2024 O R D E R PER PRASHANT MAHARISHI, AM: 01. The Assistant Commissioner Of Income Tax 2 (2) (1) Mumbai (the learned AO) has filed this appeal against appellate order passed by the National faceless appeal Centre (NFAC), Delhi (the learned CIT – A) for assessment year 2015 – 16 on 8/2/2023 in case of state bank of India (state bank of Bikaner and Jaipur , Now merged with state bank of India) [ Assessee] wherein appeal filed by the assessee against assessment order passed under section 143 (3) read with section 254 of The Income Tax Act, 1961 (The Act) dated 26/3/2019 passed by The Page | 2 ITA No.1194/Mum/2023 State Bank of India; A.Y. 15-16 Deputy Commissioner Of Income Tax, Circle (2) (2) (1), Mumbai [ ld. AO] , was allowed with certain directions and therefore the learned AO is aggrieved and has preferred this appeal. 02. The learned AO has raised only ground that the learned CIT – A has erred in directing the AO to adjust the refund granted first towards interest amount refundable and thereafter consider the balance amount of tax amount refundable which will lead to excess grant of interest contrary to the practice followed by the Department and the intention of the legislation and therefore the order of the learned CIT – A is not sustainable in law. 03. The fact of the case shows that assessee is state bank of Bikaner and Jaipur which merged with the state bank of India later filed its original return of income on 27 November 2015 at a total income of Rs. 8,862,873,010. Assessment under section 143 (3) was completed on 31 December 2017 wherein the total income of the assessee was assessed at Rs. 37,470,583,560/–. Assessment order was challenged before the first appellate authority who passed an order on 26 February 2019. The appeal effect was provided by the AO of the order of the appellate authority on 26/03/2019 and total income of the assessee was determined at Rs. 13,60,87,853/-. Assessee preferred an appeal against short grant of interest under section 244A. 04. Assessee claimed before the learned CIT – A that assessee is entitled to an interest of Rs. 374,757,309/– whereas the Page | 3 ITA No.1194/Mum/2023 State Bank of India; A.Y. 15-16 AO has granted interest only of Rs. 354,757,163. The claim of the assessee is that coordinate bench in case of Union Bank of India in appeal number 7589/M/2014 has held that interest under section 244A should be granted to the assessee by first adjusting the amount of refund already granted towards the interest component and balance left if any shall be adjusted towards the tax component. Assessee also submitted the computation of interest allowable to the assessee. After considering contention of the assessee the learned CIT – A in his appellate order in paragraph number 4 – 7 has directed the assessing officer to verify the details of tax payment submitted by the assessee with respect to the amount of tax paid and. Of such tax paid and recompute the amount of interest under section 244A till date of granting of refund. The learned AO is aggrieved with appellate order is in appeal before us. 05. Firstly, the appeal is filed late and therefore a condition request was made by letter dated 10/4/2023 wherein it was mentioned that delay is because of pressing time for filing appeal before the honourable High Court different assesses simultaneous plea also having the timelines in the same. And therefore, it has resulted into filing of the appeal. The appeal is delayed by only 2 days. No objection is raised by the assessee; therefore, we condone the delay. 06. After hearing the parties, we find that appeal of the assessee has been decided by the learned CIT – A by directing the assessing officer to verify the details of tax Page | 4 ITA No.1194/Mum/2023 State Bank of India; A.Y. 15-16 payment submitted by the assessee and the amount of tax paid on period of tax payment to recompute the amount of interest under section 244A of the act till date of granting of refund. He has further held that in view of the observation of the honourable Supreme Court in 280 ITR 643 and the provisions of section 244A should be considered. Nothing was shown to us that how the learned AO is aggrieved when he is directed to recompute the interest by following the decision of the honourable Supreme Court and considering the provisions of the act. Further, coordinate bench decision has also been referred to. 07. Section 244A of the Income Tax Act pertains to the payment of interest on refunds. It states that if the taxpayer is entitled to a refund, they shall be paid an additional interest amount as determined by the Act. The interest is calculated from the date of payment of tax to the date of grant of the refund. Regarding the order of set-off, it is only dispute that according to the assessee that the interest amount is first set off against any outstanding interest payable by the taxpayer. Once the interest liability is satisfied, the remaining interest amount is set off against any outstanding tax payable by the taxpayer. If there is any interest remaining after the set- off, it is paid to the taxpayer. 08. The claim of revenue is that from taxes already refunded, taxes are to be reduced and from interest, interest granted is to be reduced for determining eligible amount for interest u/s 244A of the Act. According to assessee Page | 5 ITA No.1194/Mum/2023 State Bank of India; A.Y. 15-16 from the tax refund, nothing is to be reduced and tax and refund already determined should be reduced from interest refund, so that tax on which interest is eligible u/s 244A is always higher than the amount determined by the dl AO because tax amount eligible for interest would always be higher, resulting into higher interest out go. 09. Therefore, we do not find any merit in the appeal of learned AO as ld. AO is directed to verify the claim of assessee in accordance with law. Further, the ground of appeal raised is that if the order of the learned CIT – A is followed it will lead to excess grant of interest which is contrary to the practice followed by the Department and the intention of the legislation. We find that the practice followed by the Department should be in consonance with the provisions of the income tax act. Therefore, there is no merit in the grounds of appeal of the AO. In the result solitary ground of appeal is dismissed. 010. In the result, appeal of the learned Assessing Officer is dismissed Order pronounced in the open court on 26.02.2024. Sd/- Sd/- (PAVAN KUMAR GADALE) (PRASHANT MAHARISHI) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Mumbai, Dated: 26.02.2024 Sudip Sarkar, Sr.PS/Dragon Page | 6 ITA No.1194/Mum/2023 State Bank of India; A.Y. 15-16 Copy of the Order forwarded to: 1. The Appellant 2. The Respondent 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. BY ORDER, True Copy// Sr. Private Secretary/ Asst. Registrar Income Tax Appellate Tribunal, Mumbai